Jaw­bone, once worth $3.2B, shuts down

The Hamilton Spectator - - BUSINESS - JEF­FER­SON GRA­HAM USA Today

LOS AN­GE­LES — Tech prod­ucts have gone out of busi­ness be­fore, but they usu­ally leave traces for con­sumer con­tact.

The fitness tracker and Blue­tooth speaker com­pany Jaw­bone, which is in the process of liq­ui­dat­ing, is tak­ing a dif­fer­ent tack.

Vis­i­tors to its web­site see a com­pany that looks like all is well, and is pro­mot­ing prod­ucts — ex­cept that there are no links to buy them. A phone num­ber di­rects call­ers to a gen­eral voice mail box. Cus­tomers com­plain in on­line re­view fo­rums of leav­ing many mes­sages in email and phone form that haven’t been an­swered.

How Jaw­bone is han­dling it “isn’t re­spon­si­ble,” says Gart­ner an­a­lyst An­gela McIn­tyre. A Jaw­bone spokesper­son had no com­ment.

Last week, tech in­dus­try web­site The In­for­ma­tion re­ported on the liq­ui­da­tion pro­ceed­ings, say­ing that co-founder and CEO Ho­sain Rah­man is start­ing a new com­pany to make health-re­lated hard­ware and soft­ware ser­vices.

The demise fol­lowed years of re­ports the San Francisco startup, once val­ued at $3 bil­lion and the ben­e­fi­ciary of $950 mil­lion in ven­ture cap­i­tal fund­ing, was on shaky ground. Jaw­bone had been locked in a heated bat­tle with Fit­bit for the wear­able mar­ket, with prod­ucts that help you count daily steps and track sleep. But Fit­bit has been way ahead. In 2016, Fit­bit shipped 22.3 mil­lion de­vices, and McIn­tyre guesses Jaw­bone saw “less than 20 per cent of that.” Gart­ner es­ti­mates 34.7 mil­lion fitness track­ers were sold last year, in­clud­ing from com­pa­nies like Sam­sung.

Un­like Jaw­bone, the mak­ers of past tech fiz­zles did reach out to their cus­tomers. Peb­ble Watch, for in­stance, which stopped mak­ing new watches in 2016, and has since seen some of its as­sets ac­quired by Fit­bit, has a web­page alert­ing con­sumers what to do, and how to ap­ply for re­funds if they’re Kick­starter back­ers.

Jan Daw­son, an an­a­lyst with Jack­daw Re­search, says con­sumers should re­search the com­pany be­fore buy­ing prod­ucts.

“Sto­ries about Jaw­bone hav­ing trou­bles have been out there for the last year and a half,” he says. “The writ­ing has been on the wall if you cared to look.”

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