Will Nike Help Apple, Inc. Revolutionize Wearables With the iWatch?

Nike and Apple may be cozying up. Are the two companies planning on working together on Apple's next big product?

Jul 13, 2014 at 10:50AM

Apple (NASDAQ:AAPL) undoubtedly has a close relationship with Nike (NYSE:NKE). Apple CEO Tim Cook has sat on the sports apparel company's board longer than he has been a CEO of Apple. But the two companies may soon cozy up even more.

Revolutionary Iwatch Concept Dimensions

iWatch concept design by SET Solution. Dimensions and glass are designed based on the latest iWatch rumors. Image used with permission. Watch a video of this concept here

Apple's journey to wearables
Tim Cook has pointed out for some time now that he's interested in the wearables category. At the All Things Digital's D11 conference in May 2013, Cook said that he believed wearables would become "a very key branch of the tree" for Apple. Criticizing the idea of wearing Internet-connected glasses, he said that: "The wrist is interesting. The wrist is natural."

At the D11 event, he was even wearing the Nike Fuelband -- a smart device with several sensors to retrieve health data that you wear on your wrist. But he said the category is ripe for disruption and "exploration," and that there are a lot of problems to solve in this space.

More recently, there are rumors heating up around Apple's so-called iWatch device that are beginning to insinuate that Apple will, indeed, launch a smartwatch by this fall. The device will sport "more than 10 sensors to track and monitor health and fitness data," according to the Wall Street Journal.

Apple and Nike to cooperate on a smartwatch?
Jumping into a health and fitness product for the first time, however, could be a challenge for Apple. It likely will take some excellent marketing for the tech giant to prove it's a great fit in the nascent smartwatch category.

Perhaps this is where Nike may come in. Several rumors are shaping up to insinuate that Nike could be in on Apple's iWatch. Nike could give Apple important clout in the fitness market.

Nike Fuelband

Nike FuelBand. Image source: Nike.

Cooperating at the wearables level wouldn't be a first for the two companies. Nike tapped into Apple's M7 motion coprocessor in the iPhone 5s before the device was launched, giving Apple an app that made use of the processor when the phone hit the market.

Iwatch Concept

iWatch concept design by SET Solution. Image used with permission.

Which reports point to Nike possibly working with Apple on the iWatch? The first came when, earlier this year, Nike said it's going to discontinue its efforts in wearable hardware, and focus its efforts on software. An unnamed source at CNET asserted that Nike would lay off the 80-person team responsible for the FuelBand. In a CNBC interview one week later, Nike CEO Mark Parker said that he's excited about where Nike's relationship with Apple is going, and that he's "excited about what's to come." Further, he confirmed that Nike's focus will be on software, going forward, and that it will be integrated into both Nike products, as well as those of partners.

More recently, a report from 9to5Mac shows that Apple has even hired several former FuelBand team members.

Given Nike's reputation in health and fitness, and experience in smartwatch hardware, a deeper level of collaboration between the two companies on the upcoming iWatch makes sense. Even more, such collaboration could serve as a marketing tool for Apple if it decides to make a big play in the fast-growing category.

Apple may spark a revolution, and this small company may benefit
The iWatch will almost undoubtedly shake up the wearables industry. But one small company may benefit from the nascent industry more than Apple. Even better, its small stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, just click here!

Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple and Nike. The Motley Fool owns shares of Apple 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.

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