Nike's decision to ditch FuelBand is a course correction, not a category bail-out
Nike's decision to ditch FuelBand is a course correction, not a category bail-out
A view from Mel Exon

Nike's decision to ditch FuelBand is a course correction, not a category bail-out

Fans may mourn it, but Nike+ FuelBand was just a stage in wearable tech's innovation, writes Mel Exon, chief digital officer, BBH, and co-founder of BBH Labs.

The news in April that Nike may be discontinuing its wearable personal-fitness tracker, Nike+ FuelBand, met with a mixed reaction, spanning shock to schadenfreude. As more marketers consider offering utility and added-value services, it seems worth giving consideration to its rise and purported fall.

Launched at SXSW in 2012 amid much neon-lit fanfare, FuelBand felt like an inexorable, natural next step for Nike+. The nerdish joy of being an early adopter made the fact that mine needed to be replaced three times in the subsequent year easier to bear.

Taking a step back for a moment, I’m reminded of a phrase that comfortingly comes up occasionally when you’re a new parent: "Everything is just a phase… this too shall pass." Indeed, take a look at Gartner’s 2013 edition of its Hype Cycle for Emerging Technologies and, sure enough, wearable user interfaces are placed at that most infamous of positions, the Peak Of Inflated Expectations. This is where cracks start to appear before a technology descends into the Trough of Disillusionment.

So is this just a stage, or a sign of something else? Certainly in FuelBand’s case, its competitor Fitbit has simply had more traction and success, capturing 67% of the market in 2013, though not without a recent furore over a product recall.

The specific issues with wearables currently seem to centre on maintaining user engagement. To illustrate this, research by Endeavour Partners found that one-third of US consumers who owned a wearable product stopped using it within six months.

Strong technologies with decent long-term prospects haul themselves out of the trough and go on to be successful. It strikes me that for wearables to resolve the engagement issue and do the same in the months and years to come, two things need to happen:

1. Device consolidation

FuelBand’s minimal data collection and feedback loop already seem quaint. Nor does any smartwatch on the market offer a fully integrated solution. Instead, we should expect a single, beautifully designed, wearable device, capable of doing everything a smartphone already does and more – including capturing and reporting full body data – without draining battery life or weighing a ton. An Apple-led eco-system inevitably gets cited as the answer here, which does seem most likely when you add up the stories of a sophisticated Healthbook app and an iWatch on the near-horizon, together with patents granted for earbud and/or headphone sensors. Nike pulling back from a hardware battle it can’t win makes more sense when a partner like Apple looks set to move centre-stage.

2. Currency systems such as NikeFuel need to have real-world relevance and meaning.

This is most likely to be brought about by stronger connections to product, tangible goals and other services. Certainly, in Nike’s case, its commitment looks to be to the software, not the hardware. The launch of Fuel Labs in San Francisco, will, it claims, "continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving". Make no mistake: for Nike, stepping back from FuelBand represents a course correction, not a category bail-out.

The tech and activity industries as a whole will continue to run with wearables regardless. Witness the fact that Facebook is buying things again, with its purchase of the Moves activity app. The app doesn’t require another external device to work: it runs in the background, sensing motion and making assumptions about your activity and calories burned. And Google has recently announced Android Wear, an OS for wearable tech.

FuelBand and its detractors, we may come to realise, represent merely the baby steps down a long road for wearables.