Nike Pulls a Google by Killing the FuelBand

Nike follows in tech giant Google's footsteps with its recent decision to kill its wearable FuelBand, and investors should love it.

May 11, 2014 at 3:30PM

Sports apparel and search engines are about as different as businesses can get. However, fitness giant Nike (NYSE:NKE) is following the lead of tech power Google (NASDAQ:GOOG) (NASDAQ:GOOGL) in one recent move. And Nike investors should be eating this up.

I'm referring, of course, to Nike's highly publicized decision recently to pull the plug on its popular FuelBand wearable bracelet and its subsequent choice to focus its efforts on dominating the software side of the coming market for wearable fitness software. In doing so, Nike proved that it understands Google's key lesson regarding software.

Nike Fuel Bands

Source: Nike.

Leave the hardware, take the software
Today, Google's Android mobile operating system is the de facto standard that powers the majority of the world's smartphones and tablets.

This didn't happen by accident.

Sure, the business objectives were different from Nike's (Google did so to maintain its search dominance). But by not binding its software to any single one device, Google ensured that its software could spread everywhere outside of Apple's high-margin walled garden. Nike, by killing the FuelBand in favor of software, has set the stage to dominate fitness software across the board.

In the following video, tech and telecom specialist Andrew Tonner praises the move on Nike's part and argues that this Google-esque tactic best positions it to compete as the market for wearable devices takes off.

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Andrew Tonner owns shares of Apple. The Motley Fool recommends Apple, Google (C shares), and Nike. The Motley Fool owns shares of Apple, Google (C shares), and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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