Why Under Armours CEO Believes They Are a Tech Company

March 31, 2017 • Blog Post • BY QUARTZ CREATIVE

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IN THIS ARTICLE

  • Learn how Under Armour embraced the value of IoT to become a pioneer in fitness tech

With app acquisitions and IoT investments, the apparel company is pivoting into the tech industry

In late 2013, Under Armour acquired MapMyFitness, a health and fitness interface with 20 million users. It seemed peculiar for the Baltimore-based companywhich grew out of the success of their skin-tight base layersto spend $150 million on a roster of websites and apps. Then in 2015, they struck again, shelling out $560 million for the diet and exercise app MyFitnessPal and the social fitness app Endomondo. Welcome to Under Armour, the tech company.

Fast forward to the spring of 2016 when Under Armour released HealthBox, a comprehensive fitness tracker that has everything: Step tracker, sleep tracker, heart rate monitor and scale, all of which are tethered via Wi-Fi and Bluetooth. You can upload your runs in MapMyRun (part of the MapMyFitness acquisition) and enter your entire diet through MyFitnessPal. This service allows consumers to have a holistic snapshot of their bodies, from nutrition to weight to fitness. And it's all routed and stored through Under Armour's smartphone app UA Record.

Now, as the competition tries to catch up, Under Armouron the backs of savvy contracts with American superstars Steph Curry and Jordan Spiethis poised to lead the fitness sphere in the Internet of Things (IoT).

Fitness is the first true use case of IoT, and IoTs success depends in part on the success of companies like Fitbit and Under Armour, Ben Parr, an entrepreneur and author of Captivology: The Science of Capturing Peoples Attention, says. While the Internet of Things is growing into things like home automation and garbage cans that alert cities when they're full, health will be the primary use case for years to come.

Trackingfor us regular people and the pros

MyFitnessPal is the undisputed juggernaut in the world of nutrition tracking. Coupled with the UA Record app, it gives users a powerful tool to better understand not just their diet, but their overall health. Look closer and you can see how the Internet of Thingsand the specific data from each individual consumercould have a tremendous impact on policy and public health. Its not just about step trackers and heart rate; the more specialized health data captured by these devices could potentially influence how larger decisions are made.

Today we are focused on individuals, but the benefit of all of this data in aggregate could be huge if we apply it to public health, says Stacey Higginbotham, editor of the Internet of Things Podcast. You can use the aggregate data to spot trends and look at how work environments or living environments correlate to health.

But it has more uses beyond public health. The data that the average person puts into health and fitness apps can also be useful to people who play sports for a living. Todays professional athletes are more intensely focused on health, nutrition and recovery than ever before. The sports data revolution has spawned a cottage industry of supplements and specialists who focus on sports science. Not to mention fitness tracking, which doesnt just mean counting how many steps you take from your desk to the water cooler each day. Some fitness tracking technology is so sophisticated that it can track players physical movements on the court or field.

Fitness tracking data is actually relatively small, but when you think about applying it to a professional sports team or even looking at information about how a team is playing on the field, you can get into using video, which generates a huge amount of raw data, Higginbotham says. Being able to analyze how a player interacts with others or against others has a lot of utility and in the NBA, teams are already installing cameras in arenas to understand the dynamics of team play.

What a tech transition looks like

But how does a fitness brand like Under Armour, which caters to a rapidly growing base of users, transition from apparel and gear to tech? And how can the company keep pace with data demand?

There is precedent for brand reinvention, and moving from apparel to tech is a very of-the-moment corporate transition. Over 70 percent of Under Armours revenue comes from apparel, but CEO Kevin Plank has maintained that they are now a tech company and will evolve as such.

He expects Under Armours revenues to grow from $4 billion today to $7.5 billion in 2018. Their engineering staff has bulked up from 20 employees less than three years ago to more than 500 today, 350 of which are app developers.

And while they beef up their tech infrastructure and data storage needs for both the near and long term, the Under Armour team will also continue to address corporate deficiencies and talent gaps the old fashioned way: partnerships and acquisition.

In the creation of its consumer gear, Under Armour already worked with HTC to design the hardware, Higginbotham says. UA has also spent more than $700 million buying companies like MapMyRun to add to its capabilities. In the IoT, you have to build an ecosystem and UA clearly understands that.

This was the refrain we heard time and again: Under Armour is the leader in fitness tech.

The biggest competitors have either shelved their first IoT products, seen them stall or have yet to enter the market. Under Armour saw an opportunity and seized it. Theyre just beginning and, experts think, will be at the forefront of the Internet of Things for years to come. Just ask Parr, who was bullish on the companys push into the tech sphere.

"Our belief is data is the new oil," Kevin Plank said on a panel at SXSW earlier this year. "I think the companies that will win are using math."


 

Hewlett Packard Enterprise is pushing the Internet of Things forward by building a new class of systems that compute and analyze data where it liveseverywhere. Learn more about HPE's IoT solutions.

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