Jawbone to drop consumer wearables for lucrative clinical products business

It is rightly said that sometimes you have to make a tough call to stay in business. Jawbone, a familiar name in wearable market might soon shift its focus from consumer wearables to lucrative clinical services.

As per a report by Techcrunch, the wearable maker is preparing to shift its business from selling low-margin fitness bands directly to consumers, to a high-margin business to business to consumer model involving health products and accompanying set of services sold primarily to clinicians and health providers working with patients.

This means that jawbone will stop producing low-margin consumer wearables, such as UP line of fitness trackers, which did manage to make some noise in the wearable industry.

Techcrunch further reports that Jawbone is trying to raise more money and it's been in conversations with a number of investors, even some new from outside the U.S market in the wider medical sector.

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While it is not clear how much money Jawbone has managed to raise, an estimate suggests that the wearable maker has raised $951 million from investors that include names such as Andreessen Horowitz, Sequoia, Kleiner Perkins, JP Morgan, Mayfield and Khosla. However, a lot of that money has been spent to prevent a collapse of the wider wearables market.

The move seems quite logical considering the fact that the consumer hardware game has become too challenging lately, especially in wearable sector. The possible shift to a growing health wearables market might help Jawbone recover from its dire financial straits.

And it's not just with Jawbone. Techcrunch further cites a recent report from eMarketer that revised down growth estimates for the whole sector by nearly 40-percent. The wearable products see an interest in the first few weeks of their purchase and fail to please consumers for a longer run.

As noted, it was in May 2016 when Jawbone issued a correction to initial reports that the company is giving up on wearables. It even issues a statement saying that the company remains wholly committed to innovating in and building great wearables products. However the slow wearable market has finally forced the wearable maker to shift its focus.

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