Jawbone bet big on fitness trackers and lost

Quarterly Global Wearables Shipments

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Jawbone, the consumer electronics company that offered high-end speakers and Bluetooth accessories before pivoting to fitness tracking devices, will be going out of business, reports Business Insider.

CEO Hosain Rahman is moving to a new, related venture that will focus on health products and services, and is bringing a number of Jawbone employees with him.

Jawbone tried to establish a foothold in the consumer wearables market, but was never able to do so.

Jawbone’s fitness trackers never caught on with consumers to the extent the company had hoped they would. After the market for a number of its core products — especially Bluetooth hands-free headsets — began drying up as a result of technological changes and evolving consumer preferences, Jawbone took steps to stay relevant:

It began to develop fitness trackers to parlay its consumer brand into a new segment. But, as The Verge chronicles, the company’s UP health tracker was plagued by product failures and production issues, never offering consumers a product that compelled them to adopt the device en masse.
The company was also mired in a long-term legal dispute with Fitbit, the market leader in the wearable space. Fitbit and Jawbone each alleged that the other infringed on a number of patents in designing its trackers, though at least one part of a Fitbit suit was dropped in light of Jawbone’s financial woes.

The end for Jawbone shows the unpredictability of the stagnating consumer wearables market. The company was never able to generate the interest and sales needed to sustain its product. At the same time, the market it was moving into started to see slower growth, with year-over-year shipment growth dropping from 54% between Q1 2015 and Q1 2016 to 16% between Q1 2016 and Q1 2017.

The space has also seen consolidation, with Fitbit and Xiaomi establishing themselves as clear leaders, responsible for almost a third of non-Apple wearable shipments in Q1 2017. As Jawbone exits the market, it’s not clear how much more room there will be for fitness wearables as Apple dominates the space, Fitbit turns to smartwatches, and others pivot to clinical devices.

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