Just Fuel It? Nike Fans Get Exercised Over FuelBands

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NIKENike (NKE) has been known to draw a crowd when a new line of basketball shoes hits stores, but now the athletic footwear and apparel giant is turning heads with a high-tech wristband.

Nike+ FuelBand won't hit the market for several more weeks, but the sultan of swoosh already knows it has a hit. The $149 cutting-edge bracelets sold out quickly during two short-lived online buying opportunities over the weekend, and those pre-orders won't be delivered until Feb. 22.

Consumers fearing that the scarce FuelBands will be in short supply next month have taken to eBay where several units are selling for more than double their retail value. This isn't some phantom figure of what greedy sellers are hoping to get and never do. Yes, there have been several completed transactions on the auction site north of $300.

What is the Nike+ FuelBand? What will it mean for Nike as a business and for you as a consumer? Allow me to take you by the wrist -- the way that Nike wants to later this year -- to unravel the FuelBand technology.

These Are No Silly Bandz

Fashion trends for wristbands in recent years have typically steered toward the cheap and colorful. There's the charitable allure of Livestrong rubber bracelets. There's the comic charm of the oddly shaped Silly Bandz for kids.

Designer wristwatches are surprisingly popular these days. Just check out the heady growth lately at Fossil (FOSL) with its proprietary and licensed timepieces.

NIKE fuel bands

However, folks must be expecting a lot out of Nike's $149 FuelBand if they're selling out quickly and being bid up in the aftermarket.

In a nutshell, Nike+ FuelBand is a mobile health wrist-hugger that tracks any and all forms of physical activity. From walking to the kitchen to going for a morning jog to hitting the dance floor, Nike's bracelet features a three-axis accelerometer that accurately scores your every move.

The stylish yet simple black bands feature an LED screen that measures time, calories burned, steps taken, and NikeFuel.

NikeFuel? Oh, right. NikeFuel.

Fill 'Er Up

NikeFuel is a proprietary metric which the footwear giant is calling "the ultimate measure of activity" – it boils down a day's physical activity to a four-digit score.

What's in a number? Well, Nike is hoping that FuelBand wearers will go about setting daily NikeFuel goals. This won't be merely a number on the wrist. The Nike+ FuelBand connects wirelessly to Apple (AAPL) iPhones, sharing data for a more intensive breakdown of your day's performance. (Nike and Apple have been partnering up for mobile since the Nike+ technology was launched in cahoots with the iPod, though it's hard to imagine Nike ignoring rival smartphone platforms in the future.)

Nike isn't the first company to embrace mobile health. FitBit wireless trainers and the Jawbone UP band are already on the market. They're also cheaper than the FuelBand. However, the Nike brand, its global appeal, and access to celebrity athlete endorsers will make FuelBand a hot gadget this year.

Money sweats
Altruistically, Nike wants a healthier you. If you begin monitoring your daily NikeFuel score, turning the monitoring of your physical activity into sport should encourage you to be more active.

Obviously Nike stands to benefit here, and not just through the one-time sales of these slick wristbands. A more active lifestyle will find you going through more Nike sneakers, shirts, and shorts.

The sweat-trickle-down theory won't stop at Nike. Investors can already begin to smoke out the winners if Nike's wristband turns the world into more active exercisers:
  • Under Armour (UA) will sell more of its sweat-resistant clothing.
  • Upscale yoga mom magnet lululemon atheltica (LULU) will go through more athletic apparel.
  • Cloud-based event organizer Active Network (ACTV) will register more people for local 5K runs and related athletic endurance events.
Even rival footwear makers will get in on the fun, even if it's a fashionable contrast to the LED swoosh on the FuelBand.
Nike has a real shot to get consumers to avoid cutting corners when it comes to physical activity. Now it just needs to make sure that it can crank out enough of these bracelets to meet demand.

