Under Armour – sportswear manufacturer IP analysis
A company portfolio analysis for Under Armour reveals 430 patents. Over 54% have already been granted and almost 27% are still awaiting approval. It’s a modest intellectual property portfolio, with around a third protecting its designs. It also shows that Under Armour’s patenting activity is growing and changing with the times.
Posted February 15, 2018
(Image source: Maryland GovPics)
We explore how intellectual property insights could level the playing field for a sports clothing and apparel firm against some long established competitors.
(Image source: Maryland GovPics)
Under Armour Inc.
In 1996, Kevin Plank—Under Armour’s founder—was sick and tired of exercising in heavy, sweat logged t-shirts. So, Plank started developing moisture wicking, compression base-layers from synthetic fabrics in his grandmother’s basement. The idea got traction, sales grew and Under Armour (UA) started making a dent into the sportswear market. It didn’t take long for the market leaders, Adidas and Nike, to cotton—or should that be synthetic fibre—on to the game and produce their own. But UA had already laid down a marker in their territory.
Move forward 22 years and Under Armour have diversified their product lines. From the state-of-the-art research lab in Baltimore, Maryland—known as the Lighthouse—product development looks more like a science experiment. Footwear, bags and sports apps are just as likely to carry the distinctive UA logo as its underwear. And Dwayne ‘The Rock’ Johnson, Lindsey Vonn, Andy Murray, Cam Newton and Gisele Bündchen are just a selection of Under Armour’s brand ambassadors.
With annual sales of over $4.8 billion and a market cap of $10.1 billion, UA certainly appears to have a solid marketing strategy and financial clout, but does it have IP clout? And should key competitors be worried?
Under Armour’s IP Strategy Radar
A top level overview of UA’s IP strategy shows a high share of tech diversification within its patent portfolio which is growing year by year. But there also appears to be relatively little improvement indicated.
Why would a global sportswear business need science driven R&D? Can it shy away from joint R&D? Not pay much heed to market demand? And avoid internationalisation?
Looking deeper into IP data often reveals much more insight than first impressions can provide.
Tech Diversification and specialisation
All-time patent filing
148 of Under Armour’s 430 patents are designs. These design patents can be useful in identifying the types of product UA is planning to bring to market.
Footwear/shoes are referred to in the title of 61 individual applications for design. And overall there aren’t any major surprises appearing in this list of 148 patents.
Although it is worth noting, at this point, that there are 5 design patents referring to a ‘display screen with graphical user interface’.
The remaining 292 patents are split into utilities and inventions—a utility patent is typically an invention that protects a smaller inventive step.
UA names over 318 different international patent classification (IPC) codes across this remaining portfolio. This helps validate the initial impression of high technological diversity.
The comparative footprint of UA’s top ten technologies focuses on IPCs A43 and A41. These relate to footwear and clothing, respectively, and one or both feature in 170 (58%) of UA’s remaining patents. Which all makes perfect sense for a company primarily known for its sports clothing.
This is helpful for determining UA’s core competencies and where it has allocated the most resources. With well over half of UA’s non-design patents featuring IPCs A41 and A43 this also explains the analysis of moderate specialisation.
However, there are 2 IPC groups, G and H, that sit below the headlines that may reveal more insight into UA’s future direction and perhaps explain the graphical user interface design patents.
Let’s get physical
In 2013 UA purchased the digital app maker MapMyFitness. Two years later MyFitnessPal and Endomondo—two of the leading fitness and lifestyle apps—became part of the UA portfolio.
IPCs starting with G relate to physics and cover 54 of UA’s patents. Two of these patents are looking at speech recognition within nutrition and recipe identification patents. 11 come under ‘measuring or testing’ methods—such as speeds, direction and more. And 38 come under the loose header of computing and counting.
IPCs starting with H relate to electricity and cover 17 of UA’s patents. The core of these focus on electronic communication techniques.
And with a narrowed down search looking at the words described in patents including IPC codes G and H—it doesn’t take much to identify a clear intent to penetrate the wearable/trackable market.
Innovation following market trends for smart sports apparel and tracking sensors
IP data isn’t a crystal ball—but it can often anticipate the future.
In early February 2018, Under Armour released the HOVR—smart running shoes with a built-in sensor to measure cadence, distance, stride and steps. Of course, you’ll need an app to connect to the smart sensor—UA’s MapMyRun app. Ta-da! The parts all begin to click into place.
You may say that all of this is obvious after the release of such a product—however many of these patent documents have been available well in advance of the HOVR’s launch. This flowchart details a system with multi-axis athletic performance tracking – US9734389, which was published in August 2017.
Could UA’s latest published patent applications give us some insight into what’s next?
Quantity and quality—Growth and improvement
A disciplined approach to patenting
We can see that Under Armour’s patenting activity has grown over the past few years. This graph shows the yearly patenting trend of published patents by technology areas.
The size of the circle represents the number of patents filed in that particular year. UA’s patenting applications for its top IPCs are still on an steady upward trajectory.
But again, looking at the underlying G and H IPCs we can see a relative upsurge in patenting activity in the last 2 or 3 years. Interestingly, that outlier cluster of 3 patents under G01P15 (from 2000) are patents acquired by UA in 2014. They all refer to speed, spin rate and curve measuring using accelerometers and radio transmitters to communicate with a user interface. Is this the tech that is powering the HOVR’s central nervous system? If so, there’s only around 18 months until this patent expires—which means competitors could begin to build on the existing invention without fear of infringement in the not-too-distant future.
It’s also worth noting that some patent applications made in 2016 or later may still be pending publication.
Here we can observe Under Armour’s patenting pace and effectiveness of filing. In the early years of activity UA had a very measured and modest patenting strategy, but as the business has grown, so has its willingness to protect its intellectual property.
The general increase in patent applications has seen a moderate drop in grant rates—dipping below 50% for the first time in 2015—as UA seeks to put down an IP marker. It’s worth noting that 19 of the 60 patents applied for in 2015 are still pending so that grant rate could still increase.
A US sportswear company with worldwide appeal—but not patenting globally
Under Armour is playing on a global platform but has minimal filings outside of the US—choosing to only file around a quarter of their IP in alternative juristictions.
Which means there is potential for some of Under Armour’s intellectual property to be appropriated and replicated outside of its protected regions.
Under Armour’s key competitors – Identifying companies sharing common ground
Under Armour are principally defined as a manufacturing company of sports clothing, apparel and footwear. Knowing that UA is making strides into activity tracking tech means companies such as Strava, Fitbit, Garmin and Suunto should now also be considered on the competitive radar. But for now we will look at the obvious key competitors in UA’s wider marketplace—Nike and Adidas.
Financial and patent portfolio comparative overview
UA is certainly no slouch in terms of sales. But Nike’s annual revenue dwarfs that of UA by nearly 7 times. And Adidas outsell UA by over 4 times. Once we look at the patent portfolio size and value, that gulf widens even further. But it is also worth remembering that Nike has 54 years of experience and Adidas will be 94 this year.
Adidas and Nike are no strangers to sports apps or associated tech. Recent developments include Adidas’ buy-out of the Runtastic App in 2015—it’s already announced plans to kill off the legacy miCoach service and migrate existing users to the Runtastic platform. And Nike has teamed up with Apple to launch a takeover version of the Apple Watch Nike+. With this in mind, we’ve kept our attentions focussed on patents that refer to International Patent Classifications G or H—and with a little refinement we are left with a manageable and more focussed portfolio of just 546 patents.
Increased volume and pace
Nike+ goes back over 10 years. A sensor chip that fit into the sole of your favourite running shoes—and connected to your iPod—was one of the earliest offerings. There were critiques on the accuracy of early devices. R&D teams were kicked into action and consequently patenting activity accelerated significantly. Leading to many companies taking steps to improve accuracy, reliability, functionality and user experience.
Steps that Under Armour has presumably put into action with the HOVR.
Areas of strength and weakness
Here we can see the main areas of patenting activity by technology field coverage and by company—based on a keyword analysis. This chart can help identify the strengths and weaknesses of the top patentees within this technology area, highlighting areas that may need improvement, as well as potential business or licensing opportunities. The most frequent keywords focus on portion, athletic activity/performance, footwear and determination. And Nike are fairly dominant—which considering the volume of patents they hold is unsurprising. Meanwhile, UA—who are outnumbered around 10 to 1 in terms of patent volumes—have some peripheral areas where they are holding their own including health tracking and wireless communications.
Identifying gaps in the market
Plotting patent data on a 3D landscape allows us to identify isolated space and areas with high densities of operation.
Elevated topography shows technology segments with high level of innovation activity. Meanwhile, low areas reveal white space with potential for exploitation. In particular, low-lying spaces between areas that have already experienced activity.
By isolating patents that have been applied for in the past 5 years we can observe an alteration to the landscape. And it feels like Under Armour are starting to stand shoulder to shoulder with over a century of prior experience combined.
Patents Assigned to Under Armour, Inc.
Publication number: 20210279787
Abstract: Methods, apparatus, computer applications, and systems are provided for enabling identification of content to be compiled into a shopping application at a user device. In one embodiment, a general layout for a number of content modules to be displayed and identifying information for content to be inserted are provided from a network server to a user device, the user device then calls the appropriate content and utilizes the layout to generate a page for display to the user natively. One specific variant, activity and profile data collected at the user device via a separate application may be stored at the network and used to select content by the server.
April 15, 2021
September 9, 2021
Under Armour, Inc.
Jeremy Zedell, Murtaza Nemat Ali, Ben Finnigan, Mary Lawyer
Why Nike Has More Patents Than Lockheed, Ford And Pfizer
Nike (NKE) has more U.S. patents than a defense contractor making stealth jets, a pharma developing cancer-fighting drugs, and an auto giant working on self-driving cars.
The athletic gear maker was granted about 500 patents last year and ended 2015 with 5,060 issued patents, which include those that expired, according to the U.S. Patent and Trademark Office (USPTO). That tops Lockheed Martin (LMT) (4,113), Ford Motor (F) (3,563) and Pfizer (PFE) (2,587). And that doesn’t even include patent applications.
Nike’s patents have nearly doubled since 2009, and CEO Mark Parker boasted last year the company has the third-largest U.S. portfolio of design patents. Nike has buried rivals Adidas and Under Armour (UA) in patents, as it looks to maintain its dominance with an avalanche of innovations in manufacturing and design while potentially toying with a wearable device that could appear alongside Apple’s (AAPL) smartwatches and Fitbit’s (FIT) trackers.
“Generally, you should see some type of correlation when a company is releasing innovative, game-changing products,” said Envision IP Managing Attorney Maulin Shah, who said that of Nike’s thousands of granted patents, over 4,200 of them are still active and in force.
