On February 11th, Nike announced that it had ceased efforts to build an Android companion app for its FuelBand. With Google Play getting ever closer to Apple’s massive title library one company’s decision to ignore the platform surely isn’t a big deal – right?
As we move into the App Economy 3.0 – an era where less cutting edge consumers and a more mainstream market drives app usage – the importance of big brands (from Tesco to Nike to Gillette) will be imperative to making a platform a component of a user’s everyday life.
In fact, we will be exploring this in more in depth soon by evaluating top companies in various industries and their app strategies across platforms. For example, when American Airlines rebranded on January 23 it had new apps available on iOS and Android immediately. It has yet - as of 2/14 – updated its Windows Phone app and did not have an app available for the launch of BlackBerry 10.
But back to Nike. Nike has long been extending its brand beyond footwear and apparel – innovating with Apple on Nike + for iPod way back in 2006 – which allowed users to track their runs on their iPod/computer. Even before apps were mainstream apps were critical component in Nike’s transition.
Thus, Nike’s decision to jilt Android after explicitly stating last summer its plans to support the platform is troubling. While Nike hasn’t stated their reasons for abandoning its effort idle speculation should focus on one of three possibilities:
1. Android Fragmentation simply made it too difficult/expensive to support Android globally (a reason – according to our forthcoming developer survey – why other developers are abandoning the platform)
2. Android fragmentation makes it difficult to provide a consistently high quality experience across Android devices, and all but impossible for Nike to support every Android device. Nike then can’t use a nice, simple marketing message saying “we support Android” in the same way that they can say “we support iPhone”
3. Android users are not as into apps as iOS users and therefore the ROI for building an app simply wasn’t there
To further frame the issues we should note that Nike earned $6B in its last fiscal quarter. The company generated nearly $400M in net income. And despite the billions in earnings the company has decided for whatever reason not to support Android. It certainly was the result of not enough return on investment. The abandonment comes despite having 3 other Android apps, including Nike+Running which has been downloaded between 1-5M times. However, Nike has 11 iOS apps available.
As discussed in CES 2013: Apps Drive Billions in Revenue, Trillions in Value most companies that are building innovative new apps are focusing on iOS. Mattel, Lego, Nike, and others see the iOS ecosystem as a premium platform on which to reach the most engaged users. If this continues to be the perception than other platforms could be exiled to secondary status as Apple continues to improve its value proposition to end users and cement its role as a mobile leader.
Big brands are the future. Independent developers remain important but large brands will be the driving force behind the app market moving forward. Failure to win brand support will be a bigger blow to a platform than not having a million apps and if Nike is any indication of a trend those in the Android ecosystem should be worried.