Nike fires Fuelband team, announces it will stop making wearable technology [Update]

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Nike initially planned to release a new version of their flagship Fuelband activity tracker later this year, but now that may no longer be the case.​​

According to reports, Nike has fired the majority of their Fuelband team, and the company plans to cease any further forays into wearable technology. In an email with CNET, Nike spokesman Brian Strong noted the company's desire to shut down their wearable tech operations.

As a fast-paced, global business we continually align resources with business priorities. As our Digital Sport priorities evolve, we expect to make changes within the team, and there will be a small number of layoffs.

According to CNET, between 70 and 80 percent of Nike's Digital Sport devision -- or around 55 people -- were laid off. Despite the relative popularity of Nike's Fuelband (which netted the company an 18 percent rise in profits following the Fuelband's introduction in 2012), the company may simply be looking towards new ways to move forward with their technology division. Nike currently offers a range of smartphone apps which allow users to track their physical activity and record their running distances, and with significant improvements in sensor technology, phasing out wearable tech like the Fuelband makes sense. 

While Nike may be getting out of the wearable tech market, many other companies are looking to enter it. In December of last year, LG's Lifeband Touch activity tracker was leaked a week before the consumer electronics show CES. Additionally, industry leaders such as Samsung continue to delve into the market despite previously poor sales, with the recent release of their new Galaxy Gear 2 smartwatch. Wearable technology may be an underrepresented market, but with the continual development of new products, it's certainly far from dead.

Update: In a statement to Re/code, Nike has denied that they will completely shut down their Fuelband line. According to Nike representatives, the company will continue to support and sell many of its current products and services. "The Nike+ FuelBand SE remains an important part of our business", said a Nike representative in an email to Re/code. "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."

However, this statement does not make clear whether Nike will produce new Fuelband products in the future beyond its current lineup.

Source: CNETImage via Nike

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22 Comments

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Maybe if they made app for Android, alot more people would buy it. I guess have Tim Cook as board member really helped keep android app out of development.

This wasn't a shutdown due to lack of sales. The article even states that the Fuelband lead to an 18% rise in profit.

Nike went on record after the release of the Fuelband SE to say that an Android version of the app was in development. It's just that to get the full mobile experience, the phones had to support Bluetooth LE, and there were not a lot of Android phones on the market with that support at the time. Also, if Android users were dying for a Fuelband, they could still purchase one. They just had to plug the band in using its built in, full size USB plug to their PC to sync the data. I know, it's not as cool.

They must see something they don't like on the horizon. The fact that they lied about "small number of layoffs" could just be BS not to deter current sales, but it was BS all the same.

This has everything to do with Apple releasing a wearable this year. Nike will partner with Apple as they have been already with the exclusive apps and will incorporate tech with the apple wearable. You heard it here first.

S7R1K3R said,
This has everything to do with Apple releasing a wearable this year. Nike will partner with Apple as they have been already with the exclusive apps and will incorporate tech with the apple wearable. You heard it here first.

That would be an extremely believable outcome to be honest - wouldn't surprise me in the least given their Nike+ collaborations over the last few years.

UPDATE

In a statement to Re/code, Nike confirmed a "small number" of people within its digital division were been let go, but refuted CNET's report that it is closing the team's hardware arm.

"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."

WTF
I just bought fuelband SE earlier this month. I liked it. I get to compete with my friends and after its purchase I have been spending a bit more time in the gym.

Although last night I saw reviews of galaxy gear 2 smart watch with HR sensor in it and I liked it alot. I guess I'll have to get that one now.

I love my fuel band, however I can see why Nike is choosing to do this. I think fitness trackers are about to make a huge leap into smart watches, and phones as well are about to make a leap into fitness tracking. Nike, probably sees this and wants to duck out before they loose money. Now of course Nike, if they were really invested into wearables would keep pursuing this, but Nike isn't a big Tech company when it comes to wearables. The fuel band is about as techie as Nike has gone, I just don't see smart watches being a thing for Nike. Now their basic pedometers and heart monitors though, those it sounds like they will keep

Makes me wonder if there's some deal for them to say... jump on board with Apple giving them full support to share in the wealth together. Just a thought at least, absurd as it may sound. :p

You might not be too far off, since their are a few signs that point to it. My theory is that since there are smart phones that have motion tracking capabilities, trying to convince people to buy what can be seen as a redundant product can be a tough sell, so it makes more sense to develop software to work with it instead.

NerdyTech said,
Never heard of it. (I think that's why)

That's hard to believe, since it was one of the first all day wearable fitness band. (At least that I know of).

So you fire your team and intend to leave a market that is not only making you tons of money, but is also expanding. Sounds like good business sense to me!

LightEco said,
So you fire your team and intend to leave a market that is not only making you tons of money, but is also expanding. Sounds like good business sense to me!

I would at least sell it if you are not making money. By firing the team they loose the value in the product as people who buy them buy it for the employees they bring. I can see someone like Samsung or LA Fitness might be interested.

All the figures I've seen suggest that the wearables market is a flash in the pan that's not making money. Very few people buy these in the first place and those who do tend to give up on them quite quickly. This move seems to confirm that that is the case.

jakem1 said,
All the figures I've seen suggest that the wearables market is a flash in the pan that's not making money. Very few people buy these in the first place and those who do tend to give up on them quite quickly. This move seems to confirm that that is the case.

But many companies buy non profitable things in the hope they can turn them around. See IBM selling its printers to Lexmark and its OEM business to Lennovo? Both have been profitable post-IBM and IBM made something in return from selling them.

I wonder what's going to happen with their Nike+ app? Maybe open it up so other fitness trackers can use it?

I stopped wearing mine once I switched to Android, otherwise it would still be on my wrist. Although, I felt it was pretty limited to what is out now.