Nike is cutting their FuelBand team

Last week CNET reported that Nike will discontinue its FuelBand fitness tracker wristband, and instead focus on athletic and fitness software that can run on devices from other manufacturers. Many of the hardware engineers working on the product were fired.

Later Nike clarified the situation saying that they would continue to support past products and work to improve the Nike+ FuelBand App, but would not commit to releasing a new product. A slimmer FuelBand was supposed to be released this summer but will now likely be canceled.

I expect the Nike+ FuelScore to live on; it is a proprietary fitness measure/metric that combines the estimated number of calories burned with the intensity of the workout. I am less optimistic about the continuation of the Nike+ API. Without a physical platform, there is no need to build an ecosystem for third party apps which the API facilitates.

The elephant in the room is the iWatch. Nike and Apple have a close relationship with Apple CEO Tim Cook sitting on the Nike board. Nike is probably being kept abreast of the iWatch plans including its likely release later this year. As I have posted earlier, speculation is rife that iWatch will possess a variety of fitness and medical tracking functionality.

One would imagine Nike would like to position itself as the most prominent fitness app on the iWatch, and perhaps Apple will give them a helpful boost via special product placement. Pushing their brand on the iWatch to Apple's affluent clientele can only stimulate sneaker sales. The fitness tracking field has become quite competitive with numerous devices with different form-factors. Device prices are falling, and so Nike may have wanted to leave the hardware battle to others while exploiting their close relationship with Apple. Presumably Healthbook will come with an API that the Nike+ App can integrate with.

In the bigger picture, the question is how to create the stickiest ecosystem to draw in consumers, and whether the software or hardware (or perhaps a combination of the two) matters more. The battle for consumer mindshare has only just begun, and it will be interesting to see how it plays out in the potential multi-billion dollar mobile health technology market.

Figure 1. The Nike FuelBand is no more (Getty Images).