According to CNET, Nike plans to exit Fuelband hardware, their wearable technology for tracking exercise throughout the day.
What does this suggest?
- Apple CEO Tim Cook sits on Nike’s board. It is likely that there is a secret collaboration between Nike and Apple that led to this decision.
- This decision would make sense if Apple is planning to release a wearable which makes the Fuelband obsolete. Such a device should be both cheaper, smaller and more wearable than the Fuelband. Otherwise, it is simply not a better fitness tracker.
- Nike is not abandoning fitness tracking. Instead it is focusing on software.
- Nike is releasing a public API for Nike+ so third party trackers can plug into it.
- Although smartphones, especially the iPhone 5s with the M7 chip, are getting better at tracking movement throughout the day, not everybody carries the device on their body at all times. Phablets for example, are often carried around in purses in Asia, even by men. This limits their usage as fitness trackers.
- Carrying your expensive smartphone with you when you exercise is not the best experience.
- If we want to make our smartphones better fitness trackers, we would want a smaller device, not a larger one.
- I doubt that Nike is abandoning the Fuelband in favor of devices that people are less likely to use while exercising.
- Nike obviously thinks that third parties can create better fitness tracking hardware then what they are currently capable of. What product do they have in mind? Is it the Jawbone? Is it the Samsung Gear? Is it Android Wear? I don’t think that they are too compelling and think that Nike is looking more at future devices.
- Keep in mind that Nike has not released Fuelband software for Android devices. Their Fuelband app is iOS only.
- The Nike brand is totally capable of selling at premium prices without being drawn into a price war. Their main business is selling shoes at high prices. Cheap rivals are not likely their main concern.