Apple Plans to Launch Fitness Subscription Service

[rwxx]

A lot is stickping with services growing at 15% and on a $53B annual revenue run rate.

$53B in services revenue.

True, but what is the source of that growth? Calling App Store commissions "services" is pretty disingenuous. By lumping things like ATV+ and News+ in with App Store commissions, Apple is able to completely conceal poor services performance within the growing pile of App Store commissions.

There's nothing wrong with what they are doing except that it gives investors a false sense of security, especially if you're an Apple bull. If Apple loses its App Store monopoly, "services" revenue falls off a cliff. Right now that doesn't seem likely, but with more government scrutiny (both in the US and abroad), the likelihood grows every day.

I'd like to see Apple report numbers on subscription services alone. Take App Store commissions and AppleCare warranties (although I think it's fair to call an extended warranty a service) out of that "services" number and what do you have? Is the segment's growth coming from App Store commissions or actual service (things users choose to pay for) growth? That's the real picture.

 

[rwxx]

Isn't that basically the mindset of every business? When you quit throwing stuff at the wall, your business dies.

Throwing stuff against the wall to see what sticks implies that the business has no idea what it's doing and is just trying anything. I don't think that's the mindset of most businesses and certainly not Apple. Apple is very disciplined and thoughtful about what it brings to market. Except for "services". Here I think one can make an argument that they are just throwing things against the wall and I will completely agree with that statement if this fitness service rumor is true.

 

[Apple_Robert]

I like this move by Apple, even though I don’t need guided exercise routines. Hopefully, this will help more people get physically and mentally healthy.

 

[DeepIn2U]

integration with Apple Watch would be cool.

Lolita already there. There is no need for a “fitness” service to go with the app and it’s built in reminders. You’re either going to do your “fitness” work or not.

I find it funny Apple will call this “fitness” when all their exercise apps ignore use of any weight training related exercise movements. Fitness includes this not just aneorobic exercise.

at this point you might as well queue up Olivia Newton-John In Zanadu with leotards & leg warmers.

PS: if you recall seeing this movie or seeing any ad of it I’m sorry to cause you any 80’s memory trama LMAO.

 

[DeepIn2U]

It should be free and included with an Apple Watch. Instead of separately charging customers, Apple should devote the effort into improving the capabilities of the Apple Watch, for example make the watch able to coach the user and offer fitness videos on their iphone.

This is a rip off; and more customers will buy the apple watch if the fitness coaching capabilities increase.

Yeah just like Peloton gives away their fitness programs to improve their $2,000 bike right?

im in agreement with @Jony Ive and Co. but not in his line of thinking.

if Siri kept advancing as it should have every 1 or 2 yrs then potentially it would’ve been advanced enough to adapt and coach us through our workout. Not only that but determine from calendar appointments (corporate accounts ideally) and determine which documents would be relevant (mail, storage iWork with say Ms plugging for O365 docs) to suggest getting ready and attach for availability.

yet we’re nowhere close to any of this unfortunately on any platform.

think the assistant in Man of Steele (Keelic) I want that!

 

[mariusignorello]

Apple should leave fitness to those who know about fitness and are in the business already. They want to be every thing at the same time. I guess that won't turn out well (for Apple).

I agree. And being a personal trainer, nothing replicated in person instruction. This may work for some individuals but if they do not already have a solid understanding of exercise and nutrition, which is 90% of their issue, a class subscription doesn’t work. No discipline = no consistency = no results, and it’s proven.

 

[mariusignorello]

I find it funny Apple will call this “fitness” when all their exercise apps ignore use of any weight training related exercise movements. Fitness includes this not just aneorobic exercise.

And people are in dire need of weight training. Quite a few common ailments like back pain, arthritis and knee injuries can be remedied, or at least improved with a well thought out weight program. I’ve taken clients in with knees that can only bend in the slightest range of motion and now they can do weighted squats with full range.

 

[Mpalmieri1203]

I don’t see why Apple would want to sell and maintain workout equipment when they have access to all of the data from Peloton and other workouts from the Apple Watch.

I think you could say the same thing about any piece of hardware they sell.

 

[CarlJ]

it will say - "get up, lazy ass - your workout isn't complete!"

Say? Say? Why do you think they’re installing the shock coils on the underside of the new Apple Watch?

 

[CarlJ]

Apple will need to recruit recognized "talent" for its sessions. That will make it more appealing.

Or just really cute talent.

 

[CarlJ]

If it is subscription based they should offer discounts based on the number of calories you burn as an incentive.

Getting fit isn’t enough of an incentive?

 

[daniesy]

Another apple service that will be left for dead, just like itunes u, news+, maps, and others...