Building A Manufacturing Edge
As Nike doubles down on automation and 3D printing capabilities, a recent Macquarie analysis of the USPTO library observed “a meaningful acceleration of (Nike) patents in recent months focusing on new ways to manufacture products. ”
Nike already has its own army of shoe-painting and water-free dyeing robots, just to name a few. And in October, it announced a partnership with Flextronics (FLEX), a manufacturer that has developed an automated way to cut material waste by 50%. Such savings, if flowed to the bottom line, could add 23 cents to Nike’s 2016 earnings per share, Macquarie analyst Laurent Vasilescu estimated in April.
Separately, Nike is building a “3D digital design system” in partnership with DreamWorks Animation (DWA) that includes “nearly instantaneous digital print applications, photo-real 3D visualizations and ultra-rapid prototyping.”
Compared to Nike’s more than 4,200 active patents, German rival Adidas has “kind of been stagnant,” with a U.S. patent portfolio that is about a ninth the size of Nike’s, not including those gained in its acquisition of golf equipment maker TaylorMade, said Shah. But Adidas does have a “relatively large” patent portfolio in Europe, he noted. Globally, Nike has about 19,500 patents and patent applications vs. Adidas’ roughly 2,400.
Under Armour, which has been happy to be framed as a tech company with a penchant for snapping up fitness apps, only has about 104 issued U.S. patents, almost two-thirds of which are design and not utility patents, by Shah’s count. Utility patents in athletic apparel primarily deal with material — think compression, moisture-wicking — and manufacturing methods vs. patents for clothing designs.
Innovation aside, patents can also be an indicator for something far juicier: a peek into a company’s product strategy.
For example, Under Armour was granted on March 29 a patent for a one-armed compression sleeve designed to warm a pitcher’s throwing arm between innings — an interestingly specific item that indicated potential future investments in baseball. Indeed, a few weeks later, the company signed Washington Nationals outfielder Bryce Harper, the reigning National League MVP, to what ESPN said is the biggest endorsement deal ever for a baseball player, though terms weren’t disclosed.
Nike Still In The Gadgets Game?
While most of Nike’s recent patent activity is related to manufacturing, a dive into its sprawling portfolio indicates a potential shift in its device strategy.
Nike hasn’t been in the wearables business since axing most of its FuelBand team two years ago, and the TomTom-powered Nike+ Sportwatch is no more. Nike instead has been pushing its revamped Nike+ app over any hardware.
Some have said the athletic apparel giant is shying away from hardware development because of its partnership with Apple, particularly since its Nike+ app can be used on the Apple Watch. But its patents say otherwise.
There has been a “surge” in wearable-related applications from Nike in the last two or three years, Shah said, and the company now has 261 active patents related to wearable tech vs. Adidas’ 99 and Under Armour’s dozen patents.
Published with the USPTO recently, images from a patent for an “athletic watch” look an awful lot like the TomTom version of Nike’s watch: a boxy-looking accessory with a perforated band and large numbers. In fact, given the slight aesthetic differences — an extra button here, a missing button there, a thinner wristband — the drawings could easily be a newer edition of the Nike+ SportWatch, though it is not clear if that is the case.
Both Nike and TomTom did not immediately respond to a request for comment.
“It definitely seems that Nike is keeping its options open on this front,” Macquarie’s Vasilescu told IBD after viewing an earlier trio of patent applications for an athletic watch that were published on March 17 and first filed last September.
Meanwhile, about 20% of Adidas’ patents are focused on wearables. But such products may never come to market, Shah said, noting that companies also license ideas if they aren’t in a position to make gadgets themselves.
Patent Stargazing: Days Of Future Past
Given the sheer number of applications that are filed with the USPTO each year – 629,647 in 2015 alone – some might consider it folly to think digging through musty government archives might shed any light on what kind of consumer products could hit shelves.
Indeed, trying to decipher a company’s product pipeline by looking at the U.S. patent library is a little bit like astronomy — both constellations and published patents are maps of the past. Starlight has to travel so far to reach Earth that some of those celestial bodies that appear to be burning in the night sky may already be dead, or dying.
Similarly, it takes about 24.6 months on average for filed patent applications to be published on the USPTO database, according to the agency. Most are actually published within a year and a half, Santa Clara University School of Law Assistant Professor Brian Love told IBD, though ideas were conceived and worked on well before a filing.
“It’s probably at least two years old, if not more, and then by the time the patent issues, you’re talking about tacking on a couple more years on top of that,” he said. “So it is kind of a window into the future, but it’s not that far of a window into the future.”
Still, filings can offer clues years in advance. Case in point: Nike rolled out self-lacing Marty McFly-inspired shoes in March, after Nike designer Tinker Hatfield confirmed in early 2014 that power lacing would be unveiled the following year. But the company’s “Back to the Future” resurrection could’ve been foreseen long before that. Nike’s first granted patent for an “automatic lacing system” appeared in 2011.
Of course, some companies stake out IP turf not for the purpose of developing those ideas, but to thwart competitors’ dreams. This type of defensive patent publishing, as it is known, is not uncommon with tech giants like IBM (IBM) or Alphabet (GOOGL) unit Google, say experts.
“The consequence of publishing something is that you lose any sort of trade secrets rights you might have in it, but you’re also stopping somebody else from patenting it,” said Love.
Watchmaker Swatch has reportedly been on a smartwatch-patent filing spree over the last few years. What it intends to do with them is a mystery.
“There’s a lot of rumors in the patent industry: Will Swatch start suing competitors, or are they actually just building up patents because they’re about to launch an entirely new product line?” said Shah.
Regardless, no matter what Nike, Under Armour or Adidas wind up bringing to market, all of this patent-filing and R&D means that investors and consumers can likely expect growth from the activewear space.
“I think we are in the golden age of tech in the athletic footwear business,” said NPD Group analyst Matt Powell. “I have never seen so many new tech advances (in products and manufacturing) that we are currently seeing. So add that to the fact that there’s a record number of patents and the future looks really bright.”
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Under Armour Company Profile: Stock Performance & Earnings
Under Armour Overview
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- (As of Thursday Closing)
Under Armour General Information
Under Armour develops, markets, and distributes athletic apparel, footwear, and accessories in North America and other territories. Consumers of its apparel include professional and amateur athletes, sponsored college and professional teams, and people with active lifestyles. The company sells merchandise through wholesale and direct-to-consumer channels, including e-commerce and more than 400 total factory house and brand house stores. Under Armour also operates a digital fitness app called MapMyFitness. The Baltimore-based company was founded in 1996.
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Under Armour Stock Performance
(As of Thursday Closing)
|Stock Price||Previous Close||52 wk Range||Market Cap||Shares||Average Volume||EPS|
|$22. 13||$21.72||$13.16 – $26.45||$9.4B||468M||5.84M||$0.80|
Under Armour Financials Summary
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Under Armour Valuation & Funding
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Under Armour Comparisons
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Under Armour develops, markets, and distributes athletic apparel, footwear, and accessories in North America and other t
As of 2020
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As of 0000
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Under Armour Competitors (19)
|Company Name||Financing Status||Location||Employees||Total Raised||Last Financing Date/Type||Last Financing Amount|
|00000 000000 00000||Corporation||New York, NY||00000||00000||00000000||00000|
|00000000 000000000||Corporation||Portland, OR||0000||00000||00000000||00000|
|00 00000000000||Corporation||Denver, CO||00000||00000||000000000||00000|
|0000||Formerly PE-Backed||Herzogenaurach, Germany||00000||000. 00||00000000000|
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Under Armour Patents
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Under Armour Recent Patent Activity
|Publication ID||Patent Title||Status||First Filing Date||Technology (CPC)||Citations|
|US-20210298375-A1||Face mask and method of making the same||Pending||30-Mar-2020||0000000000|
|US-20210251322-A1||Apparel having a waist portion and sleeves with a thumbhole||Pending||14-Feb-2020||0000000000|
|US-20210227926-A1||Sole structure for an article of footwear||Pending||23-Jan-2020||0000000000|
|US-20210212443-A1||Backpack with clip||Pending||15-Jan-2020||00000000|
|US-20210177102-A1||Method of making an article of footwear with braided upper||Pending||17-Dec-2019||A43B1/04|
Under Armour Executive Team (34)
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|Name||Title||Board Seat||Contact Info|
|Patrik Frisk||Chief Executive Officer & Board Member|
|Stephanie Pugliese||President, Geographical|
|David Bergman||Chief Financial Officer, Finance & Chief Accounting Officer, Accounting|
|Colin Browne||Chief Operating Officer|
|Ryan Drew||Vice President & General Manager, Global Basketball|
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Under Armour Signals
0.80%, 93rd %ile
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|Investor Name||Investor Type||Holding||Investor Since||Participating Rounds||Contact Info|
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Investments & Acquisitions (10)
|Company Name||Deal Date||Deal Type||Deal Size||Industry||Lead Partner|
|000000 0000000||13-Sep-2021||0000 00000||00000||Other Healthcare Technology Systems||0000 00000|
|MyFitnessPal||17-Mar-2015||Merger/Acquisition||00000||Application Software||00000 00000|
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Are You in the Sports IP Game? Protecting Your IP with Patents and Trade Secrets | Articles | Finnegan
In the sports and fitness industry, a thoroughly developed intellectual property (IP) strategy may not only help launch a company but also enable it to develop into a profitable and successful competitor in a fairly saturated marketplace.
For example, in its early stages, Under Armour protected its proprietary products and ideas, which eventually captured a relatively significant share of the sportswear market. Now, after just 20 years of existence, Under Armour thrives in the sportswear arena, with a market capitalization of $21 billion. Under Armour’s continued growth has been spurred, in part, by the acquisition of other well-known fitness companies, such as MapMyFitness, MyFitnessPal, and Endomondo, which also focused on protecting their innovations and proprietary technology. By protecting organic innovation as well as acquiring protected technology, Under Armour has developed a strong IP strategy that helped it compete in a marketplace already dominated by some major players and gave it leverage to stave off acquisition by larger competitors. Whether you are a startup, mid-sized company, or a large corporation, exploiting your potential IP assets will open new revenue streams and further safeguard your existing assets.
A good IP strategy requires a detailed examination of all company assets, including proprietary information, to determine which type of intellectual property is most effective for protecting assets. Trademarks protect a company’s name or logo, while copyright protects original works of authorship, like customized nutrition programs, fitness videos, payperview streams of games and matches, or even source code for a fitness app. However, when an asset is a product or information that is proprietary and valuable, like a new fabric, an improved shoe design, or a secret formula, then a company must strategically determine whether to protect the asset as a trade secret or through pursuing patent protection. We highlight and address the factors relevant to making this determination, as well as the implications this decision can have on a company’s survival and growth.
