Nike Said Backing Off Making Wearble Tech

Reports say sports apparel maker will discontinue making FuelBand
Staff Writer

If you wear a Nike+ FuelBand the one you have now may be your last Nike-made one. By most accounts the sports apparel giant is backing away from making wrist-worn wearable fitness trackers.

The tech web site CNET has reported that Nike has laid off its FuelBand team and pulled the plug on a slimline version of the product originally expected to be launched this fall. A Nike spokesman, while not confirming the report outright, didn’t deny it outright either. And the company has confirmed some layoffs in its digital sports division.

Nike, it seems, has looked at what is shaping up to be a brutal battle for sports tech wearables and decided it is better off developing software and partnering with a hardware maker such as Apple rather than competing in a market in which it doesn’t have an apparent competitive advantage and could prove a costly distraction from those in which it does. Nike has about a 10% share of the fitness tracker market.

Not only is making hardware a different business from making shoes and apparel — different sets of designers and engineers, different product cycles and narrower profit margins — marketing it is different, too. Fitness trackers have a corporate market as companies increasingly provide them to employees to monitor health and wellness for health insurance purposes. Rare is the company that pays for its staff’s sneakers. 

It also means fitness trackers have to have good data management and analytics software. That is an area in which Nike's expertise is nascent.

For now, Nike, says it will continue to support the exisiting version and to continue to develop its Fuel app. But in future you are more likely to be wearing a fitness tracker made by a tech company like Apple than a sports apparel maker like Nike. Facebook, Google and Intel are also making technology investments in the area, and promising to provide more stiff competition for the wearable fitness tracker market leader FitBit and to Jawbone.

The arrival of tech heavyweights makes double sense as smartphone sensors improve. If you are carrying your phone anyway on a run, hike or bike ride, it is probably already doing double duty as a music player, so why not make it do triple duty as a fitness tracker. Furthermore, Apple is expected to launch its iWatch later this year, a device that is likely to be big on health and fitness tracking, and to pack in the other duties, too.

Apple would make a logical partner for Nike in wearables. As it is, its FuelBand is an iOS app; and Apple’s chief executive Tim Cook has sat on Nike’s board for several years. The two firms have been partnering since the launch of the Nike+ iPod shoe sensor eight years ago.

See also: Can Health And Fitness Be Quantified?


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