Jawbone wants you to get UP and move

November 3, 2011, 4:00 AM UTC

Jawbone's UP wristband launches Nov. 6 for $99. Will you pick one up?

FORTUNE — Jawbone made a name for itself cranking out high-quality, head-turning wireless devices: first with a successful line of Bluetooth headsets, then with a portable speaker that quickly became a must-have gadget late last year.

Now, the San Francisco-based company is branching out. Its new UP is a slick, water-resistant wristband with a built-in accelerometer, much like Apple’s (AAPL) iPhone. Instead of making another audio device, the venture-backed startup is pushing itself into the rapidly emerging market for personal health gadgets. Though estimates for UP’s niche aren’t available, according to the Austin, Texas-based market analysis firm First Research, the overall fitness equipment market is worth some $3 billion in sales annually in the U.S.

How does the device work? It lets users track their daily routines: how much and how fast they walk, calories burned, how many hours slept — and even the quality of that sleep. Plug the hidden headphone jack into an iPhone’s audio jack-in between charges and all that data is synced with an app that analyzes and displays it in brightly colored graphs. (Jawbone expects users to do that two or three times a day.) The app also lets users track how much they eat by letting them snap photos of meals and document how they feel after each meal.

The idea is to give users a holistic view of their health, encouraging them to make healthy changes. UP gets a little “smarter” with each sync, vibrating and waking users at the best time in their sleep cycles within a user-assigned time frame, for instance. The device will be available on Jawbone’s web site, as well as Apple, Best Buy (BBY), Target (TGT) and AT&T (T) locations in the U.S. on November 6 for $99; a UK launch is set for November 17.

Jawbone co-founder and CEO Hosain Rahman says the idea combines areas of strength for the company — namely high-tech gadgets that can be worn. “A lot of what we were envisioning with this space is, let’s take some interesting innovation both internally and externally, and pull it together in a package that’s highly wearable, highly desirable, easily usable and pair it with the smartest device in your pocket,” he says.

There’s also a big social element. A news feed of data from the device streams updates of what other UP users are up to. Users can join teams, participate in individual or group challenges created by other users or health organizations like DailyFeats, 24 Hour Fitness or Alliance for a Healthier Generation. An example might include collectively walking 100,000 steps with friends by a certain day and time or eating three healthy meals a day. That puts the device in a similar category as Nike’s (NKE) Nike+ products and Fitbit, a device that tracks users’ movements.

One of UP’s major advantages compared to other devices is its design. It looks more like jewelry than clunky exercise equipment. It sports the same high build quality and design sensibility of the company’s other products, which have won numerous awards.

More importantly, UP marks an important product for Jawbone as it continues to branch out into new areas. It’s also a another step toward creating a potential ecosystem of Jawbone products. “What I like about what Jawbone has done is that their design is brilliant and they have a military heritage like Hummer, so they have a legitimacy,” says Dean Crutchfield, CEO of the New York-based consultancy Caffeine. “They’re creating a ‘halo’ for Jawbone as a provider of cool [products].”

In its earliest incarnation, Jawbone (then “Aliph”) worked on noise-cancellation technology for DARPA, the U.S. military’s research arm. But Rahman and his cofounder Alexander Asseily saw the consumer potential in their work and eventually released the first Jawbone Bluetooth headset, crafted by Swiss industrial designer and the company’s chief creative officer Yves Behar in 2006. A private firm, the company does not release sales data.

Key to UP’s success will be whether customers balk at the $99 price point. On the one hand, it falls in line with the premium pricing of company’s products. On the other, some consumers may be skeptical of a $99 device that isn’t as easily categorized. How users like the UP app’s interface is another unknown. Says Crutchfield: “For the first time, the interface really becomes a critical part of the brand.”