Over the weekend reports emerged that Nike is considering abandoning its high-profile FuelBand fitness product. Nike has since confirmed a small number of layoffs in its digital sports division but denied a full FuelBand shutdown.

The company said that as its digital sport priorities evolve, it expects to make changes within the team.

Despite being a behemoth in its own right, Nike may be feeling the breath of the tech giants on the back of its neck. The market for wearable technology is heating up, with Google and Apple both expected to make big moves in the space in the coming months.

Samsung has already launched its Gear Fit wristband along two new Gear smartwatches, while Google recently unveiled its new Android Wear operating system for smartwatches and other wearable devices. Apple is expected to launch its iWatch in the third quarter of this year.

Wearables such as the FuelBand are also facing competition from smartphones.

The Samsung Galazy S5, for example, includes fitness sensors that replicate some of the functionality of dedicated wristbands. As with MP3 players and GPS devices, which have been subsumed into smartphones, the same could be happening for fitness bands, driving down demand for standalone products.

If, as reported, Nike is focusing its efforts on software rather than hardware, this will allow it to stay in the game, while avoiding competition from the slew of new devices expected to be unveiled this year.

However, Nike may choose to team up with Apple when the tech giant takes the plunge toward wearables. Media giants and car firms have learnt that taking on big tech companies doesn’t work. It is better to work with them than against them.

Nike already has a close relationship with Apple (Apple chief executive Tim Cook sits on Nike's board) and the two companies have worked together previously, so Nike might just become a software provider for Apple's wearables.