Peloton Turning to Apple Suppliers After Failing to Find a Buyer

[MacRumors]

Peloton is switching to Apple suppliers like Quanta and Pegatron as it attempts to turn its business around, Bloomberg's Mark Gurman reports.

Peloton will no longer produce its bikes and treadmills at its own factories and rely solely on manufacturing partners in a desperate attempt to simplify its operations and reduce costs, according to the report. Apple supplier Quanta already provided touch screens to Peloton, but now the company is adding iPhone assembler Pegatron to its supply chain to build its upcoming rowing machine as it attempts to mirror more efficient supply chain models.

Earlier this year, Peloton was looking for an investor like Apple to buy around 20 percent of the company in an effort to improve its fortunes amid dwindling demand for its products and fierce competition from services like Apple Fitness+. Following months of bleak news about Peloton's "precarious state" as demand for the company's products dried up, including the revelation that it had temporarily halted production of its bikes and treadmills, Apple was repeatedly floated as a potential buyer of the troubled fitness business at the start of this year. Even so, Apple has shown no interest in acquiring a stake in Peloton.

Analyst Neil Cybart previously highlighted how Peloton is now actively threatened by Apple Fitness+, not least because it is considerably cheaper, costing up to $388.01 less annually for digital classes alone. Cybart cautioned that without major changes this year, "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: Peloton Turning to Apple Suppliers After Failing to Find a Buyer

 

[calstanford]

So what does that company even do then?

 

[StudioMacs]

So what does that company even do then?

Charge a monthly subscription fee.

 

[Shirasaki]

Is this the same company that disables users treadmill if Customer doesn’t pay monthly fee? Or if customer repairs their own expensive treadmill it will just fail? Wonder where those money come from.

And now they go for China to reduce manufacturing cost. Heh.

There goes all the bring back chants.

 

[TonyC28]

"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."

I’m not sure this is correct. Apple Fitness+ is a competitor to Peloton’s app but it’s not a matter of ecosystem as Apple isn’t producing fitness hardware. Peloton’s problem is they sell an expensive bike and to use that bike’s full features you need to pay a fairly steep monthly fee.

 

[Christoffee]

Am I right in thinking that once Peloton stop supporting their machine they are useless? And now they are saying that they are struggling. Which means no one will buy their machines in case they go bust, so they will go bust.

 

[Orange Bat]

I’m a bit surprised that Apple has yet to make any other fitness products besides a watch, or at least work with manufacturers to make devices. A stationary bike makes sense, as well as a treadmill and rowing machine. I think that integrating these devices with Fitness+ is a no-brainer. Of course the biggest problem would be to keep prices down enough. Peloton‘s entire problem is cost. It did well with people who could afford them during Covid, but it is definitely a luxury item and cannot handle a downturn in the economy.

 

[PinkyMacGodess]

Is this the same company that disables users treadmill if Customer doesn’t pay monthly fee? Or if customer repairs their own expensive treadmill it will just fail? Wonder where those money come from.

And now they go for China to reduce manufacturing cost. Heh.

There goes all the bring back chants.

I don't know why people seem to think they were manufacturing in country. Their equipment has always been manufactured somewhere outside the US. I tracked the frame of my first Peloton to some company in Brazil. I was impressed it wasn't being churned out in some back alley in China to be honest. Too much of what we buy comes from those places, or worse.

And this isn't like any other 'money generating product', like say Ink Jet Printers, or the copier I had years ago. (It was a relabeled Sharp product with a 'stinger' built in to the mechanism, a 2 inch long spike that fit into an outrageously over priced toner cartridge that was the exact same as a Sharp cartridge that just didn't have the hole for that spike) Highway robbery, or capitalism?

Peloton uses steel frames and other heavy parts because they are making the things as cheaply as possible and they likely still sell them at a loss. Their whole market is the monthly subscription. No pay, no run/ride/row. I don't know why anyone would think that unfair. The world is full of examples where that happens.

 

[I7guy]

For those who have bought Peletons' pricey equipment, I hope they continue to see a value in the product.

 

[PinkyMacGodess]

Am I right in thinking that once Peloton stop supporting their machine they are useless? And now they are saying that they are struggling. Which means no one will buy their machines in case they go bust, so they will go bust.

Correct.

If there is no server connection, the bikes and other products will have severely limited use potential. Our internet went down for a couple days, and no Peloton. Supposedly you can ride it in 'free mode', no classes etc, so it's then basically a 'dumb spin bike', but it's a lot to pay for a 'spin bike'. They did, supposedly make a 'server in a can' setup for cruise ships. The bikes connected to the server and had a selection of downloaded rides but there has never been a residential version of that capability, so far.

I was hoping someone could hack them and make it so the bikes will be programmable and could find a way to download rides. It's probably a high ask.

 

[PinkyMacGodess]

For those who have bought Peletons' pricey equipment, I hope they continue to see a value in the product.

If they use it, yes...

 

[0112862]

“Pioneers get slaughtered and settlers prosper”

blackberry, fitbit, peloton, netflix (soon, ads and password breakdown will tear them down) and tesla

 

[PinkyMacGodess]

So what does that company even do then?

They produce content for their devices. There are new rides produced nearly every day. They have a huge number of 'actors' that make their content. For those that have never experienced a Peloton class, you really should. They are very engaging and fun and not just a 'spin class'.

 

[GadgetBen]

I have the bike and a tread. Quality equipment, which Apple don't have.

