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Ten Thoughts On The Demise Of Nike's Fuelband

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Ten Thoughts On The Demise Of Nike's Fuelband

Recent, unconfirmed, reports suggest that Nike is in the processing of closing down, or at least scaling...

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Recent, unconfirmed, reports suggest that Nike is in the processing of closing down, or at least scaling back, the Nike Fuelband, its wearable fitness monitor, which it launched in 2012. The news, coming as it does amidst the explosion of media coverage of the “Wearables” wave, is, at first glance, somewhat surprising.  

We here at the Center for the Future of Work have been vocal in pointing to the Fuelband as an important part of our Code Halo narrative. I started wearing one pretty soon after it launched and it was a key reference point as we began to think through what this early stage innovation might become over the course of the next few years. Given that, it’s worth providing some quick initial thoughts on what Nike’s move may mean in the grander scheme of things:

1 As a former Gartner analyst you might imagine that I’m contractually obliged to mention the Gartner Hype Cycle as often as possible. Honestly, I’m not! It is though the simplest and most obvious place to start when thinking about any new technology. Wearables is going through the Hype Cycle and Nike’s news may mark the moment the Cycle hit the “peak of inflated expectations”. Though Nike’s moves may have been unpredictable, what has been predictable has been the skeptic’s glee in crowing “I told you so … Wearables! Just another bandwagon that is going nowhere”.

2 The path to success in Wearables will be long and winding. As a former Cloud Computing analyst, I’m only too familiar with the twists and turns the Cloud journey took from its v1 in 1997 (Corio anyone?) to its current v5 or v6 (you decide!) with AWS and Google. The Wearables journey will be similarly unstraightforward and is bound to be full of missteps and cul de sacs that early pioneers take.

3 Wearables are today where “mobile” was in 1995. I remember getting a cell phone back in the summer of 1995 and not being quite sure what to do with it when I’d got it home (it came free with a TV  I bought!). I put it back in its box after the first flush of novelty wore off. I got a second one in 2002. Still didn’t really care for it then. Mobile didn’t really make sense to me until I got my first iPhone in 2007. It’s going to take years before Wearables really make sense to people and become as “ordinary” as cell phones are today. After wearing my Fuel Band for about 18 months I found I wasn’t wearing it as much as I had. I liked it; the dashboard was cool, the on screen monitor was cool, it was definitely a conversation starter at dinner parties, but as a pretty dedicated gym goer it wasn’t really telling me anything I didn’t know, and wasn’t really doing anything much for me. (Here’s a little bit more on my thoughts about the Future of Work(ing Out) btw if you’re interested.

4 The Wearables experiment is exactly that; an experiment. As in any experiment, participants need to create a hypothesis, test it, analyze the results, refine the hypothesis, test it, and analyze the results. Etc, etc, etc. Rinse and Repeat. At this stage no-one knows what the exact winning formula will be. All of the varying elements involved – form, functionality, fashion, marketing strategy, pricing, support models, financial models etc - need to be tried, tested and refined. This will take time, money, and patience. Press reports suggest that Nike are getting out of the hardware manufacturing element of Wearables but will continue to develop the accompanying software. This suggests Nike is refining its hypothesis.

5 Nike knows how crowded the Wearables market is getting (and going to get) and see a partnership/ecosystem play is more sustainable over the long term than its current DIY approach. As has been reported, Tim Cook, Apple’s CEO, sits on the Nike board and, it’s obvious to imagine, must have been giving the Nike leadership team a good sense of what Apple is planning to do with Wearables in the not too distant future. Nike may have come to the conclusion that competing with Apple in Wearables would not be a smart play. It’s now a safe bet to assume that when (rather than if) the Apple iWatch (or whatever it is actually called) launches it will have fitness monitoring functionality built in. Apple’s imminent Healthbook is another piece of this jigsaw.

6 Comments in the MSM and the blogosphere point to some unflattering commentary from folks who have been actually involved in Nike’s initiatives. Sour grapes aside it does make one remember the old adage “strategy is for amateurs, logistics is for professionals”.  Not matter how good and prescient your vision is the ability to execute on it is key. (There’s the Gartner background kicking in again!). It’s not too far-fetched to imagine that Nike – an apparel manufacturer – has found it hard to stick the hardware and software landing. Lots of hardware and software companies find that hard!

7 Reports of the Fuelband’s demise may be greatly exaggerated. Nike has denied much of the speculation in the media over the last few days. This may simply be a tack or a jibe.

8 Pioneers often get arrows in their back. That’s why most people stay home.

9 I hope it all works out Nike. Keep just doing it.

10 If you think that Nike’s hiccup/flameout (at this moment, who can really tell?) is the end of the Wearables, Internet of Things, Machine to Machine, Smart Machine, Code Halo explosion I think you are severely mistaken. But if you think there’s a straight line correlation from where we are today to where things will be in five years, ten years, twenty years, then that would be a significant mistake too. The Internet of Things (Wearables is really simply a subset of the IOT) is such a major dynamic with so many sub-markets, themes, components, dynamics, technologies, competitive factors etc in play that the fate of one technology from one vendor is somewhat irrelevant if you keep the bigger picture in mind.  The Fuelband was (is) a great “thing” and may or may not still prove to be a huge winner for Nike. But whatever mentions it gets when the history of this new industrial revolution is written it will certainly be in there. And I would wager it will get a pretty significant mention. Mind, it’s going to be a huge book with plenty of room to spell out the full story … or should that be the “fuel” story.

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