Is an Apple-Nike partnership on the way?
(CNN) — It’s a simple thing, really, the rubber and stainless steel band that a well-known CEO frequently wears around his wrist.
But the Nike FuelBand that Apple’s Tim Cook has been seen sporting at multiple public events is just one clue about a possible deal between Apple and Nike that could be part of the sales pitch when a rumored Apple watch hits the market.
Late on Friday (the traditional time of the week for companies to release bad news), came a news report that Nike had laid off much of the team responsible for the FuelBand and would not continue to update the line of wearable gadgets, which measure physical activity and monitor things like heart rate and calories burned.
Nike had planned to release a new, thinner FuelBand in the fall, but those plans have reportedly been shelved and the company won’t say whether there will be a new one. Nike has said it plans to continue supporting the current FuelBand for the “forseeable future” and that new color options will be available.
Neither Nike nor Apple replied to messages seeking comment for this article.
Nike told tech blog Re/code that only a “small number” of staffers were laid off and said it remains committed to the Fuel line of fitness products.
Still, the retreat seems odd for a company that has made its name in sports equipment — and has led to speculations that Nike may be working on a new partnership with Apple.
“Obviously Apple has enjoyed a healthy relationship with them over the years,” said Brian White, a Cantor Fitzgerald & Co. analyst who follows Apple. “Our view has been that the fitness band will largely fold into the smartwatch in the future and most of the players will exit the market. If I were them, makes more sense to partner with Apple, but that is just my opinion.”
Even Nike’s statement seems to leave the door open that an Apple deal might be the end goal.
“Nike is committed to Nike+, to NikeFuel, and to driving innovations that bring richer experiences for all athletes,” KeJuan Williams, a spokesperson for the company, said in a written statement. “We will continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving.”
Yes. “Leverage partnerships.”
“Apple is in the hardware business. Nike is in the sneaker business. I don’t think Apple sees Nike as competitive,” Jim Duffy, a Nike analyst with Stifel, Nicolaus & Company, told CNET. “Nike would be content to let Apple sell devices, as long as they would be supportive of the apps.”
Of course, a forthcoming Apple-Nike wearable product is still just conjecture at this point. But consider:
— Already, Apple’s iOS system is the only mobile system that can be used with the Fuel Band and its set of apps.
— Cook has sat on Nike’s board of directors for the past nine years. And the two companies have already teamed up to create the Nike+ mobile app for iPhones and iPods.
— In September, Apple hired Nike’s Ben Shaffer, the man behind the “Innovation Kitchen” that created Fuel Band.
— Apple is the highest-profile company that has not yet entered the wearable tech field — despite the fact that rumors of an “iWatch” have been swirling for years. With Google, Samsung and other competitors already selling wearable gear, it would make sense for Apple to get into the game sooner rather than later.
Apple’s Worldwide Developers Conference is set to begin on June 2, and the company has used the event in the past to announce new products.
Alternately, Apple has made a habit of introducing a new iPhone every fall, in advance of the holiday shopping season. It would certainly make sense to unveil a new product then as well.
By Doug Gross
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