Under Armour (NYSE:UAA)(NYSE:UA) released its newest product in its Connected Fitness hardware suite this week: Wireless headphones that track the user's heart rate during a workout. These new headphones, which are made in partnership with Harman's JBL brand and ship later this month, could help Under Armour to further its jump into the wearable tech space. Competing against industry giants such as Fitbit (NYSE:FIT) and Apple, here's how these kinds of new offerings bode well for Under Armour following its expensive foray into this industry.
Under Armour's newest tech toy
Under Armour has made heart rate tracking a priority of its Connected Fitness hardware. Its first fitness-tracking band, released as part of the Healthbox that came out earlier this year, tracks a user's resting heart rate while sleeping. The kit also comes with a chest-strap heart-rate monitor for more serious tracking during workouts.
These new headphones allow users to record their heart rate and get audio updates about it during a workout. The technology works similar to heart-rate tracking on the wristband, which uses what's called photoplethysmogram optical sensors that shine light on the user's skin to see how quickly blood is moving through the capillaries.
Brian Pitstick, the Under Armour business development director overseeing this partnership with JBL, said in an interview that they estimate 85% of people wear headphones while working out, so putting a sensor there makes it easy for users to track heart rate without any added gear. The ability to have audio coaching during a workout -- such as telling the wearer when he or she reaches a target heart rate -- or having the ability to simply tap the right ear bud to get an instant reading, makes it easy for the wearer to make use of these numbers for a more effective workout. "We found that athletes are constantly looking for ways to workout smarter, not harder," said Pitstick, "and we've found we can do that with heart rate training."
Why this helps Under Armour further itself from the competition
Under Armour's investment in digital and hardware technology has not been cheap. Under Armour spent over $700 million in the past few years to acquire various fitness apps and also released a full suite of Connected Fitness products this year. Still, this segment currently makes up less than 3% of Under Armour's total sales. This is also in an industry dominated by big names such as Fitbit and Apple on the hardware side, and Nike and many others on the digital side. Is this expensive investment worth it?
These headphones provide insight into how Under Armour is continually setting itself apart as not just a clothing brand, not just a digital health provider through its apps, and not just a hardware provider -- but increasingly all three, something that no other company is doing as effectively. Under Armour is continuing its open platform design, meaning that other brands' hardware products work with its suite of apps, and these headphones pair with the Apple Watch or any other music player with Bluetooth ability. In this way, Under Armour hopes to continue spreading its influence not just to its own core users, but to the wider fitness community.
Under Armour doesn't provide details on sales of its Connected Fitness hardware, but the company does say that it now has more than 180 million users across its suite of apps. Aside from its growing apparel and footwear business, both of which are continuing to grow impressively, Under Armour has continued to up its game in the digital and hardware space. While its investments to get there have certainly not been cheap, they have been successful in at least bringing users to its platforms and increasingly impressive tech products to market.
Seth McNew owns shares of Apple, Nike, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool owns shares of and recommends Apple, Nike, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. 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.