Jawbone is exiting the consumer wearable market and shifting focus towards the lucrative market for clinical health products according to a report in TechCrunch.
The company, which manufacturers headphones, Bluetooth speakers, and fitness trackers, has been struggling for some time. We have not seen a new fitness tracker from Jawbone since May 2015, and there has been no shortage of rumors it is preparing to close up shop. Jawbone’s own website suggests it is running low on stock. Some of its trackers are entirely sold out, and for others there is only a limited supply left.
Furthermore, Jawbone recently closed down four of its support centers in the US Ireland. And just last month both the head executive of product and the chief financial officer left the company.
“If you think about what a good consumer electronics company looks like, it’s 30% 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% contribution margin,” a source close to Jawbone told TechCrunch
“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.”
In order to make the transition the San Francisco based outfit is reportedly looking to to raise yet another round of funding. This is on top of the 11 rounds that already secured over $590 million. Jawbone is apparently targeting a mid-2017 release date for its next product – a medical-grade sensor which would be used in the medical field .
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