 

[CarlJ]

Another apple service that will be left for dead, just like itunes u, news+, maps, and others...

Maps? I use Maps all the time. I much prefer it over Google Maps. Hardly left for dead.

 

[PickUrPoison]

One benefit of Apple having more services is it keeps their overall margins higher, which allows them to keep lower hardware margins or even reduce them.

“In the fiscal year 2019, Apple's services business posted gross margins of 63.7%, approaching double the 32.2% gross margin of the company's product sector.” (https://www.investopedia.com/apple-s-5-most-profitable-lines-of-business-4684130)

Apple’s gross margins have been stable over the past 6 years (https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-margins). With increasing services revenue this means hardware margins are declining — not by a lot but enough to continue to reduce the so-called Apple tax on hardware.

In short, more services from Apple means Apple can have lower cost hardware options and still maintain their targeted margins (Apple also makes up hardware margins on their generally overpriced upgrades).

Yup. High gross profit on services subsidizes hardware prices. And yes, expensive RAM/SSD upgrades subsidize the base prices. (Too bad more people don’t understand both points.)

btw Cook mentioned in the last earnings call that hardware gross margin was below 30% last quarter at 29.7%. Overall gross profit was still 38% though, due to the much higher profitability (67.2%) of the services segment, as you mentioned.

Even if someone doesn’t like or subscribe to any of Apple’s services, they still benefit from lower hardware prices.

 

[kesennnnn]

Hmm I mean if it’s good, I’m down to subscribe. Love Apple Health data, already have the Withins scale and Hydrate Bottle to go along with the Apple Watch data. Love to find new ways to exercise and not stay in bed all day during this quarantine, haha.

 

[russell_314]

If it has a free trial period to see if it’s worth it I would definitely go for it. This is something I would seriously be interested in

 

[alexandr]

Say? Say? Why do you think they’re installing the shock coils on the underside of the new Apple Watch?

well good, we all need motivation in these uncertain times!

 

[Cleartz]

Not surprised. When Arcade came out I was thinking what else they could do and a fitness subscription was it.

After the fitness subscription, I wonder what will be next?

 

[Jony Ive and Co.]

Ya! And Apple Music should be free with every iPhone! /s

Not scarcastically, it really should. You shouldnt have to pay extra just to use features of your iphone (i.e. listening to music). Sure, there are free or ad-based alternatives, but when you buy an iphone, you should be able to listen to quality Apple Music for no extra charge. It should be a benefit of buying Apple products

 

[TrevorR90]

I didn't see this coming. Only a matter of time before we get the Apple bike/treadmill.

The fitness industry is much bigger than most realize.

 

[the-msa]

Isn't that basically the mindset of every business? When you quit throwing stuff at the wall, your business dies.

funny how thats suddenly no biggie, while it was an apple-users no. 1 insult against samsung just a couple years ago 😂

 

[MacBH928]

seems like Tim Cook has come to the end of Steve Jobs notes...

 

[cmaier]

Another apple service that will be left for dead, just like itunes u, news+, maps, and others...

How is maps “left for dead?” It’s the number one used map app on ios, and is constantly receiving major updates.

 

[Belle Pomme]

Or just really cute talent.

Yes, that would get me to tune in I think!

 

[DeepIn2U]

Or just really cute talent.

NO, just no. Cute or physically appealing does NOT equal knowledge, wisdom or the necessary experience when it comes to physical fitness.

The industry has been consistently making this mistake since the 80's with aerobisize from super models on TV selling VHS tapes (Heather Locklear, Cindy Crawford, etc) to smart actual experienced martial artists with minimal movie fame teaming up with beautiful models to do the same, selling VHS/DVD content; Thai-Bo anyone??!

We're starting to see this in social media as well ... and I loathe just how EASY it is for someone to quickly focus and get an online certification for personal trainer (study criteria for the in the current knowledge; which changes every 2yrs: stretching and holding vs stretching and bouncing is a good comparison).

You can tell the lack of knowledge trainers whom are under 30 and typically super skinny (not by genetics or physical fitness alone) selling the a-typical loose x amount of weight in x amount of days VS the actual experienced trainers who have been working out for years and have a tactical plan geared to you to aspire to your goals with proper follow-up and proper daily/weekly self practicing what they preach. You don't loose weight just by dieting or starving yourself alone or with aerobics

If a training can train a few people to bodybuild gain muscle while also getting obese people to loose weight and they can show and track it to others publicly and have a proven track record ... THAT's who should be contacted.

That's my view/stance. Don't follow or take advice just because someone 'appear's' to have the answer.