Disclosing the Asset
When determining whether an asset should be protected using patents or trade secrets, a company must understand what makes the asset valuable. For example, the success of some products may depend on public disclosure of an asset. Patent protection requires public disclosure of an asset in exchange for exclusive rights over the asset for 20 years. This is the quid pro quo of getting exclusive patent rights. Alternatively, companies sometimes protect their valuable designs and technology through trade secrets. A trade secret can be any proprietary business or technical information that has economic value. But trade secrets must be kept secret.
Under what circumstances might trade secret protection be preferred? A sports drink manufacturer, for example, may want to avoid applying for a patent relating to a proprietary formula, which would require publicizing the ingredients of its sports drink, for fear that others could slightly alter the formula to avoid infringement, while developing a nearly identical sports drink—and thereby sever part of its market share.
Coca-Cola is a perfect example. Coca-Cola has made extensive efforts to keep its recipe out of the public eye, protecting it as a very valuable trade secret. If Coca-Cola had obtained a patent on its formula, however, the recipe would have been disclosed to the public. While Coca-Cola would have had patent protection for 20 years excluding others from using its recipe during that time, the recipe would be less valuable to Coca-Cola after the patent expired and the public could freely copy the formula. In such a scenario, Coca-Cola would be engrossed in a highly competitive soft-drink market, forced to continuously innovate new formulas for new drinks to remain a dominant market participant.
In contrast, a golf club manufacturer may prefer to patent its innovative golf club technology because, once placed into the market, that technology could be easily reverse-engineered (not so easy with Coca-Cola’s formula). Additionally, a company must consider how an asset will be used in the ordinary course of business. If the asset is constantly at risk of being disclosed publically, then it may not be practical (or possible) to protect it as a trade secret.
Challenges to Obtaining and Maintaining Protection
Companies should also consider the different challenges in obtaining patent or trade secret protection. Acquiring a patent to protect an asset requires filing an application with the United States Patent and Trademark Office (“Patent Office”). This application process can be rigorous and lengthy under some circumstances.
Utility v. Design Patent Protection
There are two types of patents, providing different scopes of protection: utility and design. Utility patents protect a specific function of an invention, and the application process determines if the invention is novel, useful, and nonobvious. As seen in the chart below, golfing and skiing/snowboarding technologies make up 75% of the sampled sports and fitness utility patents granted.
Design patents, on the other hand, protect visual ornamental characteristics of an article and have a much simpler application process. There has been a significant increase in the numbers of design patent applications in the last ten years (as indicated in the chart below), suggesting that companies are placing more value on protecting aesthetic designs as well as improved technology.
Numerous companies in the sports and fitness industry actively protect their innovations with utility and design patents. These companies have increasingly invested in design patents relating to, for example, sportswear, smart watches, golf clubs, and more. In addition to protecting functional and aesthetic aspects of these physical products, companies have shifted their focus towards protecting mobile technology. For example, Under Armour company MyFitnesssPal owns a utility patent on a mobile application that provides customers a diet and exercise management system, while another Under Armour company, MapMyFitness, owns one on its app’s ability to authenticate a user’s fitness-related activities (shown in the patent figures below).
Design patents are also available for protecting a mobile application’s graphical user interface features. For example, Samsung has design patents that protect its display screens on wearables (shown below).
Another consideration in obtaining patent rights is that utility patents cost significantly more than design patents, which are generally much less expensive. Trade secrets, on the other hand, do not require a registration process with the Patent Office and are immediately effective. However, in order to claim an asset as a trade secret, it cannot be generally known to the public, and a company must adopt reasonable security measures to maintain secrecy of the asset. The lore surrounding the lengths to which Coca-Cola guards its proprietary formula is a classic example. While your company might not need to keep your trade secret in a vault, always remember: secrecy is key. If the trade secret is ever disclosed or discovered through fair and honest means, than any previously held protections cease to exist.
Therefore, trade secret costs are driven by maintaining the asset’s secrecy, and vary drastically depending on the asset itself and how it is utilized. Some efforts are purely procedural and simple to adopt, such as sharing the asset only with need-to-know individuals and employees and requiring all individuals and employees with access to sign a nondisclosure agreement. Other efforts, which may be needed for more high-tech assets, may require separate laboratory space or intensive computer security software that limits access to and prevents theft of the asset.
Scope of Protection
Companies desire broad protection for their assets providing a wide and diverse scope of coverage. A patent applicant is obligated to succinctly describe its asset, the asset’s innovative qualities, and the scope the patent covers. In addition to this scope, the patent also covers any concepts that are not explicitly stated within the patent application but are obviously equivalent. The Patent Office, however, may require you to narrow the scope of your protection before granting a patent. This uncertainty may make it difficult for a company to predict exactly how broad their scope of protection will end up being and whether the public disclosure of their asset is worth the risk.
In contrast, for trade secrets, there are no formal requirements to define the scope of a trade secret. This allows companies to more loosely and broadly define the scope of their trade secret protection over an asset, thereby protecting underlying ideas that were not initially perceived as trade secrets. That being said, because trade secrets must be identified and labeled as trade secrets in order for a company to recover damages when trade secrets are stolen or misappropriated, careful management and reevaluation of trade secrets is necessary. Moreover, trade secret protection does not give a company an exclusive right to prevent others from using its trade secret, like a patent would. It only protects against illegitimate discovery or improper use of the trade secret (through, for example, misappropriation or breach of a nondisclosure agreement).
Although trade secret protection and patent protection are mutually exclusive, companies can use both to maximize the valuable lifespan of their asset. For example, a company can seek patent protection for an asset that previously existed as a trade secret. This allows a company to take advantage of the indefinite duration of a trade secret, while still allowing it to obtain patent protection if the confidentiality of a trade secret becomes endangered. Additionally, a company that sufficiently protects its asset as a trade secret (through following established trade secret policies and diligent record keeping) can avoid being sued or enjoined from using that asset if a competitor later obtains a patent that covers the asset.
Enforcing Trade Secrets and Patents
As soon as a patent issues, a company can begin enforcing and monetizing the patent to maximize profitability margins. First, a company can surveil and target other companies that make, use, sell, offer to sell, or import a product or service that uses its patented technology or design and obtain judgments requiring the infringing companies to cease any further infringing activity and pay damages that resulted from the infringement. As illustrated below, damages for patent infringement have generally escalated in recent years, hitting an all-time high of nearly $3.5 billion awarded in 2012. And in some instances, companies may be successful in blocking any additional importations of the infringing product.
Second, a company can offer licenses to potentially infringing companies, and receive royalties for use of its patented technology or design. For example, sports apparel and equipment companies target professional leagues, such as the NFL, NBA, MLB, PGA, and college universities, for licensing deals, allowing them to have a stronghold on that specific market while promoting their own brand.
For trade secrets, a company can target any party that misappropriates their trade secrets, acquires them through improper means, or breaches a contractual or implied duty to maintain the confidentiality of the secret or restrict the use of it. As a remedy, the company can obtain a judgment from a court requiring the guilty party to stop any further misappropriation, maintain secrecy, and pay appropriate damages. A company may license a trade secret indefinitely; however, each licensing deal puts the trade secret’s confidentiality at further risk, which may necessitate additional protections. Trade secret misappropriation cases may also be more successful in obtaining preliminary injunctions, which allow a company to immediately prevent another party from disclosing the trade secret, well before a court ultimately decides liability.
Weakening Patents vs. Growing Positive Perception of Trade Secrets
There has been a substantial increase in patent litigation in the last decade, which has motivated companies to pursue patent protection over relying on trade secrets. Despite this increase, numerous cases in recent years have made it more difficult to obtain, keep, and enforce certain patents and forecasters predict that the trend will continue. Both the Patent Office and federal courts have denied patent applications or invalidated patents relating to mobile apps and computer software based on subject matter eligibility issues. However, recent cases in 2016 suggest that the pendulum may be swinging back in the other direction, allowing more software or computer-implemented inventions to receive patent protection, but just how far the pendulum will swing remains to be seen. Additionally, because of the uncertainty, obtaining patents has become increasingly more difficult, costly, and time consuming. In light of such varied patent protection afforded some technologies, companies are beginning to increase their reliance on trade secret protection, especially when doing so does not block them from obtaining patent protection down the road.
Additionally, the U.S. government, the courts, and the legal industry have focused on enhancing enforcement of trade secret rights and providing more effective remedies for trade secret violations. For example, President Obama signed into law the Defend Trade Secrets Act (DTSA) earlier this year, which created the first federal civil cause of action for trade secret misappropriation. Under this new law, companies can now bring suit and seek remedies in federal court, in addition to state court. The Act includes much stronger protection to preserve the secrecy of alleged trade secrets in lawsuits, which alleviates trade secret owners’ fear of disclosure.
Correctly protecting an asset not only maximizes the asset’s value, but can also lead to overall substantial growth. A company must always be proactive and invest resources to meticulously analyze an asset and apply the numerous factors discussed to any of its valuable assets.
Under Armour files trademark infringement lawsuit
Under Armour is an apparel manufacturer that specializes in sportswear and footwear. The company, which is based in Baltimore, filed a lawsuit on Oct. 8 against a company it says has violated its trademark.
In the lawsuit, which was filed in the U.S. District Court for the District of Maryland, Under Armour alleges that the Colorado company Ageas has been selling sportswear, similar to that sold by Under Armour, under the brand “Hotsuit” with a logo that resembles Under Armour’s logo. The lawsuit claims that the use of the logo has created confusion in the marketplace and unfairly raises the infringing company’s profile while harming both Under Armour and unwitting consumers.
Under Armour is demanding a trial by jury and wants the company to be prohibited from using the logo. The company says it is obligated to protect its brand from dilution caused by infringers seeking to give the false impression that their brand is somehow associated with Under Armour.
Intellectual property consists of not only just trademarks and logos, but also ideas, creative work, software design and more. Taking steps to protect trademarks and other intellectual property can be critical for a company or entrepreneur. Failing to take the proper steps to protect a trademark against an initial infringement can make it more difficult for a company or individual to do so in the future. An individual or a business that is concerned about theft of intellectual property or trademark infringement might want to consult an attorney about how to proceed. The first step is not necessarily a lawsuit. In some cases, it may be sufficient for an attorney to contact the company and address the matter. Companies might also want assistance with registering a trademark and taking preventative measures in order to avoid this type of infringement. Registration of a trademark may strengthen a lawsuit like the one filed by Under Armour.
