Google may make a ‘strategic investment’ in Jawbone (report)

Google has avoided producing a wearable device of its own, but a report today says the company is considering making a bet on the fitness wearables company Jawbone.

Jawbone’s apps and devices — like the Jawbone Up —  have been popular with users and media, but the company has long been rumored to be running low on cash. It’s playing in a tough wearables market after all, with competing devices like the $13 Xaiomi Mi Band starting to flood the market.

And Jawbone has always run in second place to rival FitBit, which the research shows as having a comfortable lead in the wearables space by market share.

The story, from Re/code, characterizes the talks as “preliminary” and adds that the companies haven’t come to an agreement on the terms of a Google investment — and what it would be buying.

Reports last year said Jawbone was seeking to raise $250 million in new funding. Based on the amount of stock the company was willing to sell, analysts put the company’s valuation at about $3.3 billion.

The news comes as virtually everyone in the wearables business makes strategic moves in the looming shadow of Apple Watch’s big coming out party in April. Jawbone and other fitness tracker companies stand to lose a chunk of their sales from people who decide to buy a full-featured smartwatch that includes all the fitness-sensing features contained in less-expensive fitness devices.

Google certainly has the money to make an investment that would make a big difference in Jawbone’s financial future. Google may also be interested in coming to parity with Apple. Apple has both a fitness data integration platform in HealthKit and a device that plugs into it, while Google has the integration platform in Google Fit, but no device of its own to pull data from.