Jawbone sells its business and goes to the medical equipment market

According to sources close to the company, the manufacturer of wearable electronics Jawbone plans to enter the market of medical equipment, according to TechCrunch. The company refused to work in the consumer market and curtails its presence in this area. Already sold a significant part of the assets, including the business of producing JamBox - portable speaker systems. Support for previously released products is also declining.

Now leadership Jawbone is negotiating another round of investment. The plans of the manufacturer of wearable and portable electronics to enter the market of medical equipment.

The company wants to do business on the B2B model: the production of equipment and the provision of services for doctors and other medical personnel working directly with patients.
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In the past, the company has already received an investment of $ 951 million, but the low profitability of their business led to the “devouring” of this amount. The main investors of Jawbone were Sequoia, Kleiner Perkins, JP Morgan and other organizations. The last time an investment of $ 151 million was received over a year ago. At the same time at that time the market value of Jawbone was $ 1.5 billion against $ 3 billion, in which the company was estimated at the peak of its “form”. Now the cost of the manufacturer is less than $ 1 billion.

This and other factors make the transition to a different Jawbone business model more than reasonable: instead of competing with competitors in the low-margin market of fitness bracelets and wearable electronics, constantly invest money in the development, support and elimination of marriage (and this problem really exists) , you can enter the high-margin business of medical care, where there is an opportunity to get super profits.

Jawbone began selling assets in September 2016. Then Business Insider reported on the company's financial problems and the sale of a part of the JamBox speaker business.

Fitbit showed interest in buying a competitor, but it didn’t grow together with the deal, and as a result, the manufacturer of wearable electronics bought Pebble for the sake of patents and liquidation of a competitor. And now Jawbone leaves this market, but independently.

At the same time in the new market Jawbone is not particularly waiting. The niche for the production and sale of medical equipment for personnel is already successfully occupied by other companies. Jawbone will have to spend a lot of manpower and resources to compete with them and take their own place in the already established market. The representatives of Jawbone abstained from any comments.