90,000 Under Armor Brand Story: The Bar High
Comfortable and high-tech Under Armor sportswear, which the whole world knows today, Kevin Plank designed primarily for himself. As a professional athlete, he was keenly interested in breathable fabric technology. But before creating an innovative product and earning his first million, he had to sweat a lot, both literally and figuratively.
Dryness and comfort
Kevin’s first major job was selling flowers. He was engaged in the delivery of roses: he bought them cheaply a few days before the holiday (Valentine’s Day or March 8), kept them at home in a cold bath and sold them on the solemn day at a significant mark-up. This is how he first earned a substantial amount, which he set out to invest in his next business.
The young man quickly realized that speculation in someone else’s goods is not his topic, he is capable of more.Being an active and quick-witted guy, he dreamed of creating something of his own, something that no one else has. In 1996, when Kevin was playing for the University of Maryland football team, the idea literally came out of thin air. Changing another cotton T-shirt soaked through, the athlete complained about how great it would be to train in a uniform made from a special breathable fabric. At that time, moisture-wicking technologies were used only in the manufacture of shoes and outerwear. Planck took the topic seriously and quickly found a suitable fabric that absorbs moisture but stays dry.He ordered seven different designs of T-shirts from the tailor, handed them out to his teammates, and listened carefully to their feedback on the pros and cons of the new garment. The main thing that interested him was the athlete’s comfort level during training. Having chosen the optimal model, he named it # 0037 and ordered the sewing of a size line.
T-shirt # 0037 from Under Armor
In those days, Kevin had no office, no store, no advertising. The entire small business was located in the basement of his grandmother’s house, who believed in her restless grandson and supported him in everything.The guy was engaged in the first sales alone, traveling around the city and selling directly from the trunk of a car. A year of such painstaking work brought the novice entrepreneur only sixteen thousand dollars.
Always say yes
Kevin’s competitive advantage was that he never said no. When asked if he sews long-sleeved T-shirts or hoodies for cool weather, the guy replied without batting an eye that it was all there.And then he ran to make sketches of T-shirts and sweatshirts in order to provide the customer with ready-made models within a week. In his quest to please everyone, he often went into debt and suffered from an acute lack of free time. Demand outstripped supply, Planck realized that it was time to get into business seriously and began to look for a name for it. The first variants of the brand name, such as Heart and Body Armor, could not be patented – they were occupied. But in one of the patent applications, Colin, Kevin’s brother, made the mistake of writing the name Under Armor.It turned out to be free, and the brothers received the go-ahead for registration. By the end of 1996, several contracts were signed with the fledgling sportswear company.
In 1997, Kevin Planck created the ColdGear fabric to keep the athlete warm. In parallel with this, the AllSeasonGear line of clothing was sewn, allowing a person to feel comfortable in any weather. A distinctive feature of Under Armor was the testing phase. Any new product was initially provided free of charge to a group of schoolchildren and students who actively trained in it and shared their feedback.Based on their opinion, the director of the company brought the models to perfection. Satisfied with the results of his work, Kevin threw all his efforts into conquering large sales markets.
The Under Armor brand was sorely lacking in advertising and Planck remembered the story he heard in his student years about how one startup sent a hat with his logo as a gift to Mike Tyson. The appearance of Iron Mike on television wearing a branded headdress has brought the manufacturer a huge number of lucrative orders.Kevin took this idea into service and sent a set of football kits to several famous football players with a request to take a photo in it, work out and write a review. Coincidentally or not, the Oakland Raiders football team’s quarterback appeared on the cover of USA Today, wearing signature Under Armor clothing. This advertisement helped to secure new large orders.
Still from the film “Every Sunday”
In 1999, Plank and his team signed a successful tailoring contract for the cast of Every Sunday, starring Al Pacino.Next came the picture “Understudies” with Keanu Reeves, flaunted on the screen in a red Under Armor T-shirt. Sales skyrocketed to $ 750,000 in a year, and Kevin appointed himself an official salary for the first time.
In the following years, Under Armor clothing appeared on multiple screens, for example, in the movie “Fast and Furious 5”.
Left my grandmother
It’s time to grow, and Under Armor has moved its headquarters from the basement of Grandma’s house to an old soap factory in south Baltimore.The company’s annual income by that time exceeded one hundred thousand dollars.
Former Procter and Gamble building in Baltimore, Maryland. Now part of Under Armor HQ
The popularity of the brand grew inexorably, and contracts rained down one after another. Baseball players, basketball players, athletes performed in Under Armor uniforms. Kevin Planck managed to sign contracts with the NBA and NHL. And in 2000, the company became an official partner of the US Olympic team.
In 2003, a viral advertisement for Protect This House appeared on television.The Under Armor brand was positioned in it as the choice of a new generation. It was a series of videos, invariably ending with the corporate slogan “I Will”. The participation of famous athletes and the inspirational music of Drum & Bass turned the video into an anthem for those who have chosen a sporty lifestyle.
Sportswomen, Komsomol members, beauties
Also, 2003 was marked by the release of a line of women’s clothing. Before that, the fair sex was undeservedly forgotten, because the main image exploited by Under Armor marketers was a brutal, pumped-up man with a strong-willed look, pulling iron.Creative director of the company Liane Fremer explained to her colleagues that girls are not only pink dresses with rhinestones. Gathering a team of like-minded people, she created a series of elegant sportswear for women.
American ballet soloist Misty Copeland in the Under Armor advertising campaign
Not only famous athletes were attracted to the advertisement, but also the first black-skinned soloist of the American ballet Misty Copeland, as well as the Brazilian supermodel Gisele Bundchen. Their task was to reflect the main idea of the campaign that Under Armor clothing is not only for professional athletes, but also for ordinary girls with an active lifestyle.The video made a splash and scored six million views on YouTube.
Shoes he wears Under Armor
In 2006, in the wake of success, Planck realized that, having conquered the clothing market, it was logical to move to shoes and accessories so that his company could meet all the needs of an athlete. This is how the Click-Clack series of football boots was born, which in its first year captured more than twenty percent of the football shoe market.
A year later, the line also includes a model for softball, baseball and lacrosse.They also launched the sale of running shoes that were of high quality, interesting designs and affordable prices. Camouflage sneakers were especially popular. Later, the company released the legendary basketball shoes, in which Brandon Jennings scored fifty-five points per game in the NBA.
All of this brought about a number of positive changes: Under Armor opened its new headquarters in the old Olympic Stadium in Amsterdam and built its first brand store in Annapolis, Maryland.
2010 ended in a truly incredible financial victory as Under Armor surpassed $ 1 billion in annual revenue.
Kevin Planck on the cover of Forbes
On the wave of success
The popularity of Planck’s company has gone beyond the United States. Through partnerships with professional teams and players around the world, Under Armor is becoming a recognizable brand in Japan, Europe, Canada and Latin America. First store opens in China, Under Armor partners with Tottenham Hotspur football team.
Under Armor Tottenham Hotspur Kit Presentation
Years later, Kevin Planck finally removes the “enemy” label from cotton fabrics. The company’s technologists, through long painstaking work, are developing a revolutionary technology for waterproof yarn. This is how the Charged Cotton line of cotton sportswear is born, which dries quickly and does its job one hundred percent.
In 2013, Under Armor merged with Endomondo, an app for those who are actively involved in sports.In 2013, two technologies were introduced that made sports equipment similar to a computer. This system is able to measure the main indicators of an athlete during training (heart rate, intensity and quality of training, calories burned, tasks completed) and transmit data to a smartphone. Over time, the same sensors began to be built into shoes, which made it possible to even more accurately monitor a person’s condition. Over the past three years, Endomondo has confidently become the leader in the sports applications market, its audience is growing rapidly, and the functionality is becoming more and more interesting.
By the end of 2014, Under Armor had become the second largest sportswear brand in the United States.
Opening of Under Armor Steve Kwak, Baltimore, Maryland
On the company’s 20th anniversary in 2016, the first “smart boot”, the Speedform Gemini 2 Record Equipped, was launched to maximize the use of energy while running.
Today, Under Armor is an innovative company with a closed research laboratory, to which no more than one percent of employees have access.The entrance to it is through a device that reads the pattern of veins. Inside, we are working on the most advanced products and concepts of the company and testing the latest developments on real athletes. The company annually holds a tender in the field of sports innovations Innovation Challenge. The UA management, led by Plank, personally selects the finalists, and the winner receives a fifty thousand dollar grant, as well as a unique opportunity to participate in the development of the brand’s products. The competition won such innovations as the Light Bohrd LED Night Run T-shirt and the one-handed magnetic zipper invented by engineer Scott Peters.
Under Armor Connected Fitness headquarters in Austin, Texas employs approximately 150 people, including former MapMyFitnes employees
Today Under Armor stands for the finest underwear for men and women in sports and casual wear. There is a division into seasons: HeatGear – for summer, ColdGear – for winter, AllSeasonsGear – for off-season. Representative offices of the company are located in many countries of the world, and there are branded stores in all major cities and capitals.
Text: Evgeniya Cherdantseva
Photo: wikimedia.org, forbes.com, underarmour.com, baltimoresun.com
90,000 How Nike overtook SpaceX, Intel and Dell in innovation
On January 12, the Boston Consulting Group released a list of the world’s most innovative companies. Digital revolutionaries such as Uber and Airbnb have burst into the top, displacing traditional leaders of the ranking – industrial innovators such as General Electric or Daimler.But the real breakthrough in the ranking was made by the companies – manufacturers of sportswear and footwear, which showed the fastest growth.
In 2016, Nike and the newcomer to the Under Armor rankings are perhaps the most prominent in the new BCG rankings. The first rose in the ranking by as much as 15 positions, and the second entered it for the first time, but immediately took 22nd place, ahead of Nike itself and a good half of the participants.
Sneakers without laces and more
Advertising on Forbes
Nike in 2016 relied on innovation, by all means defending the right to be called the leader in the sneaker market in the first place.Despite the fact that Nike did not have time to release self-lacing sneakers on sale by the conditional arrival of the hero of the fantastic movie “Back to the Future” in 2015, the next year the company created for the mass market not just a replica from the film, but a truly original model. HyperAdapt 1.0 sneakers are equipped with a special sensor inside that, in contact with the foot, automatically tightens the laces. The sneaker was exhibited in a limited range and, despite the high price of $ 720, quickly sold out, and the model’s resale price reaches $ 4,000 per pair.However, limited collections are a favorite tactic of sports shoe manufacturers, and Nike is no exception. Companies’ marketers create demand that exceeds supply – thus a whole culture of sneakerheads, sneaker collectors, has already formed.
