Sportswear giant Nike is cutting back on its “NikeFuel,” brand, the array of Nike digital products, using a proprietary measurement of physical activity. The usefulness of the measurement depended on who you talked to, notes The Oregonian.
Nike confirmed to Re/code that it would make a “small number” of layoffs, but denied that it is shutting down its hardware design efforts.
Nike is not closing the doors of its 4-year-old, tech-focused Digital Sport division, says C/Net, nor making drastic moves like pulling the FuelBand SE off store shelves.
The second-generation FuelBand, released in November, will still be sold and will receive application support for “the foreseeable future,” with updated colors as well, the company confirmed in a statement provided to CNET. However, the company laid off as many as 55 engineers and other hardware and manufacturing specialists who oversaw the development of future products, a person familiar with the matter told CNET last week.
Last year, FuelBand held a 10% share of the smartphone-enabled fitness tracker market, versus 68% for Fitbit and 19% for Jawbone Up, NPD Group reported in January.
Intel reportedly has paid north of $100 million to acquire Basis, which makes wristwatch health trackers. Basis has some 7 percent of the market, says TechCrunch, versus competitor Jawbone which has 21 percent. Wearables Insider has doubts on such a rumored deal.
The annual sales of the entire, industry-wide digital fitness category, according to the NPD Group was $330 million, while Nike’s annual sales at the end of its most recent fiscal year was $25.3 billion, making it a tiny fraction of Nike’s business.
Google is rumored to be considering a smartwatch as part of the next-generation Nexus release, as is Apple.
In 2013, Fitbits, Jawbone UPs, and Nike FuelBands accounted for 97 percent of all smartphone-enabled activity trackers sold at brick-and-mortar stores or through big ecommerce sites, according to NPD Group, which tracks the digital fitness device market. Currently, Qualcomm, Texas Instruments and STMicroelectronics, are providing the bulk of the sensors for wearables.
A recent report from BI Intelligence forecast a $12 billion market for wearable devices, led by wrist-worn gadgets.