Sports apparel nowadays is not just about keeping pace with the latest technology in running shoes or sweat-resistant active clothing; it is also about software and wearables that one can use to track fitness or other biometrics. Under Armour, which is now one of the top three sports apparel companies in the world along with Nike and Adidas, recently tied up with HTC, for a co-developed fitness tracker device called HTC Grip. Under Armour has also spent more than $550 million to buy two fitness app companies, Edmondo and MyFitnessPal. With these acquisitions, Under Armour now serves 130 million users on its fitness platform. Nike has its own digital fitness tracking platform, Nike+, available through a mobile app, fitness tracker, and sports watch, and is best known for its partnership with Apple for the iPhone and the iPod. At the end of 2013, Nike+ had around 18 million users.
Adidas has its miCoach fitness platform that also includes mobile apps and wearable devices, however the company has been lagging behind its rivals Nike and Under Armour. While it’s not clear how many active users are on the miCoach platform, last year Adidas fell behind Under Armour in terms of U.S. market share. Adidas has now acquired fitness tracking company Runtastic for €220 million to bolster its competitiveness in fitness tracking, but also to add to its wearable device portfolio. With the Runtastic acquisition, Adidas has acquired 70 million active users, which should make it the second biggest fitness tracking platform behind Under Armour. Runtastic also sells its own wearable devices including fitness trackers, heart rate straps, and smart watches, all of which feed activity and fitness data into the Runtastic platform.
Adidas could co-brand Runtastic, or bring it under the miCoach fitness platform. Most likely, Adidas will keep the Runtastic brand alive, to retain the loyal user base, but will integrate and cross-sell devices between miCoach and Runtastic. Adidas has announced that it will retain the employees in Runtastic who will continue to work from their offices in Austria and San Francisco. Just like Under Armour now provides a family of apps for its users under the Under Armour Connected Fitness platform, Adidas is likely to do the same. Eventually, existing Runtastic users should be able to use their apps with the miCoach family of devices and vice versa. According to a blog post from the Runtastic CEO, there is likely to be a new app announced at the end of the year that will be jointly developed with Adidas. I won’t be surprised if there are new devices that are co-developed by Runtastic and Adidas.
Adidas also sells smart clothing that feeds data into the miCoach platform. Adidas sells its smart clothing through Numetrex, which is part of Textronix, which Adidas acquired back in 2008. With the Runtastic acquisition, it’s likely that eventually smart clothing from Adidas will also sync with Runtastic apps. This should allow existing Runtastic users to use smart clothing from Adidas. While smart clothing isn’t a top priority today, as the focus is mostly on consolidating the fitness tracking user base and improving the user experience, in the long run having an engaged user base, combined with a diverse set of wearables including trackers, smart watches, and smart clothing should help Adidas compete effectively in this market.