Jawbone has announced that it will leave the consumer wearables market to focus on producing medical products for sale to clinical practitioners.
The name Jawbone is synonymous to many for fitness trackers, earphones and Bluetooth speakers, but that won’t be the case in the future; the company has officially announced that it is leaving the consumer electronics market behind.
Instead, we’ll be able to link the Jawbone name with medical products that will be sold to clinical practitioners in the future. The news comes after the company scrambled to redouble its efforts in the declining wearables market in a billion dollar bid that took place a little over a year ago.
Read: Nokia acquires Withings to get into the wearable market
The past few months have seen Jawbone cease production of its UP range of fitness trackers, sell its remaining inventory at a discount, close it’s four Ireland and US-based support centers, and seal the fate of its Executive of Products and Chief Financial Officer.
In conversation with TechCrunch, an anonymous source originating from the company shed some light on the move:
“œIf you think about what a good consumer electronics company looks like, it‘s 30-percent margins, annual release cycles and huge risk. It‘s turned into a blockbuster game. But folks in this other area, like Omada and other services, they have a human involved but with a nearly 100-percent contribution margin.
It‘s wildly different economics. Every wearable company today will be posed with this question: Do I want to play in consumer and narrow margins, or healthcare and service and make incredible margins but with possibly a lot of upfront fixed cost.“
Read: Jawbone rumoured to cease production of fitness trackers, speakers
The move has been echoed by murmurings from Apple, where it has been alleged that the Cupertino company is developing a new, non-Watch wearable for either fitness tracking or medical uses.
What are your thoughts on Jawbone’s decision to fold? Be sure to let us know your opinion in the comments below!
Follow Bryan Smith on Twitter: @bryansmithSA
