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Nike and Apple tell runners: “It’s worth it”

May 23, 2006

By Alexandria Sage and Martinne Geller

LOS ANGELES/NEW YORK (Reuters) – Is all this exercise
really helping me?

Nike Inc. said on Tuesday it is making running shoes that
will tell the wearer how far and how fast he or she has run and
how many calories they have burned.

The instant information will come from a miniature Apple
Computer Inc. iPod and a new wireless system called Nike+iPod.

Nike shares rose over 2 percent following the announcement
of its plan to capitalize on the popularity of iPod portable
digital music players with runners, 75 percent of whom already
listen to music while they exercise.

Using a Nike+iPod Sports Kit, expected to sell for about
$29, miniature versions of the iPod will be able to give audio
data on time, distance, pace and calories burned on-demand
through an attachable receiver that gets data from a sensor in
the insole of special Nike shoes.

The new Air Zoom Moire line of running shoes — priced at
$100 — are the first to have space for the sensor, but others
will follow, Nike said. The removable sensor, about the size of
a piece of bubble gum, can be used with any compatible shoe.

In 2004 archrival Adidas-Salomon AG launched a so-called
“smart shoe,” embedded with a computer chip and a motor that
constantly adjusts the shoe’s cushioning to suit the runner’s
needs.

But Nike Chief Executive Mark Parker said such a “smart
shoe,” would not, by itself, be able to access relevant data
until after the run was done and the shoes had been removed.

“We realized making a smart shoe wasn’t really smart
enough,” Parker said at a New York launch event attended by
Apple CEO Steve Jobs, Tour de France champion Lance Armstrong
and marathon record-holder Paula Radcliffe.

Nike, the world’s biggest maker of sports shoes and
apparel, also launched a line of performance clothing,
including jackets, shirts and shorts, that holds iPods and
keeps wires untangled and out of sight.

“We share the same types of consumers (with Apple),” said
Trevor Edwards, Nike’s vice president of global brand
management. “We know that these two brands work really well
together.”

A 2002 deal between Nike and the Netherlands’ Philips
Electronics NV that resulted in a portable digital music player
that tracked time and distance fizzled, Edwards said, because
of differences in the two companies’ target consumers.

Apple came to Nike after it separated from Philips, CEO
Parker said after the event.

“We both had a mutual interest in pursuing (an) opportunity
in this area,” Parker told Reuters. “Not for Nike to get into
the mp3 market per se, but for Nike to establish an opportunity
with somebody who is really leading in that area.”

Apple, which has shipped over 50 million iPods, controls 77
percent of the U.S. market for portable digital music players,
according to market research firm NPD Group.

SELLING MORE FOOTWEAR?

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
Inc..

The connector kit will be available in both Nike and Apple
stores within two months, the companies said, adding that Nike
will also sell nano iPods, but Apple will not sell Nike shoes.

Apple will also include a Nike Sport Music section on its
iTunes music store, which will feature playlists of well-known
athletes such as Armstrong, the companies said.

The Nike+iPod system will let runners call up a favorite
song instantly and then instantly upload their workout
information to a Nike Web site, www.nikeplus.com, where they
can share the information with their friends.

Nike shares closed up $1.01, or 1.3 percent, at $78.99 on
the New York Stock Exchange. Apple shares fell 23 cents or less
than 1 percent to $63.15 on Nasdaq.


Source: reuters



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