Late last week Nike announced plans to shut down its Fuelband hardware division, starting immediately by laying off around 50 of its employees working on the project. Instead of supporting the Fuelband hardware, Nike will focus on the software it develops to help individuals track their fitness and activity levels.
This is an understandable move by Nike, especially with the rapid rise in companies and hardware devices that have entered the wearables market over the past 12 months. Nike can now instead focus on its best offerings, and their activity tracking software is undeniably one of the best out there (although one of my biggest issues with Nike apps is that most are mutually exclusive, not allowing you to import/export data between Nike apps). Nike will be fine. Besides their individual apps being successful, their strong partnership with Apple will surely grow. In fact, there is some speculation that the Apple partnership and the possible release of an Apple hardware device (iWatch, for example) forced Nike to dump their possible competing device to appease Apple. Again, speculation, but interesting nevertheless.
So with so many players in the wearables space, and a few of those specializing in the health and fitness vertical, who can gain market share by Nike shutting down Fuelband? I believe the best candidate could be Samsung. First, the disclaimer: I am in fact a devoted Samsung fan. I own a Galaxy Note 3 and Galaxy Gear (first generation). My future purchase plans include Samsung devices (TV, next smartphone, tablet, and possibly a home monitoring setup with all Samsung products). I am getting fully in bed with Samsung and their eco-system. That said, there are some undeniable facts separate from my personal use that prove Samsung has a chance to capitalize on Nike's hardware shutdown.
Samsung has hardware figured out
Samsung devices are solid - both in design and hardware components. The S-series of smartphones are durable (I don't own an S5 but got to experience one hands-on and the reviews have confirmed my thoughts that it is a great design), as is the Gear smartwatch. Samsung products don't feel cheap to the touch, where as some products like the Pebble and Jawbone UP have had design issues, comfortableness issues, and broken parts after moderate use.
Samsung has made strides in innovation
From development of products all over the home and personal technology devices, Samsung has made huge strides in innovation. From screen sizes to software, Samsung has built an eco-system that they can continue to grow, as long as they keep the products related enough to connect with each other. Samsung also innovates very quickly. The S-series of phones consistently comes out with a new generation every year, and the newer models are more than just a few tweaks from the previous generation. The first generation of the Gear came out in Fall of 2013. Second generation Gear devices (three of them total) have hit the market six months later. The tablet line has been a strong seller for Samsung as well. And I am not even mentioning all of the other household appliances that Samsung develops. Samsung moves fast, usually outpacing rivals like Apple and HTC.
Samsung has huge potential in "S Health" software
If we look at just the health and fitness space Nike's Fuelband is exiting, Samsung has S Health - which is their play on health and activity tracking applications that run on Samsung devices. In my opinion S Health still has a long way to go, but you can tell Samsung is invested in the long-term given its implementation in all of the recent devices (Note series, latest S5 smartphone, and the new Gear Fit have strong S Health integration). And S Health doesn't require you have a Samsung device. The app can read select other wearables to get health data into its platform. But if you take S Health and consider all of the Samsung products it could be integrated into, like the TV and refrigerator, for example, there are no limits to the possibilities.
While I understand that a lot of the Fuelband fans will not look to Samsung to fill their wearable need, I think there are some strong arguments why Samsung's combination of strong hardware, S Health, and integrations across multiple other Samsung products (both in the home and personal tech) could bring some serious punch to the health management space.