Apple and Nike, Running Mates
As corporate logos go, few are as recognizable as the bitten apple that appears on all things Apple Computer (AAPL). Few, that is, except maybe the swoosh that has appeared on Nike's (NKE) shoes and apparel from the company's beginning.
Now the two companies behind those logos are teaming up. At an event in New York, Nike and Apple said they are collaborating on a series of products that bridge the gaps between sports, electronics, and entertainment.
Their first jointly produced product: the Nike+iPod Sport kit, which involves an electronic sensor inserted under the inner sole of a new Nike running shoe dubbed the Moire (pronounce (MOR-ay). That sensor talks to a small wireless receiver that attaches to Apple's iPod nano music player.
SMARTER THAN SMART.
The components work together to give voice prompts, interjected while music is playing, that tell runners how far they've gone and at what pace. The iPod will also keep track of the duration, distance, and other information on each run. The data could then be uploaded to a Mac or PC, and from there to a Nike Web site called Nikeplus.com, where users can track progress, set goals, and share results. The shoes will sell for about $100. The sensor and iPod attachment will go for about $29 The Nike+iPod Sport Kit and are expected to be available in the next two months.
Nike dreamed up the idea for the product and contacted Apple to develop the technology behind it, Nike CEO Mark Parker said at the news conference: "A while back we asked a big question: Could we harness the power of digital technology to improve a runner's experience?" It turns out the answer is a smart running shoe, equipped with a small sensor that can track motion and distance and other metrics that runners find important, but the information would only be available after their run is complete, not while running. "We quickly realized that making a smart shoe wasn't smart enough."
So Parker called a friend: Apple CEO Steve Jobs. The result was the kit, which both called simply a "great start." The two companies will develop more products as part of an ongoing partnership.
The two companies are alike in design and marketing. Both are iconic brands that appeal to a consumer market that is young and considers itself hip and cool. Apple had approached Nike about being its MP3 supplier, but Nike execs came up with a bigger idea. Parker said he wanted to give more than just music to the runner. "Obviously, a lot of that was already happening," he says. "If the shoe and the iPod could talk to each other, what would they say and what's the potential of that connection? We got the creative side from both companies and we started exploring."
When Nike and Apple designers met for the first time 18 months ago, the teams clicked. "Both companies are technology-driven companies," Jobs says. "It's just that we work in completely different areas of technology. We are semiconductors and software, and Nike is anatomy and precision-molding and thin-film technologies. What's interesting is the people are very similar."
But it took some time for both teams to find their Zen state. Some of the technology challenges were tough. The sensor embedded in the new Nike Moire running sneaker was initially too big for Nike designers and too small for Apple's team. Other technical challenges centered on the duration of the battery power (close to 1,000 hours). Apple designers also had to wrestle with the wireless technology. "Wireless takes power," Jobs says. "The last thing you wanted was a wire going down your leg. It looks deceptively simple and that's how it should be. It took a while to get it right. But there is a lot of technology there."
Jobs also says keeping the price at $29 for the wireless iPod adapter was another key point. "This thing is over 90% accurate right out of the box, which is huge," Jobs says. "Something like this would normally cost a lot more money. We priced it so everyone can afford it because we want everyone to try it and experience how cool it is."
Parker says Nike is offering seven styles of shoes that will be iPod-ready by allowing the sensor to be embedded into the heel. They include the new Nike Air Zoom Moire, unveiled today, as well as the Nike Shox and Air Max lines. About 4 million "PlusReady" shoes are available now and next the number could balloon to 10 million, Parker says. "If you need stability or extra cushioning, we have shoes to fit those needs that will be wired," he says.
Both CEOs say the experience of developing NikePlus is just the beginning of a broader strategic relationship. Neither would describe what they intend to tackle next but hinted they are only limited by imagination and good business. "It's turned out to be really fun," Jobs says. "It's fun to apply technology in an area where A, it's never been done before, and B, everybody involved in it wants it for themselves. That's always a good sign. Everybody involved in this says, 'This is so cool,' It's great to work on things like this." Says Parker: "The connection between the two different products and the potential it creates is huge."
Apple and Nike aren't the first to try to crack the market for electronic gadgetry aimed at fitness enthusiasts. Nothing aside from the digital wristwatch has been all that universally successful, except digital-music players like the iPod and the Sony (SNE) Walkman before it. Nike has dallied in the digital-music realm before, having teamed up with Philips Electronics (PHG), and the now-defunct Rio before that, on MP3 players aimed at athletes.
Garmin (GRMN), the Kansas-based market leader in consumer GPS receivers, has been producing watches for runners that use the Global Positioning System to track a runner's training regimen. Its Forerunner products start at about $115 and, with certain options and features, can go as high as $377.
But to Trevor Edwards, Nike's vice-president for global brand management, the connection with Apple is obvious. "I think there are some ideas that you kind of go, 'Duh.' People are already out there running, and they run with music," Edwards says. "And some of them are trying to figure out how far they went. So we think this is already something people are doing. So you take their behavior and actually allow them to do it in a more simple way."