Last year, Nike engineers created the Anti-Clog Traction that won’t bog down in mud. Adaptive polymers react with water and prevent dirt from sticking. Nike also took the chance to celebrate its presence at the Rio Olympics by announcing new clothing technologies for athletes.The form with Aeroswift technology promised to be 10% lighter and 50% more elastic. After the presentation of the updated technology of the Nike Vapor track and field uniforms, the clothing went on sale. The company’s revenues during this period also increased, showing the best result in a year, but it cannot be argued that Aeroswift was the reason for this growth.
But Nike is not limited to product innovation. The company is also developing as a developer of mobile applications. Last year, Nike and Apple launched the Watch Nike + smartwatch for running enthusiasts.There were acquisitions, too: Nike bought Richard Branson’s Virgin Mega startup in the summer to launch its own digital studio in New York. Although it is a “little-known 12-person startup” that has developed mobile apps, Nike hopes to use it to develop its own mobile services, most notably Nike SNKRS, where information about the company’s new products can be found. Back in 2013, the Nike + mobile app had over 18 million users, overtaking its current competitors in the app market.
Every major sports brand claims to use one or another latest technology, but in fact, few manage to prove “innovativeness”. Kevin Plank, the founder of the surpassing Nike in the BCG Under Armor rankings, has invented a proprietary material that helps athletes sweat less. But the company did not receive a high rating in the rating for this invention at all. Under Armor has acquired a number of startups MapMyFitness, Endomondo and MyFitnessPal for just over $ 500 million.The company now has five applications, including two of its own. This became the basis for the development of the company towards the Internet of Things, because several of the company’s applications are synchronized with trackers and other wearable gadgets at once, reading information about the state of a person, on the basis of which personal recommendations are created. Under Armor brings small innovations to production sites and all aspects of the business. Sensors, trackers, proprietary applications for smartphones – all this is synchronized and turns clothes not just into a thing, but into a valuable tool for an athlete.To oppose Nike’s self-lacing sneakers, the company decided to print a new model of UA ARCHITECH in 3D. Under Armor has also released a limited edition for $ 199, and now a pair of ARCHITECHs can be bought at auctions for a minimum of $ 750.
Nearby competitors Nike are also announcing their new products as cutting edge. However, Adidas innovations are most often focused on environmental initiatives. For example, Nodye and DryDye dyeing technologies allow you to spend 50% less energy and dangerous chemical additives when dyeing fabrics.In addition, the company successfully implements schemes to reduce production waste and increase recycling. Many Adidas models are valued in the collector’s market, and queues are gathering for the brand’s collaborations with famous athletes and musicians. So, the sensational collection with the singer Kanye West Adidas Yeezy 750 Boost in the secondary market was in demand at a price of $ 1,800 per pair.
Yoga apparel and accessories manufacturer Lululemon is also frequently ranked among innovative growth companies.The approach of the sports brand from Canada is similar to that of Adidas, with environmental and social initiatives at the forefront of innovation. For example, Lululemon has turned professionals into evangelists instead of the usual sponsorship of athletes, giving them the opportunity to advise the company on products. However, the company received the nickname of a patent troll for actively defending its development portfolio. More than 30 patents of the company were mostly related to the design of things.
Is there profit from innovation?
In the fiscal year that ended at the end of May, the net profit of the sportswear manufacturer Nike increased in annual terms by 15% to $ 3.76 billion.And although Nike does not disclose the amount of development costs, it seems that the company spends a lot of money on technology development. This is confirmed by a huge number of patents. Nike, for example, applied for 541 patents in 2014, but broke its record in 2016 with 687 patents. At the same time, about 80% of applications related to four main areas: footwear, clothing, data processing and manufacturing. What’s more, Nike has more patents (5,060) than auto giant Ford Motors (3,563) and pharmaceutical industry leader Phizer (2,587).Nike President Mark Parker himself is convinced that innovation is the secret of the company’s financial success.
To sell a new sneaker or a line of sportswear, market leaders often announce a new development that makes their product unique: a few percent lighter, many times more comfortable, and so on. But real innovation is not a short-term modernization of existing things, it is a change that gives a qualitatively new product, possibly in the long term.These innovations are not changing a particular collection of clothing, they are changing companies. Today, calling Nike and Under Armor “apparel and footwear makers” is like calling Apple just a “tech maker.”
Both Nike and Under Armor are creating IoT technologies, developing their own mobile applications, constantly experimenting with new materials, but all this is expressed not only in patents, but also in products, each of which becomes a sensation among buyers of sportswear.Such products are not just waiting, there are queues behind them, and innovations bring companies not only image, but also financial success.
Under Armor created the sports medical mask
Under Armor has released a unique mask with PROTX2 impregnation. Research has proven that it destroys COVID-19.
In response to the challenge of the times, Under Armor created the UA SPORTSMASK reusable waterproof training mask in record time to maximize air circulation.This is a unique mask specially designed to prevent infection with diseases that are transmitted by airborne droplets.
There is a flexible attachment at the top of the mask that provides a snug fit to the skin and prevents the flow of air from which the goggles can fog up. The mask can be washed and dried, so it is more environmentally friendly than disposable.
UA SPORTSMASK is a unique three-layer model designed especially for athletes. Its first layer consists of bulk fibers.It is lightweight, with air pockets in the fabric structure, providing breathing comfort. The second layer is made of breathable foam that allows air to pass through and retains moisture. The third layer is UA ISO-CHILL technology – an elastic fabric with a cooling effect and a metal-free antibacterial PROTX2 ™ treatment that inhibits the growth of bacteria on the surface of the mask.
In laboratory tests, PROTX2 has been proven to kill COVID-19. The effectiveness of the technology is confirmed by the US Environmental Protection Agency.
“I think that the use of masks is a kind of team sport, because the participation of each participant is important for success. If everyone is wearing masks, it really does reduce the spread of the coronavirus. This is especially important in close contact settings such as in the gym or during group workouts, ”said Dr. Daniel Durand, director of innovation at LifeBridge Health Medical Corporation.
The idea for UA SPORTSMASK originated in mid-March, when Under Armor began producing face masks and provided millions of personal protective equipment (PPE) to medical and community organizations.
It was then that the founder of the company, Kevin Plank, realized the need to create a special mask for athletes. Experience in the production of protective masks made it possible to find a new solution in the shortest possible time. With the creation of UA SPORTSMASK, Under Armor applied for a patent for the design and construction of the mask.
“We focused primarily on selecting materials that would make training both safe and effective. The result was a combination of fabrics that created a structure that maximized breathability for the mask, ”said Kyle Blakely, Vice President of Innovation Under Armor .“We used our experience in creating protective masks both to speed up mass production and to work on product design. Throughout the entire process, speed of production and meticulous attention to quality and detail were paramount. After passing through rigorous testing, the 13th version of the mask was found to be successful. ”
The brand continues to care for the health and well-being of all athletes around the world who dream of returning to full training. UA SPORTSMASK has already gone on sale in the US at a price of $ 30, and the mask will appear in Russia in the coming months.It will be available for purchase on the LaModa website, in RunLab and StreetBeat stores.
Read also: Demand for masks in pharmacies decreased by 70%
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90,000 What technologies help athletes win
Spectacular sports cost billions and years of hard training are behind the records. But what if you can get better results with technology?
- The Nike Aeroswift kits are made from a combination of double and single jersey.The main features of the equipment are that it is 17% lighter and 50% more elastic than previous counterparts, so it is much easier and more comfortable to move in it. The moisture wicking system is distributed throughout the fabric, so the mold wicks out sweat 44% better and dries 32% faster. It was first presented at the Olympic Games in Rio de Janeiro;
Aeroswift Equipment Review
- Under Armor’s Coldgear Infrared Outfit is made from proprietary materials that adapt to weather conditions and maintain optimal body temperature.On the inside, there is a layer of ceramic that allows you to warm up faster and keep you warm between warm-up and competition. In it, in particular, snowboarders from the USA and Canada perform. The company also has clothing for workouts in the hot sun made of fabric that cools the body and reduces perspiration;
- The Under Armor Mach49 skating uniform for US skaters was developed in conjunction with the LockheedMartin aircraft corporation.It is based on 3D models that capture the postures of athletes during the race. Then, on the basis of these models, fiberglass clothing is created and tested in a wind tunnel. This shape reduces air resistance and allows you to show better results;
- Spyder’s SpeedWyre slalom suit with narrow seams on the sleeves and legs is ergonomically designed to reduce wind resistance by 40%. It was in it that Picabo Street won first a silver medal at the 1994 Olympics in Lillehammer, and two years later – gold and bronze at the World Downhill Championships;
- Speedo’s LZR Racer Swimsuit designed with input from NASA. It is made of a special water-repellent fabric to help you move faster and more agile in the water. 79 of 105 world swimming record holders and 89% of medal winners of the 2008 Beijing Olympics performed in such suits;
- Running & Athletics IonX, designed at Loughborough University, UK using special fibers that have a negative magnetic field.By acting on the cardiovascular system, it helps athletes recover faster. The English football club Portsmouth, after buying the suits, won the FA Cup for the first time in 69 years in 2008.
- Nike was the first to use 3D printing technology to create custom shoes and boots. HyperAdapt technology, using a system of sensors, provides an ideal fixation of the shoe when lacing and adjusts to the peculiarities of its owner’s movements;
- The Nike Vaporfly Alphas is legendary for runner Eliud Kipchoge, who helped him win the marathon in 2019.In the same year, Bridget Cosgey set a record among women in them. The shoe features a super-lightweight ZoomX foam sole with a carbon fiber plate for extra firmness and a 4% faster run than other shoes;
Wall Street Journal – Nike Vaporfly Sneakers
- However, later, the Athletic Association banned their use.Then Nike modified the Vaporfly and Alphafly series (analogue for the mass market) so that they did not have any complaints. In particular, the thickness of the sole will be reduced from 31 and 36 to 30 mm according to the requirements of the association. The Nike Anti-Clog Traction System is made from adaptive polymers to help keep moisture out of the outsole to help keep dirt out. Special Nike Flyknit fabric provides flexibility and support in any position and promotes air circulation;
- Adidas BOOST technology in the ULTRA BOOST sneakers adapts to the individual characteristics of runners, supports the foot and provides comfort during long runs;
- Under Armor’s Project Rock sneakers are designed with innovative technologies from UA TriBase and UA HOVR.The first provides maximum flexibility for the best footprint when running. The second is responsible for cushioning and elasticity for comfort and support of the foot, even in mountainous conditions;
- Sneakers from the Japanese brand Furoshiki literally wrap around the foot. They are based on an Italian Vibram outsole with membrane ribbed sides that perfectly fix the foot.They are suitable for running, basketball, trekking, and mountaineering;
- Sports brands do not only care about comfort, but also about the environment.So, specifically for the US team at the Olympic Games in Tokyo, Nike manufactured the Vapormax sneakers, which are 75% industrial waste and are themselves recyclable;
Nike Vapormax Trainers
- Adidas uses Nodye and DryDye technologies that use 50% less water and energy, reducing CO emissions 2 .The company also uses ultra-lightweight, non-toxic materials that also reduce environmental impact, such as the biodegradable Parley Ocean Plastic.
