Jawbone has slowed production of its fitness trackers and sold remaining inventory to a third party

JawboneUP4Lisa EadiciccoThe Jawbone UP4 fitness tracker.

Jawbone has slowed production of its UP fitness trackers and sold inventory to a third-party reseller, sources familiar with the matter told Tech Insider.

Jawbone has three major fitness trackers: The UP2, UP3, and UP4. The company has struggled to sell the devices and was forced to offload them at a discount to a reseller in order to get the revenue it needed to keep the business going, according to the source.

Representatives for Jawbone provided the following comment three days after this story published:

Jawbone has not ceased working on the production of UP products nor do we intend to. Each and every employee at Jawbone is currently focused on the design, development, marketing and production of either our current, or our next generation, UP wearables product line.

So, to be clear (since some people are interpreting this report incorrectly), Jawbone is not exiting the wearables business. You can still buy the UP fitness trackers. Jawbone just sold its remaining inventory to a third-party reseller. Our source reconfirmed that the current line of UP trackers aren’t being built right now, although there’s always the option to make more if the current inventory sells out.

Jawbone’s new statement seems to suggest that production of its fitness bands may be slowing, but not stopping completely. The slowing may also be due to a change in hardware priorities; Jawbone is reportedly working on a new or enhanced wearable product that’s health focused.
But it’s been over a year since Jawbone has released a new flagship fitness tracker. Despite entering the wearables market almost five years ago, Jawbone has failed to gain any significant market share in the space. FitBit and Apple currently dominate.

Selling product to a third-party can be a common tactic used by hardware companies to offload inventory and generate revenue before a new product launch. Jawbone also raised a new $165 million round of funding in January. The company’s CEO Hosain Rahman told Tech Insider a few months ago that the company plans to use that money to develop clinical-grade fitness trackers.

Sources also said Jawbone has discontinued its Bluetooth speaker business and is trying to sell its remaining inventory. On Friday, Fortune’s Leena Rao reported that Jawbone wants to sell off its speaker business. Rahman declined to comment on the speaker business when Tech Insider asked about it a few weeks ago while reporting on another story.

This story has been updated to reflect Jawbone’s statement on its wearables product line.

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