May 23, 2006

Nike shoes talk to Apple’s iPod in new system

By Alexandria Sage and Martinne Geller

LOS ANGELES/NEW YORK (Reuters) - Nike Inc. said on Tuesday
that it is making running shoes that will be able to send data
about the wearer's performance to an Apple Computer Inc.'s iPod
using a new wireless system called Nike+iPod.

Shares of Nike rose over 2 percent as it capitalized on the
popularity of the iPod line, which dominates portable digital
music players. But one analyst said a relatively narrow section
of Nike consumers would be interested in the running products.

Using a Nike+iPod Sports Kit, expected to retail for about
$29, consumers will be able to access time, distance, pace and
calories burned through the earphones of a nano version of the
iPod via a sensor in the insole of special shoes that
communicate with the digital music player.

Nike also launched a line of performance clothing,
including jackets and shorts, that holds iPods and keeps wires
untangled and out of sight.

"We share the same types of consumers," said Trevor
Edwards, Nike's vice president of global brand management, who
said more than half of nano users already use the device while
running. "We know that these two brands work really well

A 2002 deal between Nike and the Netherlands' Philips
Electronics NV that resulted in an mp3 player that tracked time
and distance fizzled, Edwards said, because of differences in
the two companies' target consumers.


Analyst John Shanley of Susquehanna Financial Group said
the Nike+iPod launch was innovative but would not appeal to the
company's core base of teenage boys.

"Is it going to move the needle in terms of them selling
more footwear?" he asked. "Probably not."

But investors and sporting goods retailers were encouraged
by Nike adding to its performance apparel business, since sales
of that line have been outpaced by growing brand Under Armor

The Nike+ Air Zoom Moire line of running shoes -- priced at
$100 -- are the first to work with the system, but others will
follow, Nike's Edwards said.

The shoes and kit will be available in stores within two
months. Nike will sell the kits in its Niketown stores and
Apple will also include a Nike Sport Music section on its
iTunes music store, the companies said.

The Nike+iPod system will let runners call up a favorite
song instantly, and athletes can listen mid-workout to a voice
through their headphones detailing their progress.

Consumers can transfer collected data onto a Nike Web site,

The partnership was announced in New York during an event
attended by Apple Chief Executive Steve Jobs, Nike CEO Mark
Parker, Tour de France champion Lance Armstrong and marathon
record-holder Paula Radcliffe.

Shares of Nike rose $1.09, or 1.4 percent, to $79.07 on the
New York Stock Exchange. Apple shares fell 33 cents or less
than 1 percent to $63.05 on Nasdaq.