Their live classes are much more engaging, motivating and interactive than the prerecorded videos that Apple churn out. There are many global fitness groups now, and we coordinate and attend classes together. Peloton really are THE best global digital gym.

 

[no_idea]

I still cannot make sense of paying for a subscription service just to have my exercise equipment work. This is why I stick to non-tech non-subscription exercise stuff like running outside and a concept2 for rowing. As appealing as the peloton and hydrow are, I just can’t do it

 

[Wxchaser]

Peleton's business model is not viable.

 

[PinkyMacGodess]

There are other companies that Apple could buy that would make more sense and not be seen as 'saviors'. Saris being one of them.

They make some of the best smart bike trainers on the market, and a 'motion plate' that has rocked that niche industry. They are suffering, apparently, from the same ills as Peloton unironically. They have used mainly US based manufacturing as well. Their H3 trainer is the 'go to' trainer for a lot of people. It's at a great price point, is insanely quiet and very powerful. It would be a shame for that product to disappear from the market.

The bad part of Apple buying them would be the highly likely movement of all their manufacturing to China, or Vietnam, etc. Saris also makes bike racks and other bike related products as well.

Peloton is like a Nordictrak of high tech. They welded a tablet on a spin bike and lit the fire for interactive training. It would be a shame of they can't make this a longer term business, and yet whole boatloads of companies that are just as 'earth shaking' end in failure, sadly.

Peloton rocks. Their management at the time sucked the wind out of them. They deserve to continue, IMO...

 

[FightTheFuture]

Correct.

If there is no server connection, the bikes and other products will have severely limited use potential. Our internet went down for a couple days, and no Peloton. Supposedly you can ride it in 'free mode', no classes etc, so it's then basically a 'dumb spin bike', but it's a lot to pay for a 'spin bike'.

Gotta say, this really reminds me of TiVo. How that device really only functioned properly with a $15/mo subscription.

 

[BXRich]

Am I right in thinking that once Peloton stop supporting their machine they are useless? And now they are saying that they are struggling. Which means no one will buy their machines in case they go bust, so they will go bust.

yes and no, a lot of the bike functionality is hardware based. They don't control remotely so it's not impossible for them to go full tablet mode by making an adapter for the screen connectors to connect to a tablet and allow you to download classes vs stream. They already have the ability to download classes for offline outdoor activities.

 

[PinkyMacGodess]

I still cannot make sense of paying for a subscription service just to have my exercise equipment work. This is why I stick to non-tech non-subscription exercise stuff like running outside and a concept2 for rowing. As appealing as the peloton and hydrow are, I just can’t do it

Cable TV. Home internet. Road toll fees. There are thousands of examples of products and services we pay money to use. Peloton isn't any different.

I graduated to a smart trainer and Zwift. The subscription price, month to month is less, but the entry price was a bit steeper. *shrug* Humans were meant to move. Peloton facilitates that. Their management sucked, but their product is solid. If anything they should cut some of their talent and their cost.

 

[PinkyMacGodess]

Gotta say, this really reminds me of TiVo. How that device really only functioned properly with a $15/mo subscription.

You *can* use the Peloton bike without the subscription, but it would be like using a TV without cable. It *works*, but the choices are severely limited, and they have us... I think of WebTV. Those boxes were worthless after the service died. The Nike FuelBand, useless tech when Nike pulled the plug.

 

[BXRich]

For those who have bought Peletons' pricey equipment, I hope they continue to see a value in the product.

If it's something they use all the time, they probably do. You think everyone who owns a 16in Macbook Pro is some power user who needs that much machine? No, they're using it to check email and watch YouTube so what you're saying about Peloton owners can be said about most Macbook owners. I've actually had two Macbooks crap out me since my wife got her Peloton 7 years ago so she's actually seen more value in that than I have in Macbooks...

 

[I7guy]

If it's something they use all the time, they probably do. You think everyone who owns a 16in Macbook Pro is some power user who needs that much machine? No, they're using it to check email and watch YouTube so what you're saying about Peloton owners can be said about most Macbook owners. I've actually had two Macbooks crap out me since my wife got her Peloton 7 years ago so she's actually seen more value in that than I have in Macbooks...

The Macbook is a general purpose computer, while the Peloton is a single usage pricey piece of equipment. If somehow Peloton goes out of business or the subscription classes start to not deliver the value, which is the draw of the Peloton, what is the consumer left with? An expensive exercise bike....

The Macbook can be fixed, however.

 

[archi penko]

The most amazing part about peloton is the app. It changed my fitness life. I don’t care for and will probably never bother with any of the hardware. And you don’t need any of the hardware to use the app. I don’t want a tread or machine or any other. I prefer the outdoors.

The app, the instructors, the lessons, the variety, content is absolutely amazing. Far far better than Apple Fitness. Or any other competition.

$13 USD a month better than a Netflix subscription

Why they don’t double-down on advertising the app is beyond me. More users here will be like the iPhone is to the Apple ecosystem. Some users will convert & buy in.

 

[webkit]

“Pioneers get slaughtered and settlers prosper”

blackberry, fitbit, peloton, netflix (soon, ads and password breakdown will tear them down) and tesla

Why would adding an ad-supported option hurt Netflix? A number of streaming services have ad-supported plans including HBO Max, Hulu, Paramount+, Peacock, etc.

Disney+ will also be offering an ad-supported option soon, and it expects most customers to pick that plan (similar to their Hulu customers).