Apple Floated as Potential Buyer of Peloton

[jeffu]

Many many many of the commenters have never actually used a Peloton or done any of their classes. I purchased a bike at the start of the pandemic and at this point I can't imagine not having one. I'm in the best shape I've been in my life - I've belonged to various gyms for years and never worked out this much.

As to the bike - it really is a game changer - the whole package comes together with their bike, the metrics, the classes, the leaderboard - and on the Bike+ when the instructor calls out changes in resistance, it automatically changes to match - very immersive experience. You simply don't get the same with an iPad and an App. I tried Apple Fitness, the instructors are good, but still not nearly on par with the Peloton team - and it's just different when integrated.

Apple fanboys should totally understand this - it's what's made Apple a premium product for years, the integration of software and hardware. Someone earlier mentioned saying you can just use any bike and an iPad is like saying you can just use a PC for a computer - EXACTLY.

Honestly - I don't think they are going anywhere - they simply got ahead of themselves trying to gauge the pandemic inventory. They've brought in a consulting firm to sort out their costs - they need to transition from "start up" mode to run a business mode. Even before the pandemic blew up their numbers, they had a very strong base - if they go back to that they still have a solid company.

 

[backontwo]

The iPed.

 

[Alan Wynn]

Many many many of the commenters have never actually used a Peloton or done any of their classes.

I used the Peloton Digital app every day for a month. I have not used their Bike, Bike+, Tread or Tread+. I do not have any exercise bike or treadmill, so I am not really comparing those features.

I purchased a bike at the start of the pandemic and at this point I can't imagine not having one. I'm in the best shape I've been in my life - I've belonged to various gyms for years and never worked out this much.

That is great. As Neil Cybart has said, Peloton’s problem is that they need a lot more of you. While the Bike/Bike+ and Tread/Tread+ might be somewhat more sticky for user retention, Peloton Digital is much more expensive than Fitness+, and not as well integrated.

As to the bike - it really is a game changer - the whole package comes together with their bike, the metrics, the classes, the leaderboard - and on the Bike+ when the instructor calls out changes in resistance, it automatically changes to match - very immersive experience.

Yup, that extra $1,000 for that automatic resistance does make much more integrated than an iPhone/iPad/AppleTV and a generic bike, rower or treadmill. However, given that only 25% of their users are picking the more expensive product, it is not clear that most people care. Having used Wahoo’s trainers with an AppleTV and various apps, I can say that big screen with climbing, auto resistance and fans, does make a nice experience. I think Apple is more likely to integrate with other bikes, rowers and treadmills before Peloton will, providing a much larger market opportunity.

You simply don't get the same with an iPad and an App. I tried Apple Fitness, the instructors are good, but still not nearly on par with the Peloton team - and it's just different when integrated.

I can only compare the Fitness+ experience to the Peloton Digital one, and my response was the opposite of yours. The production values, three trainer model and trainers that Apple has all seem better to me than what Peloton offered in the comparable workouts I did. Since I do not have a bike or tread, I cannot compare that, but I did find Fitness+’s Apple Watch integration and the Apple TV app much better than Peloton’s.

Apple fanboys should totally understand this - it's what's made Apple a premium product for years, the integration of software and hardware. Someone earlier mentioned saying you can just use any bike and an iPad is like saying you can just use a PC for a computer - EXACTLY.

I am sure that the integration on the Bike+ is nice, it is just more than I want to spend and would take more space than I can make available right now. Given their current sales split, 3/4 of their new customers do not think the extra integration is worth it.

Honestly - I don't think they are going anywhere - they simply got ahead of themselves trying to gauge the pandemic inventory. They've brought in a consulting firm to sort out their costs - they need to transition from "start up" mode to run a business mode. Even before the pandemic blew up their numbers, they had a very strong base - if they go back to that they still have a solid company.

Bringing in a consulting firm to fix your company is rarely a good sign. I guess we will have to see if they can get their churn rate down, and can grow their digital base over the next year.

 

[ipponrg]

Many people live in flats that do have not storage facility for bikes.

