Nike may have axed most of its FuelBand team, but that doesn't mean the fitness tracker is on death row, or at least that's what the company is saying. When news of the layoffs leaked, speculation arose that the company was pulling out of the hardware market and would focus instead on software for fitness trackers, including Apple's rumored iWatch.
Nike FuelBand may not be DOA
News surfaced late last week that Nike fired between 70 and 80 percent of its FuelBand hardware team, according to CNET. Nike confirmed there would be a "small number of layoffs," which doesn't exactly fit with the 80 percent figure unnamed sources tossed out.
That same report also said Nike saw its software offerings as the more important choice moving forward. Such a decision could be seen as a preemptive move to save face by getting out of the hardware side of the wearable fitness tech market before the competition heats up even more -- a move that doesn't seem very logical considering the FuelBand's popularity.
Backing up the notion that bailing on its fitness hardware doesn't make sense, a Nike spokesperson told Re/code,
The Nike+ FuelBand SE remains an important part of our business. 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.
The company didn't, however, elaborate on why some of its staff was fired. Insider sources said the decision was months in the making because of slim margins, high expenses, and production problems.
Assuming Nike is scaling back on its FuelBand products, it could be a calculated move to align itself closer with Apple and the company's unreleased wearable fitness offerings. Apple is likely well on the way to shipping some form of wearable fitness tracker considering the number of related hires it has made over the past couple years, and that could be a good fit for Nike's own software plans.
Apple CEO Tim Cook is also on Nike's board, which could be yet another indicator of the two company's planned alliance in the wearable tech market. A strong partnership now could give Nike exclusive software access to Apple's devices, or at least a head start over other developers.
Considering how competition in the already hot market is likely to increase, Nike may be looking ahead now for ways to give itself an advantage. An advantage that, for now, meant cutting jobs.