Longtime consumer electronics company Jawbone is going out of business after years of financial struggles, according to a report from The Information .
Jawbone’s exit signals the latest chapter in a tightening race for wearables domination between Apple, Fitbit, and the Chinese wearable maker Xiaomi.
Jawbone, which focused on its style-focused UP fitness tracker line, originally sold bluetooth speakers and wireless speakers since its inception in 1999. It pivoted to wearables in 2011, identifying a nascent market with room for potential.
In the past few years, however, cheaper wearable makers like Fitbit and Xiaomi and high-end products like Apple Watch entered the market and squeezed Jawbone out of the race. Jawbone continued to bleed money due to its costly design and manufacturing problems.
Jawbone was once valued at $3 billion and raised over $900 million from top venture capital firms like Andreesen Horowitz and Khosla Ventures. But by last August, Jawbone sought to sell the company. It also did not make a $1 million payment to one of its vendors and abruptly ended ties with its customer service agency after skipping payments.
Its founder, Hosain Rahman, has begun a new health technology company called Jawbone Health Hub, which will continue running existing Jawbone trackers.
Many of Jawbone’s employees have moved onto Jawbone Health Hub, according to The Information. The company was also hiring positions that directly catered to Jawbone Health Hub in recent weeks, according to The Verge.
Jawbone entered liquidation proceedings under California law on June 19, according to a note sent to its creditors. It hired Mountain View-based business consulting firm Sherwood Partners to handle the proceedings, which include an ongoing lawsuit with Fitbit.
Jawbone sued Fitbit in 2015 alleging trade secret misappropriation. Fitbit counter-sued alleging patent infringement.
Silicon Valley observers took the end of Jawbone on social media with some surprise and retrospection.
Jawbone’s Up app had some of the best features of any fitness-wearable software; hope some of the ideas in it survive. https://t.co/Aq1qubbz1C
— Harry McCracken :us: (@harrymccracken) July 6, 2017