NEW YORK (TheStreet) - If you've looked at the Nike+ FuelBand Facebook page recently, it's no wonder Nike (NKE) is rumored to be backing away from the wearable technology device, but this might be more of a blessing than a hindrance.
While the company has not officially announced anything, a CNET report on Friday said that Nike was laying off about 70 employees of its hardware team, which are a part of its larger 200-employee Digital Sport division.
CNET reported Nike was planning on releasing a slimmer version of the FuelBand this fall, but has canceled the project and shelved any future "physical" projects related to the device. Nike will continue selling FuelBand for now and is even reportedly coming out with new colors. Nike denied report to CNET saying that the FuelBand "remains an important part of our business." Nike+ FuelBand SE retails at $149 and up, according to the Nike+ Web site.
Employees at Nike Digital Tech, which is responsible for Nike's Web software, were not affected, the article stated. While Nike may be sticking to creating fitness-related software through its Nike+ platform, reports are also surfacing that Nike could be in cahoots to collaborate on the hardware side and signs are pointing to Apple (AAPL), specifically the upcoming iWatch. Apple CEO Tim Cook sits on Nike's board. The FuelBand is already incompatible with Google's (GOOG) Android system and Apple has been poaching experts to focus on its health-related software, according to Fast Company.
Nike may be ceding the wearable tech hardware niche to Apple, "but don't expect them to lay idle during the wearable device movement," says Brian Sozzi, CEO of Belus Capital Advisors and a contributor to TheStreet.
A partnership with Apple iWatch would free up Nike for "more focus and resources could be put into making a very strong app-based user experience. It's much more cost efficient compared to employing both hardware and software teams," Sozzi said.
Apple is rumored to be releasing the iWatch in the third-quarter and there has been no shortage of speculation as to exactly what the iEverything company will focus on in its wearable device. One big area is likely health and fitness as well as preventative health care. Other areas of focus could be industrial, military uses as well as infotainment, enhancing people's lifestyles. That said, Apple CEO Timothy D. Cook has acknowledged the fact that wearable technology needs to demonstrate why people should buy it, as opposed to just being another gadget.
"The wrist is interesting," Cook said at a 2013 tech conference, speaking with Walt Mossberg and Kara Swisher. "You still have to convince people it is worth wearing."
Nike specifically noted in its April 10 release of the launch of Nike+ Fuel Lab in San Francisco, an extension of the 2013 Nike+ Accelerator program, that its history of "developing strong partnerships includes working with Apple to develop products since 2006, when the two companies introduced Nike+ Running. Nike has since created Apps for iOS including Nike+ FuelBand, Nike+ Training Club and Nike+ Move which launched in fall 2013."
Stefan Olander, Nike's vice president of Digital Sport, said in the April 10 release, that" "The demand for simpler data-powered experiences is soaring, and all-day sensing is more available on mobile and wearable devices than ever before. Nike is committed to broadening the use of NikeFuel through collaborations with industry leaders to create smarter products and services."
Equipment, which includes FuelBand, represented just 6.4% of Nike's revenue for the nine months ending Feb. 28 from the Nike brand, according to its third-quarter earnings release last month.
However, looking at the Nike+ FuelBand Facebook, customers clearly aren't happy with the FuelBand product.
I never use mine anymore. Never syncs, time is always off, I can ramble on about the issues etc... Rumor is Nike plans to discontinue this product line. Apple plans to launch a smart watch with health monitoring and samsung I believe launched one a few days ago.
-Todd D. Crawford commented on April 16, 2014
Please - fire the programmers who designed all the interfaces! I have to call Nike at least once a week because the website has issues. Now, my Fuelband app wont' sync and when I go through Nike Connect and the sync cable I get 'Nike Returned an Error' as the message ...very single time.
So, awesome Nike programmers ... if the app doesn't work and the cable doesn't work and plugging the band directly into a USB is also returning the error message ... how am I supposed to log my FuelPoints????
Yes! Uninstalled App (several times)
Yes! Turned Phone off!
Yes! Reinsalled App after turning phone off
Yes! Tried on VARIOUS computers and networks
Yes! Beyond frustrated I have to call Nike multiple times a week!
Either fix the bugs or hire new programmers! I am ready to dump my FuelBand
-Michael Brady Tarr, commented on March 27, 2014
--Written by Laurie Kulikowski in New York.