Everyone knew that many of these wearable computers weren’t long for this world. Few predicted that the first big failure would be Nike’s (NKE) Fuelband.
Yet Nike’s experiment with a wrist-based fitness computer seems to be in peril, if not completely doomed. CNET reported on Friday that Nike had laid off its engineering staff working on the project and would stop making wearable computing hardware. On Saturday the company pushed back, saying the Fuelband remained an important part of its business and it would continue supporting the newest model, the Fuelband SE, for the foreseeable future. At the same time, Nike acknowledged “a small number of layoffs” and stopped short of saying it expected to make new versions of the wristband.
“Nike is committed to Nike+, to NikeFuel, and to driving innovations that bring richer experiences for all athletes,” KeJuan Williams, a spokesperson for the company, wrote in an e-mail. “We will continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving.”
If Nike does move away from hardware, it would sacrifice its primary advantage in the world of wearable computing: its understanding of what things people will actually wear. Sure, NikeFuel—the company’s mysterious point system that converted wrist movements into a measure of overall physical activity—was a clever way to keep people using Nike’s gadgets. It was part of the reason credulous writers have gushed about the company as if it were Apple’s (AAPL) fitness-y second coming. But it’s hard to see a bright future for a measure of physical activity that isn’t linked to a popular device dedicated to monitoring it. No metric will ever be as hip as a pair of fresh Jordans.
Nike may be counting on other companies to carry its water. Last year it ran a program to help other companies develop applications that built on NikeFuel. Earlier this month, it said it was opening the Nike+ Fuel Lab in San Francisco, which it described as a “pivotal expansion” of the same concept. None of these partners would actually build hardware, though. With or without the Fuelband line, smartphones seem to be an obvious choice for tracking NikeFuel; more than 45 million Americans used a fitness or health smartphone app in January, according to Nielsen, and Nike already has a number of iPhone fitness apps.
So this may just be a recognition of how people are using technology to monitor their fitness. Still, the failure of one of the most well-known fitness tracking devices could reinforce the existing public skepticism about wearable computing. “Consumers don’t understand why they need wearable tech devices,” says James Russo, a senior vice president at Nielsen. “That came through very clearly in our research.”
If people are going to be convinced about wearables, Nike has been one of the best companies to convince them. If it does step to the side, that leaves Apple, whose Fuelband-sporting chief executive officer sits on Nike’s board, to pick up the slack. Nike and Apple have been collaborating on fitness tech for a while; Apple added sensors to its latest phones that allow the devices to measure NikeFuel. An eventual collision in their interests seemed likely. Now Nike seems to have cleared the path.