That is why people that live in flats hang on walls or use standing wall mounts. Tons of solutions here. The peloton bike itself takes up room, if not more than a real bike. Eventually for many when they are subscription fatigued, it becomes a clothes hanger.

It is very obvious to me you are too closed minded as to who you think the product would be aimed at and thus think it would fail.

Mate, it’s failing right now. Surplus of inventory is rarely a good sign for a growth business model.

 

[blainegunn]

Form my point of view this would be an excellent purchase for Apple. There will always be a market for stationary bikes and treads. Peloton has a very loyal following that should keep growing. Perhaps not at the same rate as it did in 2020/21 but it will grow. Apple will add value via Fitness App and Apple Watch etc. I'd like to see this happen.

 

[VideoFreek]

Bringing in a consulting firm to fix your company is rarely a good sign. I guess we will have to see if they can get their churn rate down, and can grow their digital base over the next year.

Especially when said consulting firm is McKinsey! Peloton reportedly more than doubled their employee headcount during their 2021 fiscal year (which ended June 30), and only implemented a hiring freeze last November after it became very apparent that the crap was hitting the fan. I'm sure McK will find plenty of fat to trim. Morale at Peloton will plummet, if it hasn't already.

 

[jdvoracek]

Following months of bleak news about Peloton's "precarious state," including the revelation that it has halted production of its bikes and treadmills, Apple is being floated as a potential buyer of Peloton's troubled fitness business.

Article Link: Apple Floated as Potential Buyer of Peloton

Another infomercial brought to you by Motley Fool and Inc.

 

[mi7chy]

First read this as Pegatron which is a manufacturing assembly house used by companies such as Apple which didn't make sense but Peloton makes even less sense since they have a reputation of unsafe products that swallow kids with lawsuits pending.

 

[Blowback]

Following months of bleak news about Peloton's "precarious state," including the revelation that it has halted production of its bikes and treadmills, Apple is being floated as a potential buyer of Peloton's troubled fitness business.

Yesterday, CNBC reported that Peloton will temporarily stop production of its connected fitness products due to a "significant reduction" in consumer demand, a pressing need to control costs, and amplified competitor activity. In a confidential company presentation earlier this month, Peloton told employees that products such as the Bike, Bike+, and Tread will be out of production for between six weeks and six months.

As a business, Peloton has high customer acquisition costs, translating to high product pricing. Toward the end of last year, the company reduced the price of its entry-level bike by almost 20 percent to $1,495 in an attempt to drive up sales through the end of 2021. It then emerged that the company is planning to lay off 41 percent of its sales and marketing staff.

CNBC also revealed that the company's fiscal forecasts do not take into account new delivery and setup fees between $250 and $350 that customers will have to pay on top of the cost of the Bike or Tread. In addition, Peloton has seen low email capture rates for its upcoming $495 strength training product, "Peloton Guide."

In a press release preannouncing its upcoming financial results yesterday, Peloton CEO John Foley said that the company is now "taking significant corrective actions to improve our profitability outlook and optimize our costs." Peloton's stock has since plunged 24 percent, now floating around 85 percent below where it was trading this time last year, and even $5 less than when it went public in 2019. There are also indications that Peloton is losing market share in the connected fitness industry.

The Information reports that Peloton's production halt and the precarious state of its business looks like a prelude to an acquisition by a bigger company, positing that Apple is the ideal candidate to buy Peloton:

The idea of Apple acquiring Peloton is gathering steam among market observers, with the possibility being weighed up by The Motley Fool and Inc., among others.

Analyst Neil Cybart recently highlighted how Peloton is now actively threatened by Apple Fitness+, which is considerably cheaper, costing up to $388.01 less annually for digital classes alone. Cybart cautioned that without major changes in 2022, "Peloton is on track to be a Fitbit 2.0 - a company unable to compete with the giants subsidizing health and fitness tracking as an ecosystem feature."

Article Link: Apple Floated as Potential Buyer of Peloton

Wall St. 'anal'cyst and MSM noise. Complete bunk. Apple will acquire Peloton (as I replied in a fin mag ) when the pigs fly. NO NEED for this losing, no moat, 'momentum ' enterprise at all. Wall St. always does this whenever a firm is caught 'holding the bag'. SOP. Those who follow Bloomberg/CNBC etc. know that this is standard 'par for the course' for these 'analysts'. If Kroger were in financial straits you would hear floated: 'Apple in discussions to acquire major food retailer...plans to sell Macs in the apple/produce section. Synergies appear strong. We see this as a 'buy' '.

