Apple Floated as Potential Buyer of Peloton | Digital Marketing Technology| Digital Marketing Trends

today is May 24, 2022

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.

peloton tv workout cardio 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:

If Peloton is to have a future, it would be better off as part of a bigger, more diversified company. Apple is an ideal candidate to take on that project. It has the Fitness+ subscription service for classes and it markets the Apple Watch as a device that can help with jogging and other exercise activities. It could close Peloton's stores and sell the equipment through its own stores. And hey, after today, Peloton's market capitalization is down to $7.9 billion. Cook could pay for that by dipping into the change jar in his kitchen.

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."

Related Stories

Apple Briefly Becomes World's First $3 Trillion Company

Apple briefly became the world's first $3 trillion company today based on market capitalization, which is the total value of all of the company's outstanding shares. The milestone came after Apple's stock price rose over 40% in the last year. The impressive feat, which Apple achieved when its stock price reached the $182.86 mark during intraday trading, came just over 16 months after Apple be...

Apple Customers in Turkey Being Turned Away at Retail Stores as Halt on Product Sales Continues

Wednesday November 24, 2021 10:17 am PST by Sami Fathi

Apple customers in Turkey are being turned away at retail stores by staff following the halt of online product sales in the country, although the exact reason for the in-store sales halt is unclear. According to macReports, the halt is due to rapid currency fluctuations as the Turkish lira has declined significantly in recent days, and store staff are telling customers that normal sale...

Apple Fitness+ Launching in 15 New Countries on November 3

Monday October 25, 2021 9:57 am PDT by Sami Fathi

Last month, Apple announced that its subscription-based Fitness+ workout service would be launching in 15 additional countries "later this year," and today, the company confirmed the launch will take place on November 3. Apple Fitness+ launched in December 2020 in the United States, the United Kingdom, Australia, Canada, Ireland, and New Zealand. Less than a year later, on November 3, Apple...

Beats Fit Pro Available to Pre-Order Worldwide Starting Today

Beats Fit Pro will be available to pre-order worldwide starting today, including in the UK, Ireland, France, Italy, Germany, Spain, the Netherlands, Belgium, Switzerland, Sweden, Canada, Australia, New Zealand, Japan, Singapore, South Korea, and more. First released in the United States a few months ago, Beats Fit Pro are ideal for athletes, with flexible wingtips providing a more secure fit ...

Apple Fitness+ Starts Rolling Out in 15 Additional Countries

Wednesday November 3, 2021 8:42 am PDT by Sami Fathi

Apple Fitness+, Apple's subscription-based fitness service, is now rolling out in 15 new countries, including Austria, Brazil, Colombia, France, Germany, Indonesia, Italy, Malaysia, Mexico, Portugal, Russia, Saudi Arabia, Spain, Switzerland, and the United Arab Emirates. Priced at $9.99 per month, or available as part of the Apple One Premier bundle that has also expanded to new countries,...

Apple Fitness+ Users Can Now Work Out With Friends and Family Using SharePlay

Monday October 25, 2021 10:01 am PDT by Juli Clover

SharePlay, a new feature that's been introduced in iOS 15.1, iPadOS 15.1, macOS Monterey, watchOS 8.1, and tvOS 15.1, is compatible with Apple Fitness+ and adds a fun new feature to Apple's fitness service - working out with friends. Using SharePlay, Apple Fitness+ users can work out with friends and family members over FaceTime. Apple says that this is a good way to help people "stay...

iPhone Was the Most Popular Smartphone in Q4 2021

iPhones accounted for around one-fifth of all smartphone shipments in the fourth quarter of 2021, allowing Apple to reclaim first place as the biggest smartphone vendor, according to a report from Canalys. Canalys estimates that the iPhone accounted for 22 percent of worldwide smartphone shipments in the fourth quarter of 2021. The scale of Apple's shipments is thanks to strong demand for...

Popular Stories

Apple Launches New iPhone 13 Product Pages Highlighting Key Features

Thursday February 3, 2022 7:21 am PST by Joe Rossignol

Apple is rolling out new product pages for the iPhone 13 and iPhone 13 Pro that provide a simplified overview of each device's key features. The new product pages went live in late January and as of today are prominently linked to from the top menu bar on the iPhone page of Apple's website in the United States, Australia, Germany, United Kingdom, and several other countries. Due to browser...

New Low-Cost iPhone SE 5G and iPad Air Coming on March 8

Friday February 4, 2022 12:05 pm PST by Juli Clover

Apple is planning to unveil an updated version of the iPhone SE with 5G and a new iPad Air at an event that's set to take place in March, reports Bloomberg's Mark Gurman. Apple is said to be targeting Tuesday, March 8 for the iPhone SE event. As we have heard several times before, the new iPhone SE will look similar to the 2020 version that's modeled after the iPhone 8, but it will feature...

Apple's Privacy Measures to Cost Facebook $10 Billion in 2022

Thursday February 3, 2022 12:30 am PST by Sami Fathi

Facebook has said measures being taken by Apple on iOS that make it harder for platforms and apps to track users across other apps and websites will cost its business $10 billion in 2022. Facebook yesterday reported $33.67 billion in revenue, and while higher than expected, earnings per share were shy of analyst expectations. Facebook, renamed to Meta, also offered lower guidance for the...

New iPad Air and iPhone SE Models With A15 Chip, 5G, and More Reportedly Enter Production

Apple suppliers have started production of a new fifth-generation iPad Air and third-generation iPhone SE, according to Japanese blog Mac Otakara. Citing reliable sources in China, the report claims that the new iPhone SE will retain the same chassis design as the current model released in 2020, and the device will apparently continue to lack support for MagSafe accessories. Key features of...

New High-End Mac Mini Rumored to Launch at Spring Apple Event

Apple is planning to launch a new, high-end Mac mini at an event in the spring, according to recent reports. The release date rumor comes by cross-referencing recent reports from display analyst Ross Young and Bloomberg's Mark Gurman, both of whom often provide accurate insights into Apple's plans. In December 2021, Young said that a new iMac Pro model with a mini-LED display was going to...