According to a Friday report by CNET, Nike is preparing to pull the plug on its FuelBand product, firing the majority of its hardware team (as many as 55 people) this past week.
The company appears to be refocusing its efforts on apps, rather than physical hardware—it seems only a matter of time before such sensors are fully incorporated into future models of smartphones. The move may mark a turning point in the fitness band sector, as it appears to mark the first of the major companies to exit hardware manufacture.
"As a fast-paced, global business we continually align resources with business priorities," Nike spokesman Brian Strong told CNET. "As our Digital Sport priorities evolve, we expect to make changes within the team, and there will be a small number of layoffs. We do not comment on individual employment matters."
Rumors of the layoffs were first posted a week ago on the website Secret.
Still, the digital fitness world is rapidly growing in the near-term—according to the NPD Group it’s now worth over $330 million.
“The market is now large enough to accommodate a variety of products aimed at all levels of athlete—from serious performance-minded consumers to hobbyists—a sure sign of maturity,” Ben Arnold, executive director, industry analyst The NPD Group, said in a statement in January 2014.
Another analyst, Brian Blau of Gartner Research, told Ars that he stopped wearing his FuelBand "months ago."
"While it was good to see my activity I was able to estimate my levels without the need for the tracker, maybe its because of Fuelband's basic tracking capability, or that I just came to know my own body performance better," he said.
"As for the layoffs, I agree that not all devices will win out in the end, but for me the important take away is the focus on apps. We know that apps are the main interface (UI) for brands, so having a wearable device isn’t as important as having an app that provides that sophisticated functionality and presence that a brand is looking for."
