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Under Armour raises the bar on digital fitness

Under Armour makes a splash a Las Vegas electronics trade show with virtual fitness coach.

Athletes and nonathletes alike increasingly rely on wearable devices to count steps, time a run or a walk, measure heart rate and even track diet and sleep.

Under Armour has expanded into that digital fitness realm in recent years, acquiring a collection of websites and fitness applications, but a question loomed about what it could do with all that data.

The Baltimore-based sports apparel brand offered what it hopes is the answer last week, presenting its vision of the future of fitness at the high-profile Consumer Electronics Show in Las Vegas.

First the athletic wear maker unveiled its first-ever collection of fitness devices, a suite of products dubbed UA HealthBox that included a wristband, a heart-rate monitor and a Wi-Fi-enabled scale — plus a separate "smart shoe" and Bluetooth headphones. It also upgraded the UA Record application that powers those devices.

But it saved the most intriguing news for later when it announced plans to partner with IBM and use its Watson artificial intelligence technology to bring virtual coaching to fitness tracking — tapping all that data from its virtual community of 160 million users.

"It's fascinating, what's happening, and very exciting," said Avi Rubin, a Johns Hopkins computer science professor and technical director of the university's Information Security Institute.

The pairing of IBM, the leader in cognitive computing in a range of applications, and Under Armour, with an ability to sense the activity of vast community of digital users, could lead to new frontiers in fitness, Rubin said.

"It's very cutting-edge," he said. "The idea of linking a lightweight wearable with a computer is not new, but they're taking it to the next level. ... It may be possible to integrate a lot of sources and model in a much more sophisticated way to lead to health outcomes that are better."

For the past decade, the fitness industry's focus has been on data collection, said Chris Glode, Under Armour's vice president of digital.

Under Armour has been part of that, moving into the digital market in 2013 when it acquired website and app maker MapMyFitness. Last year, the company invested $560 million to acquire the creators of mobile health and fitness applications MyFitnessPal and Endomondo and released its own app, UA Record, which can aggregate users' data from a variety of tracking devices.

As its number of connected fitness users has grown, "the amount of data we've collected has become massive," Glode said in an interview. And with the addition of the HealthBox suite introduced last week, "the amount of data is going to grow exponentially.

"We feel like it's our obligation to give more back to the users," he said, including information on "what to do to meet their health and fitness goals. ... We realized we would have to go build this."

IBM seemed the ideal partner, Glode said, because of its applications of artificial intelligence in medical, retail and other fields.

Working jointly from Under Armour's connected fitness offices in Austin, Texas, and IBM Watson's base in New York, teams of engineers, data scientists and doctors will tap Watson's cognitive computing technology to become a virtual coach, health consultant and fitness trainer. The coaching system will give users timely, evidence-based coaching on fitness activity, nutrition and sleep.

Users of the UA Record app will be able to compete against and compare themselves with others of the same age in the database, looking, for example, at average weight, heart rate, workout duration and sleep time. Under Armour plans to add more capabilities over the next year, enabling users to customize programs, track nutrition and food intake, and modify fitness programs based on the weather.

"Cognitive computing is just getting started, and certainly this partnership between IBM Watson and Under Armour will be one of the proof points to see how valuable it can be to the consumer in giving them more insight into their health and fitness," said Angela McIntyre, research director of technology research firm Gartner Inc. "What Under Armour and IBM Watson are striving for is perhaps the Holy Grail that many companies in the health and wellness space are looking to do. I don't think it's going to be easy. Other companies are working on doing similar things."

The global market for health/fitness wearables has climbed to nearly $4 billion and is projected to grow at a compound annual rate of nearly 30 percent over the next six years, wrote Eric Tracy, an analyst with Brean Capital LLC in a research report Thursday.

Under Armour's previous outlook for $200 million in connected fitness revenue by fiscal 2019 now appears conservative, Tracy said, with the newly released wearable technology added to the current connected fitness ads, subscriptions and licenses.

With IBM, "We believe this partnership creates significant opportunity for both evolutionary and revolutionary improvements to the app, including streamlined food logging, fitness plans that account for [real time] local weather conditions and improved behavioral and performance management," he said.

Watson, which continuously learns over time from previous interactions, already has started to transform industries such as health care, insurance and retail, said John Kelly, senior vice president of IBM Research and Solutions Portfolio, in the announcement.

"As the first system of the cognitive era, Watson infuses a kind of thinking ability into digital applications, products and systems," Kelly said. "By leveraging the power of Watson, Under Amour will transform personal fitness, build deeper relationships with its customers and enhance virtually anyone's performance."

The company launched a basic version of the Watson system last week.

"Yesterday, my UA Band automatically synced with my sleep data," said Glode, who said he got feedback on the five hours of sleep he got during the busy trade show. "Watson noticed that and compared it to the 5.7 million users who are like me" and encouraged him to get between seven to eight hours sleep to maintain proper body/mass index.

The system is designed to learn from the results, he said.

"With every intervention or insight, we measure whether that user had a better outcome," Glode said.

Response has been strong already, with 192,000 new users registering on UA Record on Monday alone.

There is tremendous opportunity in the market. About 4 percent of smartphone users are expected to buy a wearable device to track fitness this year, a percentage that is expected to grow to 7 percent of smartphone users by 2019, according to Gartner.

Under Armour is "building an internal capability for collecting data from various sources ... that consumers use while doing fitness routines," McIntyre said, giving the brand "the capacity to connect with their users, the customers of Under Armour, through these apps that the customers want to use anyway."

The company will be able integrate data from its apps and websites as well as from its new tracking products, she said.

"The real value to the customer is going to be how good these insights can get over time in helping them learn new things about how to improve their fitness and health and what to do differently on a daily basis," such as learning ways to get a better night's rest, McIntyre said.

In his report, Tracy said he sees the health- and fitness-related digital wearable market as increasingly competitive, filled with Under Armour rivals that may be offering better or more unique technology. Companies such as FitBit, Garmin and Nike all offer competing products.

Still, Under Armour finds itself with clear advantages, he said. For one, the brand has more connected fitness users than any other player. It's able to fund research and development and has secured big partnerships, including its manufacturing partnership with HTC on the UA HealthBox and the new deal with IBM.

Under Armour's also a step ahead because of a proven ability to build its brand, Tracy said, "to tell a story to the athlete [that] resonates and engages the consumer in a way few can do."

lorraine.mirabella@baltsun.com

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