Nike fires majority of FuelBand team, to stop making wearable hardware

“Nike is gearing up to shutter its wearable-hardware efforts, and the sportswear company this week fired the majority of the team responsible for the development of its FuelBand fitness tracker, a person familiar with the matter told CNET,” Nick Statt reports for CNET. “”The company informed members of the 70-person hardware team — part of its larger, technology-focused Digital Sport division comprised of about 200 people — of the job cuts Thursday. About 30 employees reside at Nike’s Hong Kong offices, with the remainder of the team at Nike’s Beaverton, Ore., headquarters.”

“Nike’s Digital Sport hardware team focused on areas like industrial design; manufacturing operations; electrical and mechanical hardware engineering; and software interface design. Products included not only the FuelBand but also the Nike+ sportwatch and other, more peripheral sport-specific initiatives,” Statt reports. “Of those 70 employees, about 70 percent to 80 percent — or as many as 55 people — were let go, the person said, asking not to be identified because the information was confidential… The shoemaker isn’t throwing in the towel on technology. Rather, it’s turning away from hardware and realigning its focus exclusively on fitness and athletic software, a strategic shift that would still benefit the company in the long run, analysts said… Nike will not, however, stop selling the second-generation FuelBand SE for now, the company confirmed. ‘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,’ Nike spokesman Brian Strong said in a follow-up comment.”

“As Nike redirects its wearable efforts toward software, it’s avoiding the competition from a bevy of new devices that will further crowd the market, namely the Apple ‘iWatch,'” Statt reports. “As Apple enters the fray, Nike has a potential partner. Apple CEO Tim Cook, who was seen wearing a FuelBand at the company’s launch of the iPad Mini in October 2012, sits on Nike’s board, and has for the last nine years. That relationship has been fruitful, helping Nike enter the wearable market as early as 2006 — with the Nike+iPod shoe-sensor package — with a strong brand partner.”

Statt reports, “A partnership, say analysts, would be a no-brainer. ‘Apple is in the hardware business. Nike is in the sneaker business. I don’t think Apple sees Nike as competitive. It’s likely that an Apple hardware offering would be supportive of the Nike software,’ Jim Duffy, a Nike analyst with Stifel, Nicolaus & Company, said when speaking with CNET last week. ‘Nike would be content to let Apple sell devices, as long as they would be supportive of the apps.'”

Read more in the full article here.

MacDailyNews Take: Expect the Nike logo, at least (and maybe even Phil Knight) to appear during an Apple keynote event in the not so distant future.