I was lucky enough to get in on the second pre-order event this past weekend, and I'm certainly not going to flip my FuelBand on eBay. That wouldn't do much to elevate my NikeFuel score.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Apple, lululemon athletica, and Under Armour. Motley Fool newsletter services have recommended buying shares of Under Armour, Nike, The Active Network, Apple, and lululemon athletica. Motley Fool newsletter services have also recommended creating a diagonal call position in Nike and a bull call spread position in Apple.



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13 Comments

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akn

The cool thing about the Nike FuelBand is that its a competition between you and you friends (if they have the band) to see who can get the most NikeFuel points. Also, its not telling you when you can stop exercising, its telling you how much you have exercised and it tries to motivate you to do more.

February 19 2012 at 12:32 PM Report abuse rate up rate down Reply
midamerfrn

A fuel and his money are soon parted?

January 30 2012 at 10:01 AM Report abuse rate up rate down Reply
BobGutierrezNY

Why add another item to carry around on your person, no matter how cool its introduction - especially for people who don't like wearing anything on their wrists other than their wristwatch?
I only carry around my iPhone - to which I've recently added the app that made a sensation at the recent CES 2012.
It's Walktastic/ Runtastic GPS running/walking tracker for fitness - which gives me the following benefits:
>"Track exercises via GPS: automatically records time, distance, calory consumption, speed elevation and more
>View your current position and route on a map
>Training Diary: history of your exercises
>'Sexy' (Note: all this from advertised app's description) voice feedback in various languages
>iPod integration: listen to your favorite music during training
>Competitions: challenge your friends (see "Sharing" below) and let the voice feedback tell you if you are the leader
ATTENTION: highly addictive.
>Sharing: Publish your activities on Facebook, Twitter and on the Runtastic sports portal.
>Indoor sports: manual data input offers the possibility to keep track of your exercises such as gym training,
treadmill or yoga."(Note: all this from advertised app's description)
I have the option to save or not save each walk's, run's, activities' stats, history, etc.-including the path I walked, ran, etc., tracked via GPS. Again, the app's name is: Walktastic/ Runtastic PRO GPS running/walking tracker for fitness.
[Caveat: I am NOT a paid endorser - just a happy user. The app only set me back $5.99 - very much worth it IMHO]
Bob
Robert J. Gutierrez
Sr. Consultant
AMBIT ENERGY [#1 on INC500 2010 - ]
www.inc.com/magazine/20100901/meet-americas-fastest-growing-company.html
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January 30 2012 at 7:09 AM Report abuse rate up rate down Reply
Richard Goebel

Are these things made with child slave labor like their other products?

January 27 2012 at 8:49 AM Report abuse +1 rate up rate down Reply
dice6060

The same crowd who rioted to get the retro Jordans will be busting down the doors to spend their welfare checks on this junk.

January 27 2012 at 6:34 AM Report abuse +4 rate up rate down Reply
HonknDodge

Please, give me a break. I wouldn't give a plug nickel for one of those silly things.

January 27 2012 at 5:28 AM Report abuse +1 rate up rate down Reply
falconsso

The profits go to ObamaGate. Got your Nike on, and your kool aid down ?

January 26 2012 at 11:40 PM Report abuse rate up rate down Reply
falconsso

Just another gimmick to restrain you from using good situational awareness. Dont step out in traffic wearing this.

January 26 2012 at 11:39 PM Report abuse rate up rate down Reply
bigcatdaddy

It seems pretty retarded to me.

January 26 2012 at 6:53 PM Report abuse rate up rate down Reply
jokinok1

Why anyone in their right mind would pay more than $10.00 for a pair of stupid looking tennis shoes is beyond me. And you certainly don't need a $149.00 wrist band to tell you when you have exercised enough.

January 26 2012 at 12:16 PM Report abuse +2 rate up rate down Reply
1 reply to jokinok1's comment
edv1125

maybe if you did more exercise than just walking around walmart to find your $10 sneakers you would know the benefit of paying more.

January 26 2012 at 4:23 PM Report abuse -2 rate up rate down Reply