As more people turn to running as their pastime, companies try to exploit the trend. In our tech world, apparel and shoes are not enough for runners. They need wearable devices to know everything about their workout. That’s where companies like Under Armour Inc (NYSE:UA) and NIKE, Inc. (NYSE:NKE) are trying to squeeze more money from customers’ pockets.
What’s on the market?
Under Armour Inc (NYSE:UA) has recently issued its performance-monitoring system for athletes called Armour39. It tracks your heart rate, real-time intensity and even willpower. Willpower is calculated via a formula based upon the input the device gets from your body, and it is a marketing move rather than scientific breakout. The system consists of a module and chest wrap, which come in at $150. Your performance would be tracked with the help of a mobile app, which is currently compatible with iPhone 4S, iPhone 5, the fifth generation of iPod touch and iPad 4. The company plans to issue a display watch for those who do not want to run with their mobile phones.
Nike offers a wristband and a sport watch. The wristband is able to monitor time, calories burned, and your heart rate, if you buy Polar‘s Wearlink, a module to measure the heart rate. It is interesting to note that while Under Armour Inc (NYSE:UA) uses its own heart-rate module, Nike relies on the module provided by the market leader. The wristband costs a moderate $59, while the watch would cost you $150.
Polar produces sophisticated and pricey devices that target serious athletes. Its main competitor in this field is Garmin Ltd. (NASDAQ:GRMN). A top-level running watch with a heart-rate monitor from Garmin could easily cost $450. Polar devices reach the same price levels. Nike and Under Armour Inc (NYSE:UA) compete in a different league, targeting mass audience.
Who is the target?
It’s easy to notice that Under Armour Inc (NYSE:UA) steps in with a product that contains nothing new. The features of heart-rate monitoring and calorie burning were implemented in Polar and Garmin Ltd. (NASDAQ:GRMN) devices years ago. You don’t take the measurement of willpower seriously, do you? What it shows us is that the company believes there is an under-served market, and it could easily be reached.
It seems unwise from Garmin Ltd. (NASDAQ:GRMN), whose stock is down 13% this year, to ignore this opportunity. The number of people who need a lifestyle gadget is overwhelmingly bigger than the number of people who need to seriously track their workouts. Garmin has a running watch that falls into the cheap category, costing $130. The problem is, it looks utilitarian, while the competitors’ gadgets look fancy. The design of the gadget and the marketing fluff around it a more important for this market segment than the true features of the product.