One of the first mainstream brands to make wearable fitness electronics is getting out of the game. Nike confirmed to CNET this afternoon that the company is laying off people in its hardware division, which makes the FuelBand line of fitness trackers. "As a fast-paced, global business we continually align resources with business priorities," Nike spokesman Brian Strong told The Verge in an email. "As our Digital Sport priorities evolve, we expect to make changes within the team, and there will be a small number of layoffs." The company declined further comment.
Citing an unnamed source, CNET reports that as many as 55 people on Nike's 70-person hardware team were laid off on Thursday. (A rumor of the layoffs first surfaced on Secret, the anonymous social network.) In addition to the FuelBand, Nike's hardware division makes the Nike+ sportwatch and other peripherals. The original FuelBand launched in 2012, but Nike was slow to iterate on it. Last fall, the company released a new version that added Bluetooth support and new color options but little else. Around the same time, Apple reportedly hired Nike's design director for the FuelBand to come work on its own wearable technology. CNET reports that a new FuelBand project was scrapped along with the other projects in Nike's Digital Sport division.
A big shift to software
Moving forward, Nike will reportedly shift its focus to fitness software, including its Nike+ API, which other hardware makers can integrate into their own wearables. The company also launched a software incubator in San Francisco last week called Fuel Lab that will help companies integrate NikeFuel, its fitness measurement system, into their own products.
Nike's move comes as the first wave of fitness wearables has failed to gain widespread mainstream adoption. At the same time, Nike's close partner Apple is expected to enter the market as early as this year. Apple's CEO, Tim Cook, is a longtime member of Nike's board. Given the expense and difficulty of making world-class hardware, along with the lukewarm reception these products are getting from customers, Nike appears to have decided that it's better off letting others build the next generation of devices.
Update, April 18th, 8:25 PM: This story has been updated to include Nike's comments.
Update, April 19th, 2:34 PM: In a statement sent to Recode, Nike state that the FuelBand SE remains "an important part" of their business going forward. "We will continue to improve the Nike+ FuelBand App, launch new METALUXE colors, and we will sell and support the Nike+ FuelBand SE for the foreseeable future." However, it's still not clear if the company plans on releasing new hardware in the near future.