Accessories and protection
- Under Armor’s UA SPORTSMASK is a reusable mask for athletes returning to training during a pandemic. It is designed for sports activities in public places and performances where the rules provide for the wearing of protective equipment. The mask has a waterproof base that wicks away sweat and prevents the spread of respiratory droplets;
Facebook post of user watch
- Three-layer fabric consists of a top layer with air pockets, a foam layer for air circulation and an inner ISO-CHILL cooling layer with PROTX2 antimicrobial coating.The upper part takes the shape of the bridge of the nose, fitting as tightly as possible and not letting the glasses fog up;
- The SnowVision Heavy Duty Snow Goggles with photochromic lenses adapt to the light. They change the degree of dimming depending on the intensity of sunlight and correct vision like ordinary glasses;
- Spine protector Adamsfour provides support with X-shaped straps. They contract when the body rotates and set in motion a reversing mechanism at the waist, which protects against dislocations and sprains. Layered nylon fibers distribute force evenly around the tread, while the rubber coating provides maximum traction and resilience;
- SevenTwenty Helmet with patented elastomer hexagonal core cushions shock 50% better than most competitors;
Facebook post of user watch
- Protective Skating Suit Samsung’s SmartSuit with built-in motion sensors reacts to body position and absorbs impact in the event of a fall.Thanks to him, Matthias Meyer avoided serious injury at the 2015 World Championships;
- Training Mask Aduro simulates thin mountain air for those preparing for ultra trails and mountain marathons. This allows you to strengthen the diaphragm so that the athlete has enough breathing even at maximum exertion. The mask has an anatomically adjustable shape and a valve with 4 levels of difficulty.
Equipment and equipment
- The Snowfoot Climbing Snowshoe consists of a shock-resistant TPE nylon outsole with a grid pattern and steel studs. It attaches to your boots and provides light traction and stability on slopes – including ice and sleet;
- Snowfeet – shortened skis without poles, which are no larger than the sole in size.They are made of durable fiberglass-reinforced plastic. Braking is carried out by the side metal edges and the heel of the sole. The creators hope that skiing will become the basis for a new sport – something between skiing and skating;
- Bobsled sled Bo-Dyn Bobsled Project helped Americans win their first gold medal at the 2002 Olympics in half a century – thanks to the special ergonomics of a racing car;
- Curling brushes , which heats the ice to a record 3 degrees (from a typical 1.2), helped the Canadian men’s and women’s teams win gold and silver medals at the 2010 Vancouver Olympics.
- The Wilson basketball ball is equipped with a sensor that reads throw range, ball speed, acceleration and passed passes.Inside there is a battery that is enough for 200 thousand shots. All data from the ball are displayed in a mobile application that keeps statistics and analyzes the player’s tactics;
- Ski suits RECCO have an avalanche rescue system. A sensor and special reflectors are built into the clothes: they help to accurately determine the location of the athlete;
- Smart Skis Elan uses sensors to track the glide dynamics of biathletes, skiers and slalomists.This information is useful for both the athletes themselves and their coaches;
- Kit Snowcookie includes 3 sensors that attach to the skis and slalom skis. The system based on artificial intelligence controls all the most important characteristics and transmits to the smartphone. It can be used to easily detect errors in the position of the torso, excessive rotation of the shoulders when turning or movement of the hips when entering a turn;
- American hurdler Lolo Jones uses a special system of cameras and sensors during training, developed in conjunction with the Red Bull Project X.With the help of 3D motion capture, high-speed cameras and rendering, the athlete receives all the necessary data to practice tactics before the competition;
- The Recon Jet smart glasses for skiers, snowboarders and cyclists are equipped with all-weather processors, memory, HD cameras and wireless interfaces. During skiing, one of the cameras monitors the track, the other follows the athlete’s eyes.So the system helps to focus on difficult areas, without missing turns and obstacles;
- Sports headphones UA-JBL created by UnderArmour in cooperation with the German brand of audio equipment JBL. They measure heart rate and other important indicators during training and communicate them by voice;
- Adidas’ miCoach Smart Ball Smart Balls train footballers to practice kicks.”Smart” dumbbells C-Ring Dumbbells change the backlight depending on the load and the number of calories burned;
- Under Armor’s MapMyFitness app syncs with fitness trackers and other wearable gadgets. It reads vital signs and creates personalized recommendations for stress and training;
- The HOVR Connected Sports Shoes are equipped with a proprietary GPS navigation system to track distance and speed while you run.Data Record Sensor technology records and analyzes heart rate and other critical indicators;
- Reebok manufactures helmets and gloves that measure impact force and compare it to the maximum permissible for the sport.
Technology – New Doping?
There is still no unequivocal opinion in the sports community on this matter.For example, sports technologist Bryce Dyer believes that for runners, Nike sneakers, with all their innovations, are like a pistol in a knife fight. Former marathon runner Mara Yamauchi agrees: in big sport, everyone should have absolutely equal opportunities. The same opinion is held by the Association of Athletes.
Kim Blair, president of the Sports Engineering Association, disagrees. He believes that innovation is an integral part of modern sports, like any other area of our life.Runner Eliud Kipchoge is convinced that it was hard training, not Nike sneakers, that led him to victory.
However, WADA and sports federations are increasingly talking about “technological doping”. It means any device, gadgets and equipment features that help an athlete to improve their performance. But what should be considered as such?
There are various examples of such violations. So, at the 1976 Olympics in Montreal, Soviet pentathlete Boris Onishchenko used a special sword during fencing.There was a button in it that lit a light on the scoreboard, fixing each injection. Then Onishchenko was disqualified along with the entire team.
In January 2016, Belgian cyclist Femke van den Driesche was convicted of using an electric motor to turn the rear wheel. The result was a fine and 6-year disqualification.
It looks like a similar bike with an electric motor
But there are also less obvious cases.For example, the 1970s British cyclist Graham Aubrey banned bicycles with extended horizontal handlebars. Or the recent bans on the LZR Racer tracksuit, SpeedWyre slalom suit and Nike Alphafly trainers, which allowed for more speed.
Graham Audrey’s bike
Can you use gadgets while exercising? Is equipment that protects against heat and cold considered doping? What if it adapts to different conditions and makes the athlete’s breathing easier? So far, the line between convenient equipment or equipment and technological doping is not completely clear.
90,000 Mistakes, Resignations and Strip Clubs: Why Under Armor Founder Steps Down as CEO
In 2012, Under Armor sportswear brand CEO Kevin Plank believed he had a bright future.The company he founded in the 1990s has finally become a serious rival to the sports giant Nike. Under Armor has signed sponsorship deals with internationally renowned athletes including Olympic alpine skiing champion Lindsay Vonn, New England Patriots quarterback Tom Brady and the most decorated swimmer in Olympic history, Michael Phelps. “We are the sportswear brand of this and the next generation,” Planck said during a conference call with investors in January 2012.
Over the next few years, Planck’s words remained relevant. The company has signed contracts with other stars such as Golden State Warriors basketball player Stephen Curry and ballerina Misty Copeland. In September 2015, Under Armor’s share price reached an all-time high of $ 104.1 per share.
40 most valuable brands in sports – 2019. Forbes rating
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For several years, Under Armor’s annual revenue has grown by 20%.But in 2017, the pace dropped sharply – income growth became unambiguous. In April 2017, the company reported its first quarterly loss. She continues to experience financial difficulties ever since. In three years (as of October 21, 2019), the sports brand’s share price has dropped by 44%.
So the news that founder Kevin Planck is stepping down as CEO of Under Armor after more than 20 years in that position is perhaps not surprising. However, Planck does not part with the Baltimore company altogether – he will remain the chairman of its board of directors and brand manager.”Given that he owns 65% to 70% of the voting shares, he will still continue to control the development strategy of Under Armor,” said Rick Patel, an analyst with investment firm Needham & Company. Plank owns 16% of the sports brand. Forbes estimates his fortune at $ 1.9 billion.
Since 2017, Planck has tried to do everything possible to improve the company’s financial position. He worked with his team to restructure Under Armor and spent over $ 300 million on various reforms.However, the measures taken by him have not yet helped. In 2017, the sports brand’s revenues grew by only 3% to $ 5 billion. In 2018, training increased by only 4%, despite the company’s attempts to enter foreign markets. According to Under Armor, over the past two years, its staff has decreased by 680 people.
In the 90s, Kevin Planck played on the University of Maryland’s college football team. It was then that he came up with the idea to create a lightweight sweat-wicking sports T-shirt.T-shirts soaked with sweat became heavier, which negatively affected the game, Planck explained in an interview with Forbes in 2012. He opted for a lightweight fabric that was used to create women’s underwear, and on its basis he created a unique material that quickly absorbs moisture. Planck started his business in his grandmother’s garage. He founded Under Armor in 1996 and had its IPO in 2005. Under Planck’s leadership, the sports brand’s sales increased from $ 20 million in 2001 to $ 5.2 billion in 2018.
Planck’s energetic speeches energized Under Armor. “People were ready to go out of their way for the sake of the company and the achievement of the set goals. They really believed they were creating innovative sportswear, ”recalls one former sports brand executive, who did not want to be named. Planck signed Under Armor’s annual financial statements with the words “Stay humble. Stay hungry “(Stay humble. Stay hungry). Conference calls on the brand’s financial performance have encouraged investors.
In 2015, Under Armor decided to expand and not focus on sportswear alone. Under Armor has spent at least $ 710 million acquiring a number of companies such as the online calorie counter MyFitnessPal. In September 2015, Under Armor was worth $ 96.59, and Planck’s fortune was estimated at $ 3.9 billion. However, the brand, like many multi-billion dollar companies in this ever-changing industry, soon ran into difficulties. Since 2016, Under Armor has started losing market share to competitors such as Nike and Adidas.Part of the reason for this was the company’s failure to focus on casual sportswear, which has become a key driver of the growth of its competitors.
