FitBit's (FIT) competitors generally fall into two categories: smartphone giants pushing high-end smartwatches, and firms selling something more akin to FitBit's products. The first offer more features than FitBit's trackers, but are considerably more expensive, while the second offer (relatively) cheap wearables that center almost exclusively around daily activity.

There are just as many companies that fall into the second category as the first -- Xiaomi, Misfit, and Withings, among others -- but one seems to stand above the rest. When it comes to pure fitness tracking, Jawbone appears to be FitBit's most formidable rival. Earlier this month, Jawbone made a major change to its flagship fitness tracker, one that makes it a much more compelling alternative to FitBit's devices.

Jawbone's Up3. Photo: Jawbone.

The Up3 debacle
In 2013,19% of the activity trackers sold in the U.S. were made by Jawbone, according to NPD. FitBit's market share was considerably higher -- around 68% -- but Jawbone was its single largest rival. Research firm Canalys reported similar trends in 2014: in the first half of the year, Jawbone sold the second most dedicated fitness trackers, behind only FitBit.

Jawbone seemed to have everything in place for a strong 2015 when it announced the Up3 in November of last year. The device represented a radical improvement over its previous trackers, with many more sensors and more compelling features. It would be able to track your hydration, Jawbone said, along with your heart rate, and it would be totally waterproof, allowing swimmers to gain the same sort of insights as runners. Even FitBit's most expensive tracker, the $249 Surge, doesn't offer as much.

Unfortunately, Jawbone was unable to deliver on its lofty promises. Released in April of this year, the Up3 was widely panned. Most notably, it isn't waterproof, and many of its sensors don't appear to offer any discernible advantages. The Verge awarded it a modest 6.6 (out of ten) and told its readers to buy Jawbone's older, less expensive Up2 instead. CNet gave it a slightly better score -- 6.9 -- but declared that it simply wasn't worth the $179 asking price.

Both publications found fault with the Up3's limited heart rate capabilities, which only work when the band is in sleep mode. To activate sleep mode, the user must manually switch the device over using a series of taps. That also drew sharp criticism. "That'd be simple enough if it worked reliably every time, but I regularly found myself tapping repeatedly...Too often, it just didn't register," wrote The Verge's Chris Welch.

But Jawbone hasn't given up on the Up3. Earlier this month, it released a major firmware update that fixes many of the device's problems. Owners no longer have to activate sleep mode -- the band does so automatically -- and the heart rate sensors now work whenever the user is still. First impressions are vital, but if the device were to be reviewed again today, it would likely garner considerably higher scores. Jawbone has also announced its intention to begin shipping the Up3 in a wide variety of colors.

In a different class
Jawbone remains a private firm, but FitBit investors should watch its product portfolio closely. For the time being, smartwatches remain an imperfect substitute for dedicated trackers, with lesser battery life and an absence of key features (notably sleep tracking). Most of them are also far more expensive.That may change, but for the time being, consumers interested in a fitness tracker will likely confine their search to dedicated devices.

Last month, IDC released its findings on the wearable market. Although Jawbone didn't make it into the top five vendors, IDC reported that it was only narrowly edged out. FitBit remains the market leader, but competition is intense.