 

[Blowback]

Probably someone with peloton stock trying to raise the price so they can sell.

'...we have a Winner!'.....

 

[Blowback]

Apple is very big on when it comes to fitness. If Apple doesn’t make the purchase some other company will.

I remember years ago, being an owner of MSFT stock, how relieved I was when Balmer couldn't purchase Yahoo for billons.....feel the same here. Apple has never purchased Wall Streets garbage for them. Indeed, has never really 'followed' the crooked , self-serving, cancerous paths of most Wall St. 'analysts'.....

 

[Blowback]

Apple isn't in the rescue business.

Yaphet Kotto, RIP , (Alien): 'I don't DO rescue.' Always loved that line.

 

[gene731]

Are Apple considering investing in Coal as

This is a joke... right?!?!

Well I’m going out on a limb and say poster is not joking just stating their opinion. Nothing wrong with that nor you stating your opinion about their post

 

[addictive]

One thing I hadn't considered too much is how little international expansion Peloton has managed to achieve over the last few years. It's still not available in most European countries let alone Asia. Apple could fix it's supply chain issues. I don't believe Apple will bid for this company but it might purchase some of its assets if its facing bankruptcy. We'll find out in less than a year.

 

[entropys]

Apple don’t buy what they can recreate.

the trouble with that theory is Beats. why couldn't Apple have done everything it has in-house without an initial $3b outlay? coolness isn't worth $3B, and it could be argued is something Apple already has.

that said, in comparison $7.9b for Peleton is insanely stupid.

 

[Rainshadow]

It's a very US-centric business model. The USA is a great and large market - but that business model won't work anywhere else, certainly not in Asia, where you could get a personal trainer come to your house every day for a lower cost than the price of Peleton...

In Europe people are more likely to buy sneakers and go running in the forest, or biking as it were, more nature oriented - hard to imagine anyone paying huge sums for a home training equipment / program like that. Yes, there's always some who will pay for this but I think a way lower number than in the USA. I am from Europe that's not how we think there, and I lived in the USA, 1500 US is nothing for the typical overstressed silicon valley wage slave... or (any big city) wage slave. The sentiment in Europe would be use that cash and go into nature... and in Asia the sentiment would be "WTF are you thinking I am getting a massage for $5 now... and having my training session with a triple champ muay thai boxer later for $10"

One word. Weather. I’m sure other countries have it. Nature is nice, but it’s not safe or even possible to bike in snowy, Icy, or sometimes even wet conditions. Where I live, it would be impossible to go for a bike ride and almost truly treacherous to run for 4 months of the year. Sure you could ski, skate, etc, but most of those require travel or a membership nowadays anyway.

Cities also have air quality concerns that aren’t healthy to go outside. I’ve always found it narrow minded when folks say - just go outside. If you really were dedicated to a daily routine, many places make that nearly impossible. If you live in a place you could train every day, 365 days/yr, cool. Most, I would say, don’t.

As far as price, I think most people don’t realize what they spend on gym memberships ~ though I’m entirely unfamiliar with Asian markets I can’t believe these truths don’t hold in the majority of countries where folks are able to spend money on health and fitness concerns..

 

[marinersaptcomplex]

I have never understood the need for a fitness company that forces you to buy both the hardware and the software/subscription. Peloton should've split a while ago; into one company that makes excellent quality bikes and treadmills, and another company that delivers cost effective home workout subscriptions.

 

[clandherr]

I’m surprised Peloton didn’t fail sooner. Expensive bikes, expensive subscription. You get the same thing with a phone/tablet and any cheap bike/treadmill paired with a subscription to some fitness program, many of which are cheaper than peloton or even free.

