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This afternoon I spoke with Eric Migicovsky, founder of smartwatch pioneer Pebble, which has sold over a million units of its two generations of smartwatch in three years.

Last September, Apple’s (AAPL) Apple Watch arrived on the scene, and the question became, What would Pebble do to respond?

The company last week announced the latest version, “Pebble Time,” via a Kickstarter campaign that has raised over $16 million in pledges. This week it announced metal versions of the Time as well.

Migicovsky was on his way back to Silicon Valley via New York after trolling the halls in Barcelona for the Mobile World Congress show, where LG Electronics (066570KS) and others were showing off their new wares. He seemed undaunted by the continued waves of would-bes.

Of the new Time “Steel,” which he’s wearing, he said "We’ve been working on it for a year, or year and a half now, and it’s great to be finally wearing one out in public!"

What’s to know that’s important about this new model? I ask.

Migicovsky says the most important part is having figured out what people want to do with a smartwatch:

There’s basic things. We’ve cracked what people are going to do with smartwatches. Since we launched three years ago, some of the discussion out there has been great, but why do we need them? We satiated that early adopter market with our first pitch, where you could see notifications, control your music, and RunKeeper, all from your wrist. That was the first step. What it gave us was the ability to work with our customers and users to see what’s the real reason, how are these things actually going to help us live our lives better? Notifications are fun and useful and wonderful, but it’s not the only part of the future. The real thing is, the number one reason, is to tell the time. When you look down at your wrist, you have to be able to see what time it is. But more important, what’s the context around time? Am I late? Am I early? What’s the traffic like? We’ve finally figured out what people do with it, and how they do it. It used to be apps. The primary metaphor was apps, and as a user, you know there’s notifications and apps and watch faces, and they are these three silo-ed systems on Pebble. That’s great, people figure it out in 5 to 10 minutes. But for people trying to accomplish more, it broke down, it wasn’t scalable. It just got more complicated. The reason why is because there was no fundamental metaphor or structure or framework to enable this to scale. When we found that time was that fundamental metaphor, everything started to click. What is important is not the app but the content of the app. If you overlay it on top of time, everything clicks. You see these pins on your timeline, and you could have 20 different ones, but it won't be complicated. We have tested it. It’s going to be more exciting.

I ask what third parties are doing to update their wares. He notes ESPN is a prominent partner that’s been tuning its apps for the timeline experience:

ESPN is taking the idea of the current engine, where you follow teams that you like. They are putting that into the past, present and future organization. So, you have a single pin from a provider like ESPN that in future, exists as a heads-up of when a game starts. In the present, that pin traverses time and becomes a real-time score keeper. In the past, that exists as a record keeper. It’s time-based context.

Despite the wave of new watches coming to market, as exemplified in Barcelona, Migicovsky is undeterred, seeing little innovation in them:

No one had done anything, We have a million users, the biggest smartwatch population. Android Wear, I don’t think anyone ever respected them. They didn’t have any new ideas. I like their voice responses, though. We looked at that. The benefit we have are passionate users that care. Looking at the competition, it’s crazy that we launched three years ago and it’s taken people this long to launch their first. Samsung has launched eight models, but that’s different. We played to our strengths and stuck close to the community. People went on KickStarter and said, I want to put my money where my mouth is, and they did. The only one that has a chance of selling a lot is Apple Watch. If you look at the numbers from [research firm] NPD for the holiday quarter, Pebble outsold everyone else including Samsung. We were twice the volume of Motorola [360] in terms of units. All the other ones are smaller footnotes at the bottom. It’s cheap to make a watch but they don’t actually get sold.

How seriously does he take Apple Watch? Very:

I think Apple is a massive competitor. They are Apple, and there's no reason to underestimate the power they have. We are specifically doing things Apple can’t do, like having a battery life of 10 days, like having this new interface, being waterproof, working with both [Google’s] Android and with iOS.

Asked if Apple will help Pebble as well, by validating the category, Migicovsky replies “I totally think they will expand the market."

But, I ask, what about the fashion aspect of watches? Has the Time’s new look got what it takes?

Fashion is an important piece, it’s critical. With Pebble Time, and Time Steel, we have put our best foot forward with what you can put on your wrist without compromising battery life. Even with things like smart straps, where you get the beauty of the color screen, and then expand it later after the fact.

As far as apps, even if it’s not, as Migicovsky suggests, about looking at apps, is he concerned that Apple can muster a lot of third parties? For example, Starwood Hotels is supposed to let you use your Apple Watch to unlock your room door.

Migicovsky doesn’t sound intimidated:

As I mentioned before, I don’t view it [apps] as the best interface on the watch. Tapping on apps — it’s not the best way. When you think about it not just as a smartphone on your wrist, as a new way to interact, then it becomes interesting. It’s a whole new way to look at interaction with computers and people who are important.

What about the vaunted design studio of Apple's Jony Ive? “You have to give a lot of credit to Apple,” he says, “they know their market, and their supply chain."

What will Pebble be five years from now? I ask. "I see Pebble as becoming an indispensable part of your daily life,” says Migicovsky. "Pebble will play a key role in everything you do."

I ask Migicovsky about the example of past makers of indispensable devices, such as Palm and their Palm Pilot., which was at the outset a very well-thought-out device with a focused, specific function that became a must have for millions.

Migicovsky observes that Palm somewhat lost site of its priorities, signing too many deals to spread its technology too quickly:

Sure, Palm ruled the earth for ten years, '96 to 2005, and then lost, but not for lack of that first start. They ruled the earth. They are a massive story, and there were some failures. They went to this system where there were 100 devices that ran PalmOS, as a result of their licensing strategy. The Sony Clie, devices from Symbol, bar code scanners.

Regarding the gold colored Pebble Time Steel, it is, of course, not actual gold at a price of $250 on Kickstarter, says Migicovsky (the regular retail price will be $299, $50 lower than the entry-level aluminum Apple Watch). It is “gold colored,” through a process known as “PVD,” or "physical vapor deposition,” a process Migicovsky says is often used in high-end watches, especially of the rose gold type.

As far as pricing, while the new Time starts $199, the entry level for the line is really $99, which is the price of the older Pebble model, which will be able to be upgraded with the new software platform. It will be like having a brand new device, he says, albeit without the color screen and the voice commands.

Migicovsky sums up where things stand:

The story that I think is just starting to get out is, What are people actually going to do with smartwatches? People talk about them, but what are people going to do with them? That’s where Pebble shines. We also have to do a better job of explaining it. With timeline, we basically illustrate that better. What we’re pointing out is that we all travel, we all have family, and jobs — and Pebble’s not for everyone — it’s not designed to be the perfect device for everyone under the sun. It’s great for people who are busy and want to do things while on the go. We are moving away from the one-size-fits-all in 2015, to serve the people who are the ones who get the most out of it.

Lastly, after raising $16 million in the KickStarter campaign, I asked Migicovsky if he has any plans to pursue venture or other institutional funding. He says he does not, noting "We’re profitable now, and have been for three years. I think we’re pretty good on that score."