Nike could be making the right decision here.
Nike, the sportswear giant, is reportedly axing its wearable business. Word about Nike's sudden decision was first revealed on the nascent anonymous social network Secret.
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The post read: "The douchebag execs at Nike are going to lay off a bunch of the eng team who developed The FuelBand, and other Nike+ stuff. Mostly because the execs committed gross negligence, wasted tons of money, and didn't know what they were doing."
CNET was able to confirm the rumor today. In an email sent to CNET, Nike spokesman Brian Strong said that there are changes in Nike's Digital Sport division that will entail layoffs. Strong didn't disclose how many employees were fired.
Another source told CNET that as many as 55 people working on the hardware team were fired. However, Nike will continue to sell the FuelBand SE, at least for now.
"The Nike+ FuelBand SE (second edition) remains an important part of our business. We will continue to improve the Nike+ FuelBand App, launch new METALUXE colors, and we will sell and support the Nike+ FuelBand SE for the foreseeable future," Strong said in a follow-up statement.
Nike's FuelBand fitness tracker, which launched two years ago, struggled to compete against other popular wearables.
Last year, the NPD Group reported that Nike's FuelBand sales only accounted for 10 percent of the overall wearable sales. Fitbit accounted for 68 percent while Jawbone took 19 percent. The competition gets tougher this year as Google joins the race. Apple is also rumored to be working on its own "iWatch" fitness tracker.
Given the case, Nike's decision to exit the wearables market is reasonable.