Nike’s FuelBand runs out of steam and into trouble

The race to dominate the nascent wearable technology market is already witnessing early stumbles, even before one potential winner has finished limbering up.

Nike is considering pulling its FuelBand device out of the competition ahead of Apple's entry later this year. Following a report on tech news site CNET, Nike confirmed it was laying off staff from its digital sports team and refused to commit to future device launches, although it insisted the FuelBand remained an "important part of our business".

Next big thing
Health-tracking gadgets from the likes of Nike, Fitbit, and Jawbone measure how far the wearer walks or runs in a day, the vigour of a workout and the quality of their sleep. Such devices have been tipped as the next big thing in technology after the smartphone, yet some think Apple will trounce them all when it launches its much-anticipated "iWatch".

Sources familiar with Nike’s plans say it will focus on making apps instead of the higher-priced but lower-margin FuelBand hardware, after growing an online community of 20 million people.

The company's decision is complicated by the longstanding partnership and board relationships between Apple and Nike. Tim Cook, Apple's chief executive, has served on Nike's board since 2005, and in 2006, the two companies announced a partnership with the Nike+iPod product. The move follows Fitbit's recall of its million-selling Force product after complaints the wristband caused skin irritation. That, in turn, echoed Jawbone's 2011 recall of its fitness wristband, Up, due to faulty hardware.

However, Nike’s withdrawal marks the first serious test of whether technology, sports or fashion companies will dominate wearable devices. (c) 2014 The Financial Times Ltd