In January 2016, Forbes reported that Morgan Stanley had lowered its target price for Under Armor shares from $ 103 to $ 62. Investment bank analysts drew attention to the fact that growth rates began to slow back in the spring of 2015. This is evidenced by the documents on the claim of the shareholders of the sports brand, filed in September 2018.During a conference call in April 2016, Planck tried to convince investors and analysts that the company will continue to grow. “We expect the company’s revenues to exceed $ 1 billion in each quarter of this year. The updated projections indicate that revenues for the year should be $ 5 billion, which can be called an important milestone for our brand,” he said. However, this was not destined to come true. In 2016, the company’s sales amounted to $ 4.8 billion. In the same year, Under Armor left the director of merchandising and director of digital transformation.
How Nike overtook SpaceX, Intel and Dell in innovation
These weren’t the last top executives to leave the company. On January 31, 2017, CFO Chip Molloy, after working at Under Armor for 13 months, resigned “for personal reasons.” On that day, the value of the company’s shares fell 23%. A few months later, Under Armor reported that it faced a net loss for the first time since its IPO in the first quarter of 2017. In the summer of that year, the sports brand announced a $ 130 million restructuring.In August 2017, the company’s staff was reduced by 2% (280 people), and then by 3% in 2018 (400 people).
According to one of the former employees of the company, immediately after the first wave of layoffs, Planck gathered top managers for a meeting. The morale of Under Armor employees has fallen not only because of the mass layoffs. Earlier, in 2017, Planck said in an interview with CNBC that he supported the policies of President Donald Trump, which disappointed some employees (Planck had to issue a statement clarifying his statements.) Plank also paid great attention to his personal projects: his family’s investment company Plank Industries was developing more than 950,000 square meters. m of land in Baltimore’s Port Covington area as part of a $ 5.5 billion project. In early 2017, he also opened a whiskey distillery and a luxury hotel in Baltimore. In a meeting with top managers, Planck admitted that he had taken on too many projects at the same time. But he assured everyone that from now on he would focus 100% on Under Armor. According to a former company employee, after the meeting, one of the top managers thanked Planck for his sensitive leadership.
But then the sportswear brand faced new challenges. In 2017, three shareholders of the company filed lawsuits. They argued that Planck and other company executives misled them about the financial situation of Under Armor (the claims were merged into one proceeding and dismissed in July 2019, but the appeal filed by the plaintiffs is still pending). Then in November 2018, The Wall Street Journal published an article in which the top management of the company was accused of sexism and unprofessionalism.In the article, in particular, it was said that the leaders of Under Armor spend the company’s money on trips to strip clubs. Planck himself told reporters: “All of our team members deserve to be treated with respect in the workplace and rewarded for their success. We believe that there are inequalities in the workplace in the world. We will seize this moment to accelerate a meaningful cultural transformation at Under Armor. We can get better and we will do it. ”
For several months in late 2018 and early 2019, Forbes spoke with a dozen former Under Armor employees.The majority of those interviewed were women and minorities. They described the work environment at the company, which employs 15,000 people, as a “men’s club”. “There was training, poker, and booze. Top managers believed that if an employee stays late, she might go somewhere with one of them, ”recalls a former employee of the company, who agreed to speak on condition of anonymity. Representatives for Under Armor declined to comment on her remarks.
Perhaps in response to allegations of sexism in January, Under Armor appointed former Harley Davidson HR manager Chernavia Rocker as director of human resources and corporate culture. Rocker is currently the only female senior executive in the company. In September, the brand’s management appointed Stephanie Pugliese, former president and CEO of workwear and accessories manufacturer Duluth Trading Company, to head its North American division.“Our vice presidents and senior managers are considered senior executives. The share of women in leadership positions is 26%, ”a company spokesman said in response to a request from Forbes. The number of women in leadership positions at Under Armor has always been low and remains so. Nonetheless, 49% of the company’s employees are women. Until 2012, there were no women on the sports brand’s board of directors. The ten-member board of directors currently has two women.
“They are all one bald man,” said one former company employee, criticizing the gender composition of Under Armor’s leadership. “If there was a strong woman in the company’s management, we would breathe a sigh of relief,” said another former employee. One of his former colleagues added: “At the meetings, I was one of two girls in a group of 12.” “Under Armor continues to place a strong emphasis on gender diversity among corporate executives. We have female senior executives who are in charge of manufacturing, design, logistics, legal, personnel, communications, marketing, digital transformation and retail, ”a company spokesman said in a statement to Forbes.
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Last year, Under Armor’s revenues grew 4% to $ 5.2 billion, largely as the brand entered markets in Asia and Latin America. But the restructuring came at a cost to the brand: Under Armor reported a net loss of $ 46 million for the year. Excluding restructuring costs, the company’s profit would have amounted to $ 122 million. Financial indicators for 2019 are still ambiguous. In the first quarter, Under Armor had net income of $ 22 million, but the company lost $ 17 million in the second quarter.According to Wall Street analysts, in 2019 Under Armor’s revenues will amount to $ 5.39 billion.According to analysts of the investment bank Macquariye, the brand’s net profit for the year will amount to $ 122 million.
Despite the company’s financial difficulties, investors welcomed the news that Plank will be stepping down as CEO of the company on January 1, 2020, and will be succeeded by Under Armor COO Patrick Frisk.On October 22, the day the news was published, the value of Under Armor shares rose by almost 7%. The next day, shares fell by just over 2%.
“I’m sure this is just the beginning,” said Kevin Planck after announcing his retirement as CEO.
“This should have been done for a long time. Nonetheless, Planck will remain Under Armor’s chairman and brand manager. He’s not going anywhere. But in the end, this is good news and a huge step in the right direction, ”said Brian McGough, head of retail analytics at Connecticut-based market research firm Hedgeye Risk Management.
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Translated by Polina Shenoeva
Robotization instead of globalization
Cheap labor is no longer interesting to anyone – outsourcing is being replaced by reshoring: international concerns are returning production to Europe and the USA. Developing countries are losing thousands of jobs, and in developed countries, enterprises are opening up where robots are working.
ALEXANDER ZOTIN, Senior Researcher, All-Russian Academy of Foreign Trade
In 1960, the pillars of American industry – General Motors, Ford Motors and General Electric – were the largest employers in the country: 595 thousand., 260 thousand and 261 thousand jobs, respectively. Today, the state of the largest US technology company – Apple, whose capitalization is greater than all three previous ones combined, employs only 80 thousand people, while the workforce of its foreign contractors, producing almost all i-goods, is about 700 thousand people …
Nine years ago, President Obama asked Steve Jobs why not make the iPhone in the US? Jobs responded that lost American jobs will never come back.In a way, he was right, and in another, apparently, he was not.
Economic globalization, the fruits of which the world elites have enjoyed over the past 20 years, was largely due to the elimination of trade barriers (China’s entry into the WTO at the beginning of the century) and the influence of new information technologies. The computer revolution and the Internet have led to information transparency necessary for building ultra-complex supply chains of the international production and trade system, allowing you to track and control all stages of production and transportation of goods, wherever they occur in the world.
The Earth has become “flat”, as the famous apologist for globalization, sociologist Thomas Friedman, put it. This means that the distance between raw materials, production, goods and their final consumers is not so significant, not geographical, but purely economic factors, for example, the relative cost of labor and the exchange rates of national currencies, are much more important.
Of course, in reality there has never been any “flat” world according to Friedman; at best, we have observed a process of semiglobalization, as the economist Pankai Gemavat puts it.
That is, a process in which globalization was partially offset by neutral or even counter-directional trends.
For example, a high degree of freedom of movement of capital and goods does not coincide with the freedom of movement of labor from country to country (obtaining a work visa in some states is often almost as difficult as it was 20 years ago).
On the other hand, capital easily moved in search of this cheapest labor force, transferring enterprises from “expensive” countries to “cheap” ones.However, even this globalization process has recently fizzled out and, perhaps, is completely unfolding. Will semi-globalization be replaced by deglobalization?
To home shores
According to the American NGO Reshoring Initiative, the era of outsourcing manufacturing from the United States (and from other developed countries) to jurisdictions with cheap labor is coming to an end.
The same process is documented in other studies, such as “Homeward bound: nearshoring continues, labor becomes a limiting factor, and automation takes root” by AlixPartners, as well as MGI’s latest November report, “Making it in America: Revitalizing US manufacturing.”
The decline in employment in the last 30-40 years in the manufacturing sector is not a unique process. It declined due to automation and outsourcing, not only in the United States, but in almost all industrialized countries. Only Germany has managed to stabilize this process in the past 20 years.
Why is this happening? Subsidies and tax preferences from the US authorities (most often at the state level), the expectation of a reduction in corporate taxes as a result of tax reform, and an increase in wages in some traditional outsourcing countries, primarily in China, are important factors in reshoring.
In terms of industry, Reshoring is most popular where new US manufacturing has significant competitive advantages.
First, it is the production of goods with a high weight-to-value ratio (cars, heavy and bulky household appliances). For such goods, the absence of costs for sea transportation is most important.
Secondly, production that implies high-precision logistics in time (production with a short cycle, just-in-time) or subject to frequent changes in consumer demand and / or design (primarily auto parts and auto parts).
Third, there are various plastics and refined products. Here reshoring is explained by the boom in shale oil and gas production in the United States. Various plastics are made from methane, ethane, propane, butane, isobutane, pentane.
Fourthly, production in which a high level of management control is required to comply with quality standards (for example, medical equipment).
Fifth, production aimed at customers who are limited in their ability to buy goods not made in the USA (for example, the military-industrial complex).
Sixth, the production of goods for which the observance and protection of copyright and patents is extremely important.
reshoring occurs in industries most sensitive to automation and robotization technologies. First of all, this is the production of textiles and clothing, household electrical appliances, cars and auto parts.
It is the last factor, automation and robotization of production, that brings resoring to a new level of international trend in all industrial production.Moreover, not only in the United States, but also in other developed countries, primarily in Europe (where the factor of cheap energy is not yet relevant).
Brand versus thing
But so far Steve Jobs was right in his answer to Obama. In some cases, it is not necessary to wait for the early return of jobs to the United States.
The structure of value added in the iPhone 3G during Jobs’s lifetime was as follows: with a retail price of $ 500, the total cost of production was $ 178.96, of which the Chinese assembly accounted for $ 6.5, or about 3.6% of the cost of production, for components from Japan. accounted for $ 49.25 (33.9%), Korea $ 22.96 (12.8%), Germany $ 30.15 (16.8%), the United States – $ 10.75 (6.0%), the rest of the world – $ 48 ( 26.8%).
Apple’s added value ended up being $ 321.4 per iPhone 3G, about 64% of retail price (data from Xing, Y. and N. Detert, 2010. “How the iPhone widens the US trade deficit with the PRC”, ADBI working paper No. 257).
