Nike Offers Athletes High-Tech Gear
Wednesday, May 10th 2000, 12:00 am
By: News On 6
BEAVERTON, Ore. (AP) â€” Nike Inc. wants to connect with the wired athlete.
The athletic shoe and apparel company said Wednesday it is diversifying into high-tech sports gear to offer devices like digital audio players, speed and distance monitors and walkie-talkies.
``Today's athletes are looking for something extra to enhance the connection between themselves and the athletic experience. They want more information,'' said Clare Hamill, vice president of Nike Equipment. ``These are performance products for athletes in the emerging digital age.''
The first and most expensive of five new products is a digital audio player that will be in retail stores in July and was produced in collaboration with S3's Diamond Multimedia division â€” the makers of Rio Audio digital players. It has 64 megabytes of memory and will retail for $299.
Nike said four other products from the Nike Techlab division would be in stores in the fall for the holiday season, including real-time speed-distance and heart rate monitoring devices, a digital compass and handheld walkie-talkies aimed for use by snowboarders, hikers and campers.
Equipment has always been a small part of Nike's business, so the move in this direction is not new. Still, of its $9.5 billion in sales last year, more than $9 billion came from shoes and apparel, said Carol Pope Murray, who follows Nike for Salomon Smith Barney in New York.
Analysts said Nike has been trying to expand its equipment business for some time â€” with basketballs and baseball bats and more successfully with the Triax ergonomic running watch, of which 2.5 million have been sold since late 1997.
``This is a fabulous brand and it makes sense to extend it into some other categories. You have to do it carefully and prudently, which is typically how Nike executes new businesses,'' Murray said. ``The hard thing to gauge is that electronics are an incredibly competitive market on price.''
Nike has been in a slump for the last two years as it endured weak sales and a shakeout among retail outlets, though its earnings are improving. Third-quarter earnings for the period ending Feb. 29 rose 17 percent as the company earned $145.3 million, or 52 cents a share, compared to $124.2 million, or 44 cents per share, in the period a year earlier.
Michael Shea, an analyst with D.A. Davidson in Portland, said he thought some of the devices were an odd fit for a company founded to cater to runners.
``When I think of a compass, I think of camping. With a heart monitor, I think of medical technology company,'' he said.
But Nike executives said the products make perfect sense for their active customers.
The audio player will have a remote in case the user wants to put it in a pocket or backpack, the walkie talkie will transmit weather alerts and the heart monitor will eventually be designed into women's sports bras, said Ray Riley, creative director of Nike Techlab.
On the Net: http://www.nike.com