The Nike FuelBand II is a wearable device that monitors vital signs like heart rate and sleep quality through sensors. It provides real-time feedback on athletic performance and integrates with a personal analytics dashboard and social media. Nike aims to position itself as a wellness company and estimates the device will reach profitability in year 6 with $38.6 million in profits. The global wearable device market is projected to grow significantly with shipments reaching over 300 million units by 2020, representing a $12 billion industry. The FuelBand II targets recreational athletes and corporate wellness programs.

1. Nike FuelBand II
with SmartFit™
ANAND GAUTAM

2. What it is?
Nike FuelBand II with SmartFit™ is a wearable device that:

Monitors heart rate, breathing rate, quality of sleep and even stress
(applying machine learning to heart rate variability) all in one
device

Gives real-time feedback on athletic performance such as
lengthening your stride or speeding up

Personal analytics dashboard to easily monitor activities on a
weekly/monthly basis and integration with social media to get
encouragement from peers

Ability to transfer data to third-party ecosystem and allow
integration with health insurance exchanges and doctor’s office

3. Product Objectives & Revenue
Estimates

To develop & launch a new wearable fitness device with state-ofthe-art sensors with a SmartFit™ athletic wear accessory, and a
personal analytics dashboard

To position Nike as a well-being/healthy lifestyle company rather
than a retailer and manufacturer of athletic gear and apparel

Will reach profitability by year 6 with $38.6 millions in profit

4. Market Growth & Segments
Market Growth

Global wearable devices unit shipments will cross 100 million
milestone in 2014, and 300 million units five years from now

Global wearable device market will be a $12 billion market by 2018
Core Market Segments

Recreational Fitness consumers (20 percent of US population)

Corporate wellness programs (Top 1/3 of Fortune-500 companies
employees)

5. Customer Profile

Recreational Fitness consumers
•
In a Bloomberg survey, have shown interest in sensor-enabled wristwear
(33%) and medical devices that transmit data (38%)
•
Want real-time feedback on athletic performance
•
Want integration with social media to get encouragement or motivation

Corporate wellness programs
•
Want to monitor worker’s stress levels to improve well-being as well as worker
productivity and collaboration
•
Desire analytics so employees can be better informed and make
adjustments to their behavior and/or work style
•
Want to improve employee satisfaction and retention while reducing
healthcare costs

6. Competitor Analysis







Strengths
Longer battery life with a time display in a
bracelet form-factor
Can monitor mental-wellbeing such as stress
and quality of sleep
Act as a coach by giving real-time audio tips
and help improve athletic performance
Personal analytics dashboard which provides
weekly/monthly summaries of activity
Weaknesses



Opportunities
Large, untapped market with no clearly

identified leader
Clearly identified market segments

Opportunity to educate consumers and gain a
first mover advantage

Higher price point
New Product so greater likelihood of bugs
If vital signs are monitored incorrectly, might be liable
for lawsuits as the product is practically a health
device
Threats
Lot of uncertainty in the market size estimates and
adoption rate of wearable devices
Copycat products can be launched within a short
timeframe albeit without accessory services such as
analytics dashboard
Backlash because of privacy issues

7. Core Product Strategy

Value Proposition - For recreational fitness consumers and corporate wellness
clients, FuelBand™ II with SmartFit™ is a wearable device that unlike Fitbit or
Jawbone, provides monitoring of major vital signs all in one device, real-time
fitness coaching, and aggregate analytics to monitor weekly/monthly health
trends that can be easily transmitted wirelessly to loved ones or to the doctor

Product Positioning - Nike’s FuelBand II with SmartFit™ athletic wear integrates
monitoring of major vital signs in one device with real-time feedback and
analytics to improve performance on the go and reach the well-being you want

Quality-Based Differentiation – Nike FuelBand™ II will be differentiated from the
competition as we have a “whole product” solution

8. Financial Summary
Income
Statement
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Revenue
0
0
$750,000,000
$1,500,000,000
$3,000,000,000
$3,900,000,000
Cost of Goods
Sold
0
0
$375,000,000
$750,000,000
$1,500,000,000
$1,950,000,000
Gross Profit
0
0
$375,000,000
$750,000,000
$1,500,000,000
$1,950,000,000
$150,000,000
$150,000,000
$60,000,000
$120,000,000
$240,000,000
$390,000,000
$25,000,000
$75,000,000
$225,000,000
$375,000,000
$750,000,000
$1,170,000,000
($175,000,000)
($225,000,000)
$90,000,000
$255,000,000
$510,000,000
$390,000,000
0
0
22,500,000
63,750,000
127,500,000
97,500,000
Net Income
($175,000,000)
($225,000,000)
$67,500,000
$191,250,000
$382,500,000
$292,500,000
Net Present
Value
($175,000,000)
($180,000,000)
$43,200,000
$97,920,000
$156,672,000
$95,846,400
R&D Expenses
MSG&A
Expenses
Operating
Profit
Taxes