In fact, even under Jobs, Apple turned into a company selling its own luxury brand, and outsourcing all production and even partly R&D activities.
Now that the company is headed by Tim Cook, former Apple vice president of supply chain management, this trend remains unshakable: with the cost of manufacturing the iPhone X at $ 370.25 (bill of materials, data from IHS Markit), the retail price of the iPhone X is $ 999.The same 63% of Apple’s markup for labor (primarily for retention of brand value).
The assembly price in China is still unknown, but, most likely, these are the same pennies as in previous models, and the same pennies in relation to the price and weight of the goods for transportation.
So Obama’s rhetorical question to Jobs was largely meaningless: the assembly’s share in the price is too low to be given special attention. Tax aspects are much more important. And a host of other industry-specific circumstances.If reshoring will happen in the electronics industry, it will probably be the last thing.
Robotization (and this is the main driver of resoring – no one is going to replace cheap Chinese workers with expensive American ones in the same proportion) in the sector is hampered by the short production cycle of some goods, often no more than a season. For example, the same smartphones and tablets. So far, robots are losing to people in the plasticity of the production of goods with a short life cycle.
Considering the super-developed industrial infrastructure, China, apparently, will remain a priority platform for the production of electronics for many years to come, especially with a low weight-to-cost ratio (smartphones, tablets, laptops, semiconductors, microchips, etc.).NS.).
For small and expensive goods, distance (and cost of transportation) really does not matter much, for them the world is really “flat”.
However, in the summer of 2017, the Taiwanese Foxconn (just a contractor to Apple, Intel, Microsoft, etc.) announced plans to invest $ 10 billion in a factory for the production of LCD panels 100 km from Chicago. Despite the huge volume of announced investments, it is expected to create only 3 thousand jobs, since almost all production will be robotized.So, perhaps, contrary to all forecasts, reshoring may eventually affect Apple products.
But the production of cars and auto parts (A&A) is returning to its native shores right now. Analysts at the International Labor Organization (ILO) note that this sector has significant prospects in both robotization and resoring.
Robotics / automation in the sector actually dates back to the launch of the first Henry Ford assembly line in 1913 and is now the industry leader in the use of industrial robots.
Automation has boosted production of auto plants in the United States by 53% over the past 20 years, while employment has declined by 28%. Technology is constantly improving, and manual labor continues to drop out of the industry.
From the point of view of resoring, the auto industry is also promising, since, unlike electronics, its products are characterized by a large ratio of weight and / or volume to cost (transport and logistics costs are relatively high).
From recent examples – Volvo is investing $ 1 billion in the construction of a plant in Charleston (USA, South Carolina), capacity – 150 thousand.cars per year, labor force – 3.9 thousand people.
Auto parts manufacturer Denso invests $ 1 billion in the construction of a plant in Tennessee, workforce – 1,000 people. Mercedes-Benz is investing $ 1 billion in the construction of a plant in Tuscaloosa, Alabama, with a workforce of 600 people. Investments of less than a billion dollars in recent months have been estimated in the industry in the tens.
In the A&A industry, over the past 30–40 years, outsourcing has often taken the form of nearshoring, the transfer of production to developing countries geographically close to sales markets.
For example, to Mexico for the US market or to Turkey and Eastern Europe for the Western European market (a vivid example is the creation of an auto cluster in Slovakia).
The largest example of nearshoring is Mexico. In 1994 (before the entry into force of NAFTA – the agreement on duty-free trade of the United States, Mexico and Canada), Mexico’s deficit in trade with the United States was $ 1.3 billion.By 2016, it changed to a surplus of $ 63 billion.
The growth was driven by electronics, telecommunications technology and, to a large extent, automobiles.In 2016, 3.6 million cars were produced in Mexico (7th in the world) against 1.9 million in 2000 (9th in the world). 2.7 million of these are exported (the lion’s share, 2.1 million, to the US), making Mexico the fourth largest car exporter in the world.
In 2016, Mexico exported $ 46 billion worth of auto parts to the United States and $ 49.3 billion worth of cars, the corresponding imports from the United States to Mexico amounted to $ 19.8 billion and $ 4 billion, Mexico’s total surplus in auto trade with the United States was $ 71.5 billion.
State-of-the-art manufacturing facilities in Mexico are robotic and require less labor to produce.For example, the Kia Pesqueria auto plant (an investment of $ 1 billion), built in just 13 months in 2016 near Monterrey (Nuevo Leon), created 3 thousand jobs. At the same time, the production capacity of the plant is 300 thousand vehicles per year.
In total, auto plants in Mexico employ about 50 thousand people (and much more, about 600 thousand, in the production of auto components). For comparison: at one Togliatti plant of AvtoVAZ in 2016, 40 thousand people worked with a production volume of 172 thousand.machines per year (data from OICA, 2016).
However, despite all the successes, some companies operating in the largest industrial clusters of Mexico on the border with the United States will fire their skis, that is, they declare their intention to transfer and / or develop new facilities in the United States.
For example, in the Reynosa / McAllen cluster (Mexican Tamaulipas / American Texas), four large companies with production on the Mexican side of the cluster have announced their intention to transfer and / or initiate production on the American side.Among the advantages of the location of production in the United States, they highlight robotization and subsidies (up to $ 10 thousand for a workplace in the United States, provided by state authorities, in this case Texas).
To date, the most significant example of reshoring instead of nearshoring is the refusal by the automaker Ford of its previously approved $ 1.6 billion investment in the construction of a new plant in San Luis Potosi (Mexico) and the relocation of the planned plant to Michigan with an investment of $ 700 million and the creation of 700 work places.
Invasion of robots
Robotics and resoring are threatened by the largest employment sector in many poor countries – textiles, apparel and footwear.
As noted in the ILO report “ASEAN in transformation: Textiles, clothing and footwear – Refashioning the future”, the textile industry in its modern form does not have long to live. Jobs in it will be reduced, and industrial enterprises will move from developing countries with not particularly needed cheap labor back to developed countries, closer to sales markets.
The ILO estimates that the introduction of automation in the textile industry could free up to 86% of its employment in Vietnam and up to 88% in Cambodia.
Losses will also occur in Indonesia, Bangladesh, Myanmar and other ASEAN countries, as well as beyond its borders, primarily in India and China.
The perspectives of robotization and resoring in the ILO are described as follows: “The configuration of the garment manufacturing industry may be changed due to the introduction of sewbots. In 2015, Softwear Automation released LOWRY, a robot equipped with machine vision and automated tissue manipulation technologies.Technologies make it possible to achieve what seemed previously impossible: robotic seamstresses automate the most complex and time-consuming processes in the production of clothing.
If the total cost of using a robotic seamstress is less than outsourced manufacturing, including direct savings from shipping, customs duties, and reduced reputational risk, reserving a garment production somewhere in California may be more attractive than outsourcing to Vietnam.
Given the added benefits of robotic sewing, which include reduced rejects allowed by people, higher production safety, and consistent product quality, industry insiders believe that robotic seamstresses will be able to leave industry workers in countries where labor is cheap. ”
An example of reshoring is the Chinese company Tianyuan Garments Company (working for the brands Adidas, Reebok and Armani), which is currently building a factory equipped with sewbots in the US Little Rock, Arkansas. The plant, which is slated to open in 2018, will produce about 23 million T-shirts a year with only 400 employees (instead of the thousands of workers needed to produce that many T-shirts in an ordinary modern factory).
Robotization makes US manufacturing competitive with the cheapest manual labor. The cost of manual labor for the production of one T-shirt in the new robotic factory will be $ 0.33 per piece.
At the same time, in one of the poorest ASEAN countries, Bangladesh (about 80% of exports are textiles and clothing), the cost of manual labor, according to the Institute for Global Labor and Human Rights, was about $ 0.22 per T-shirt in 2013. In the United States, for the same manual labor previously had to pay $ 7.5 apiece.
Until recently, the manufacture of clothing lagged behind the automation processes in the automotive and electronics industries, since manual labor in the industry often required very fine and precise motor skills. However, new technologies successfully cope with the problem.
“Manufacturing a blouse with a breast pocket requires 78 separate operations,” says Palaniswami Rajan, CEO of Softwear Automation.
The transformation in the footwear industry is going even faster, since manual motor skills are more primitive there, therefore, robotization will go faster.
An example of Reshoring is the new Adidas Speedfactory recently opened in Ansbach, Germany. The robotic enterprise employs only 160 people, while the volume of production will amount to 500 thousand pairs of shoes per year.
Taking this new factory as a benchmark in the industry, it could cut employment by over 90% (96,000 workers would be enough to produce 300 million pairs of shoes a year, for which Adidas currently employs about 1 million workers. mainly in the SEA region).
In addition to robotization, Adidas will partner with California-based startup Carbon to introduce 3D printing technologies at Speedfactory. The current production of 3D soles is relatively expensive and slow.
Now it takes an hour and a half to print one sole, but Adidas and Carbon plan to reduce the printing time to 20 minutes already this year.
Among the advantages of the new technology is the absence of economies of scale, which are available in traditional production. So, to pay off, molds for casting plastic soles must be used at least 10 thousand.once. Consequently, making small batches and customized shoes was extremely expensive.
3D printing allows you to bypass this limitation and produce at least one pair of customized orthopedic shoes.
Other athletic shoe manufacturers Nike, Reebok, Under Armor and New Balance are also planning to start 3D printing.
Adidas is now building a similar factory in the USA in Atlanta, which again fits into the reshoring trend.
End of catch-up development?
There are still fewer statistics on the reshoring of production to Europe than in the case of the United States, but many indirect indicators (a decrease in the growth rate of world trade in physical volumes in relation to the growth rate of global GDP in recent years, a reduction in value chains, premature de-industrialization of many developing countries, company-specific data) suggests that the reshoring process has become global.
Investors’ preferences are scrapped.As production becomes more capital-intensive and less labor-intensive, outsourcing to countries with cheap labor is becoming less profitable, and the factor of proximity to sales markets is becoming more important.
For rich countries, Reshoring will mean an industrial renaissance and additional job creation, albeit not very large: the main point of Reshoring is to save money on labor costs through intensive automation / robotization.
For developing countries, reshoring / robotization means the elimination / non-creation of new jobs, and on a much larger scale.The American Reshoring Initiative does not count the number of liquidated or not created jobs in other, primarily developing countries, for each job created in the United States. But the example of the same Speedfactory Adidas shows that the ratio can go up to 10: 1.
Thus, for developing countries, reshoring is a disruption of the classical model of growth and catch-up development, based on the industrialization of the economy and the flow of jobs from low-productivity sectors to a high-productivity and export-oriented industrial sector.