The bikes aren’t actually expensive. Any decent bike in a nice gym cost more than these bikes. Also, any serious set up with a bike mount like wahoo cost way more than these bikes. Any amateur athlete would know that. Making their bikes cheaper was actual a dumb move on their part

 

[brucewayne]

The bikes aren’t actually expensive. Any decent bike in a nice gym cost more than these bikes. Also, any serious set up with a bike mount like wahoo cost way more than these bikes. Any amateur athlete would know that. Making their bikes cheaper was actual a dumb move on their part

It is a premium product with a premium service, but there are many gym-quality bikes made just as well as the $1500 Peloton Bike for much less money. Rogue Echo, Concept 2 Bike Erg, Assault are all under $1000. You can get the entire concept 2 line up (Bikeerg, Skierg and Rowerg) for the same price as the $2700 Bike+ essentials package.

Where the Peloton has an advantage is the cohesive remote training but of the 6 people I know that bought a Peloton bike or treadmill (or both), only 1 is actually using the service right now. If the other 5 aren't buried under Christmas decorations right now I would bet they soon will be.

 

[1rottenapple]

All of these comments are clearly from people who have never actually used a Peloton.

Right, I'm a big user. Closing in on my 400th ride, 100 yoga class, and 50 stretching class, 75 core class. I don't know if I would want apple to buy peloton. Other than a price drop on the monthly subscription its a pretty great platform.

 

[conmee]

Appleton™️

 

[travelsheep]

As a kid (40 years ago) we had a forest and rivers and mountains and creeks. With that gone, I guess it's digital workouts and outdoor holidays in Aspen for rich kids, and obesity and the Metaverse for poor families...

 

[gijoeinla]

As an owner of everything Apple and then Peloton Tread + and Bike + Peloton BIGGEST blunder was NOT allowing Apple Product integration to begin with. Lame to not be able to use your watch, iPhone, HomePod, even Apple TV to “consume” the content of Peloton. BLUNDER. Apple took ownership of the high end fitness active lifestyle market and when I heard that Peleton was creating its own “Fitbit” for Peleton consumers to wear I immediately saw the beginning of the end. Well I’m lying , my utter disappointment was seeing Peloton run on Android was my greatest disappointment and example of the stupidest idiotic path this company chose. Peloton should have built great products at a decent price that FULLY integrated with every tech device that supports active lifestyle and let the consumer decide what and whose content to consume while working out. Lack of choice and it’s (Peleton) stupid closed ecosystem was and is it’s greatest failure. Apple doesn’t need the equipment BUT getting into a Peloton buyers ecosystem would be a no brainer and sync both parties clearly mutually benefiting both. Duh. For Pelotons arrogance and not openly partnering their products with Apple Googles ecosystem is a big FAIL.

 

[zhenya]

It is a premium product with a premium service, but there are many gym-quality bikes made just as well as the $1500 Peloton Bike for much less money. Rogue Echo, Concept 2 Bike Erg, Assault are all under $1000. You can get the entire concept 2 line up (Bikeerg, Skierg and Rowerg) for the same price as the $2700 Bike+ essentials package.

Where the Peloton has an advantage is the cohesive remote training but of the 6 people I know that bought a Peloton bike or treadmill (or both), only 1 is actually using the service right now. If the other 5 aren't buried under Christmas decorations right now I would bet they soon will be.

LOL, none of those bikes are remotely comparable to the Peloton bikes. They are exactly what I'd expect in the sub-$1000 price range. Case in point:

The Peloton is a lot closer in quality to a Keiser M3i which is a real gym quality bike and runs around $2300. (We owned one before we replaced it with a Peloton). Peloton is effectively subsidizing the price of their equipment because they know they'll sell a long-term monthly plan along with it.

I'm doubtful you actually know anyone who owns a Peloton let alone 6 different people who have quit using theirs. That's far outside of the norm - as mentioned earlier - Peloton publishes their retention numbers and it's well into the 90+% rate, with the average owner using it more than 15 times per month.

 

[webkit]

I have never understood the need for a fitness company that forces you to buy both the hardware and the software/subscription. Peloton should've split a while ago; into one company that makes excellent quality bikes and treadmills, and another company that delivers cost effective home workout subscriptions.

You can sign up for a Peloton app subscription ($12.99/month) that doesn't require the hardware.