This Early Wearables Leader Might Abandon Ship

Nike might be getting out of the wearables hardware business, but it could very well partner with Apple in some way instead. That would be a win-win for both companies, who happen to share a common connection.

Evan Niu
Evan Niu, CFA and Erin Kennedy
Apr 13, 2014 at 12:00PM
Technology and Telecom

Wearable fitness tracking devices are enjoying an enormous amount of consumer interest and excitement at the moment, and Nike (NYSE:NKE) has been a leader in this space recently with its FuelBand bracelet, as first reported by CNET. Now however, the sports apparel titan may be considering leaving the wearable fitness device business. Although Nike has never disclosed any data on its sales numbers for the FuelBand, the NPD group estimated the market for these devices at $330 million in 2013, with Nike holding a 10% market share. That suggests $33 million in revenue from its devices, a drop in the bucket compared to its $27 billion last year in total revenue.

In this segment from Friday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu discuss the interesting connection that may see Nike pairing with Apple (NASDAQ:AAPL) on this technology going forward. Apple CEO Tim Cook has sat on the board at Nike for nearly ten years, and Nike's fitness data platform that works with its fitness tracking devices, Nike+, has always been exclusive to iOS. Apple is expected to debut its own hardware in this space this year with its iWatch, and could benefit greatly from Nike's experience and user data in this market. Evan points to a number of reasons why this could be a win for both sides.