Adidas throws in the towel on wearables
German sports brand Adidas has closes its dedicated digital sports division, folding the 74 affected employees into “all areas” of its business. Work will continue on specific Adidas apps as well as Runtastic – the running app acquired by Adidas back in 2015.
If your immediate reaction to this is to scratch your head and say, “wait, Adidas made wearables?”, then that’s a pretty neat demonstration of why the company has abandoned the effort. The fitness wearables market is tough: the likes of Apple, Garmin, Polar, Fitbit, Samsung, Lenovo, Huawei and Xiaomi are all chasing the same small market at various price points, and wearables tend to last longer than smartphones sold on two-year contracts. The pool is small, and potentially shrinking.
In fact, it’s actually more accurate to say that Adidas made wearables – a new product hasn’t been seen since 2014 when it released the miCoach Fit Smart tracker, a follow up to the miCoach Smart Run from the previous year. There was even a weird smart football that we reviewed, back in the day. But for now, that’s it – other than a special Adidas edition of the Fitbit Ionic, which is still on the cards for next year.
The company confirmed in a statement that it was shifting “toward digital, sharpening our focus on digital experiences.” What that means is it’ll be looking to “consolidate the Adidas app ecosystem, focusing our efforts on two powerful brand platforms: Runtastic and the Adidas app.”
The good news is this means that there are no job losses, with employees simply moving to other divisions. The bad news is that it neatly demonstrates how tough it is to make a profit in wearables in 2017: even the biggest companies are struggling to grow in a saturated market, and having a big name and long heritage like Adidas doesn’t seem to make success any more likely. This likely won’t be the last company you see throwing in the towel in the next year or so – and not everyone has other divisions to soak up the damage.