In the never-ending race for consumer wallets and hearts, there is a need to compete for consumer wrists, as well.
Nike hasn’t fared well in this challenge, in days past. Its Nike+ FuelBand SE activity tracker is excellent, but not enough for CEO Mark Parker. Nike’s FuelBand division laid off some 70-80% of its FuelBand division team (55 employees) a little over a week ago, an unnamed official interested in retaining his or her identity reported to CNET. Additionally, Nike halted the idea of updating the FuelBand for a second release this Fall, though the idea had been in the works for some time.
The reason? Mark Peter says that the company wants to focus on the software experience more these days than hardware. Though he doesn’t say it directly, it seems to be the case that tech companies such as Samsung, Sony, Google, and eventually Apple (with the long-rumored iWatch that may emerge this Fall) have forced the FuelBand team out of business. Activity trackers such as the FuelBand are reminiscent of an earlier time when smartwatches were practically unheard of, and fitness bands were a niche product for the physically fit.
Flash forward to 2014, and smart bands on our wrists are designed for more than just fitness/activity tracking, but notifications (emails, tweets, calendar events, etc.). Additionally, Samsung’s Gear Fit fitness band has a contemporary look and feel that doesn’t leave room for anyone – not even Nike’s FuelBand SE—to compete with it. Future mobile wearables will only diminish Nike’s already-fading influence.
Nike says that it’s committed to continuing the Nike+ FuelBand SE line and that it wants to create six new colors for the activity tracker by the end of the year. “The Nike+ FuelBand SE remains an important part of our business. We will continue to improve the Nike+ FuelBand app, launch new METALUXE colors, and we will sell and support the Nike+ FuelBand SE for the foreseeable future.” These words imply that the FuelBand will remain part of Nike for now, but the future could always bring a different result. While the majority of the FuelBand team has been laid off, a portion still remains – some believe to continue a fitness line that will end eventually.
With its FuelBand sales in the large decline, what new direction will Nike head in? The company will still remain in the business of providing excellent software for wearables and remain part of where wearable tech is headed in the future. CEO Parker noted that Apple is one of Nike’s most visible partners, and that relationship will continue. In a CNBC interview, Parker said, “You’re going to continue to see us commit to this area, to focus on expanding the reach. Today, we’ve about 30 million FuelBand users…we’re hoping to push that to over 100 million. We’ve partners that we work with…obviously the most visible partner we’ve is Apple. We’ve been working with them for a long time. And we’re excited about where that relationship will go forward.”
Could it be the case that Nike’s team will partner up with Apple to create the fabled iWatch? With Cupertino, anything is possible. If this is the case, however, it appears that the traces of the FuelBand SE may be present in the new iWatch. If sources close to Apple are right, Apple’s iWatch will be more of an “iBand” with smart sensors than an iWatch.