UA, NKE, AdiBok – "If Everything is Smart, Then Nothing Is"
Connected fitness is all the buzz at the CES conference. Every connected fitness device unveiled its new 2016 hardware, the announcement of the UA HealthBox /‘Smart Shoe’, the release of a NKE Smart Shoe patent drawing, and the New Balance Digital Sport division = a lot of buzz. What’s clear is that the brands have moved completely away from the hardware side of the business after each tried some iteration of a device. UA partnered with HTC, NKE is still working with Apple.
This has been a long time coming for UA who started consolidating the connected fitness app market when it bought MapMyFitness in Dec. of 2013. Adi has scooped up its own device maker by the name of Runtastic. The bottom line here is will it help the companies sell more shoes and t-shirts. By getting a better sense of customer’s fitness and diet routines/habits it can’t hurt when it comes to the product creation/marketing side of the business. But, the most important element is still product. It still remains to be seen if the $710mm UA invested in its suite of fitness products will translate to the topline.
In reality, if all the brands are launching 'me too' third party hardware with partially branded software product, one has to wonder if these are 'Smart' products at all. Seems to us like what was once Smart is now being dumbed down to 'Average Intelligence'. Nobody has a competitive advantage when the same innovations become the norm. The Brands will argue that there are indeed competitive advantages to their respective product. But we'd bet that 8 out of 10 consumers can't tell the difference from one to the other.
Sounds to us like someone has to materially up the ante chip in Connected Fitness in a way to stimulate a new multi-year growth spurt in the category. Our money is on Apple, which will disproportionately help Nike.
NKE - Smart Shoe: (http://www.kicksonfire.com/nike-made-patent-to-create-first-smart-shoe/)
UA - Under Armour HealthBox: (http://footwearnews.com/2016/focus/athletic-outdoor/under-armour-smart-shoe-healthbox-fitness-180945/)
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