- Jawbone is ditching the consumer wearables market and plans to expand its business margin by offering clinical products and services to healthcare providers, according to a TechCrunch report.
- Sources told TechCrunch the company is in talks with existing investors including Sequoia, Khosla and JP Morgan, as well as new investors with specific experience in the medical sector.
- Jawbone has been treading water with its consumer fitness band business, which has been hurt by product failures and poor customer service, the report adds.
Since its inception in 1998, Jawbone has raised more than $950 million. But over the last two years, its valuation has dropped from a high of $4.1 billion in September 2014, to $1.3 billion in January 2016, Forbes reports, citing the venture capital database Pitchbook.
U.S. companies in the wearables market have been feeling the pinch lately. According to a recent report by eMarketer, growth estimates for the sector are down 40% from what was earlier projected, with many products failing to attain critical mass, TechCrunch notes.
One major player, Fitbit, reported preliminary revenues for the 2016 4th quarter 0f $572 million to $580 million — significantly less that the $750 million forecasted for the period. The San Francisco wearables maker said it would lay off 6% of its global workforce and reorganize to increase operating efficiencies.
A study published in PLOS Biology suggests wearables still have a strong future, but with more physician guidance and interaction with their use. According to the Stanford University study, the number of wearables shipped will reach 66 million by 2021 as doctors increasingly recommend them to their patients. Among the conditions they measure are heart rate, blood oxygen levels and physical activity. They can also detect inflammation, early-stage Lyme disease and whether a person is at risk of type 2 diabetes.
Jawbone is not a total newcomer to the medical device field, having bought Body Media, a wearable sensors manufacturer, for $100 million in 2013 and Spectros, a company that makes molecular sensing and imaging devices that let doctors remotely monitor seriously ill patients, in 2015, Forbes notes.