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Jawbone Is Still in Business, but Most of Its Online Products Say "Sold Out"

By Chris Neiger – Sep 30, 2016 at 9:11AM

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Jawbone's lack of inventory is anything but reassuring that the company is operating normally.


Image source: Jawbone.

If you go to the products page of Jawbone's website right now you'll see something very odd. Nearly all of its devices, including its fitness trackers, have a "sold out" message next to them. 

That's not terrible news on its own, of course. A lot of tech companies shut down their online stores when they're about to launch new products or are making major changes to the store. But the problem is, Jawbone isn't doing either of these things -- or at least it hasn't said it is. 

Rather, Business Insider reported last week that Jawbone hasn't paid one of its main business partners, and that sources have told the website it has nearly nothing left in its inventory. The article also said that Jawbone quickly ended its relationship with NexRep, which it used for its customer service, and that Jawbone was unable to pay for past services completed by NexRep.

That sounds pretty bad, but it gets even worse. NexRep also said the inventory it typically used to fill replacement orders for Jawbone customers had essentially dried up over the past few weeks. For the record, Jawbone has denied that it's in financial trouble, or that it wasn't able to pay NexRep.

This doesn't look good either way

Whether NexRep or Jawbone's claims are true, the fact remains that for nearly a week now, Jawbone hasn't been selling any products from its website. After months of rumors that the company is in financial trouble, it's becoming harder to believe that Jawbone's business is humming along nicely. 

The Information wrote last month (paywall) that Jawbone was having problems paying one of its suppliers. Jawbone has flatly denied both of those allegations, and CEO Hosain Rahman wrote in a statement posted on the company's site (emphasis in original): 

As some of you may have recently seen, there have been a few incorrect media reports that Jawbone is exiting the wearables business or going out of business altogether. These reports are unequivocally false.

If all of this weren't enough, Jawbone is still embattled in lawsuits with Fitbit over patent technologies and trade secrets. The most recent decision, from the International Trade Commission, said Fitbit's patents are eligible for legal protection, reversing a trade judge's previous ruling. That could pave the way for Fitbit to halt imports of Jawbone's devices coming in from Asia to the U.S.

While Jawbone isn't out the wearables business, it's lack of online inventory, continued allegations of not being able to pay vendors, and ongoing legal struggles with Fitbit all point to massive problems at the company. 

It wasn't all that long ago that Jawbone was thought to be releasing a new medical-grade wearable device that might help ease the company's woes. That could still happen, of course, but the company isn't giving much indication that things are running normally. 

If Jawbone is indeed still in the wearable tech business, it needs to address all of these problems quickly to reassure its current customers -- and it certainly needs to start selling devices on its site again. 

Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Fitbit. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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