Adidas Brainy Boots Offer Messi Secret in Nike Challenge: Retail
After two years in development, the world’s second-largest sporting-goods maker will release soccer shoes that allow the wearer to compare speed and movement with stars including Messi, the Barcelona forward twice named FIFA World Player of the Year. The shoe, which uses an embedded chip to record and analyze a player’s performance, goes on sale in Europe, Asia and Latin America on Nov. 15, and hits U.S. stores on Dec. 1.
“We’re able to show you what you did, give you the key metrics of your game and enable you to compare this to your previous performances, the performance of your friends, competitors or our global stars,” said Ryan Mitchell, head of the go-to-market team in Adidas’s interactive business unit.
The product, worn by Messi in Argentina’s Sept. 6 exhibition game against Nigeria, was developed by Adidas to help fend off larger rival Nike Inc. (NKE) and extend its leadership in soccer. Nike has sought to surpass Herzogenaurach, Germany-based Adidas as the sport’s biggest brand by sponsoring teams including Barcelona and players such as Real Madrid’s Cristiano Ronaldo. Adidas controls about a third of a market it estimates is worth as much as 5 billion euros a year.
“Adidas has a heritage in football that Nike doesn’t have and its innovations should bring more growth,” said Joerg Frey, an analyst at M.M. Warburg in Hamburg. “It’s good timing for Adidas with the European championship coming up.”
Nike shares have risen twice as much as Adidas’s since Spain won the last European final in 2008, gaining 53 percent to 24 percent for the German company. Nike didn’t start ramping up its soccer business until the mid 1990s, while Adidas has been selling soccer shoes since the 1920s.
Adidas forecasts revenue from soccer next year will exceed 2010’s record 1.5 billion euros, boosted by the European finals, starting in Poland and Ukraine in June. Mark Josefson, an analyst at Silvia Quandt Research GmbH, estimates sales may rise as much as 15 percent to 1.6 billion euros in the category, which accounts for more than 17 percent of group revenue.
“We definitely believe we will extend our lead in 2012,” Chief Executive Officer Herbert Hainer said of Adidas’s soccer market share on a Nov. 3 conference call.
Nike, whose Mercurial Vapor soccer shoe is worn by Ronaldo, is seeing “great results” with soccer products, spokeswoman Mary Remuzzi said by e-mail. She declined to give the Beaverton, Oregon-based company’s market share in the category.
Adidas’s new shoe is a version of the f50 adizero, which was introduced in 2010 and is the lightest product on the market at 165 grams. It carries an eight-gram chip inserted beneath the sole that transmits data on maximum speed, distance covered or number of sprints to a computer or mobile device.
“We wanted to get to a point where your boot is talking to your computer or smartphone,” said Mitchell, a former Olympic medal-winning swimmer. “It needed to happen wirelessly.”
The product uses an adapted version of Adidas’s miCoach technology, which has been developed by the German company since 2006 for monitoring running performance. Measuring movement in soccer isn’t as easy because players move in more than one direction, Mitchell said.
The chip, known as a speed cell, “is able to measure speed and distance in all 360-degree movements,” he said. “It can measure the acceleration of your foot and can recreate the distance in every direction, not only going forwards.”
After downloading the data, users can compare the results with their past performances or those of other players to help formulate a training program, Mitchell said.
A package that includes the shoes, a speed chip and related software will sell for 245 euros. Conventional models of the f50 adizero cost 139.95 euros to 349.95 on Adidas’s German website.
“The product will be a bit expensive for young people who don’t play in local leagues and rely on their parents to buy the boots,” said Thomas Effler, an analyst at WestLB AG in Frankfurt. “However, parents are more willing to pay extra for clothing and shoes than for expensive electronic items so I expect less price sensitivity. There’s a big brand awareness among kids today and parents often pay for it.”
Anyone with a sporting lifestyle is a potential customer, spokeswoman Katja Schreiber said. For all brands, Adidas targets its communication efforts at 14- to 19-year-olds, she said.
“It’s expensive for teenagers,” said Christoph Schlienkamp, an analyst at Bankhaus Lampe in Dusseldorf, in a phone interview. “Everything above 100 euros for football boots is expensive for normal football players. Adidas wants to show young people that the brand is innovative.”
The German company plans to start selling similar products for basketball, tennis and American football in the first half of next year, Mitchell said.
Adidas commercialized the “lightest shoe in basketball” in October this year. The adizero Rose 2 shoes, which are priced at $110, are worn by NBA Most Valuable Player Derrick Rose.
“Adidas is becoming increasingly successful on the basketball market,” said Sebastian Frericks, an analyst at Bankhaus Metzler in Frankfurt. “Sports like tennis or American football are more of an opportunity to exploit on a lower scale, but it’s not as strategic as football or basketball.”
Nike, the world’s largest sporting-goods provider, will replace Adidas’s Reebok unit as the maker of National Football League-branded apparel and uniforms from next year in a bid to drive sales growth in its largest market. Reebok, which was acquired by Adidas in 2006, held the license since 2001.
Still, the potential growth of soccer sales, backed by the launch of the miCoach f50 adizero, may help fill the breach. Adidas said this month it expects earnings per share to increase 10 percent to 15 percent next year.
“Adidas is already the market leader for soccer, but the launch of the boots will fortify its franchise,” Frericks said. “It won’t change the game, but it’s important to bring innovation.”
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