By Chand Bellur
August 18, 2020 at 5:43 p.m. PT
- Peloton, manufacturer of virtual home fitness products, created a $20 billion company in less than eight years, revolutionizing home exercise programs.
- Recent stay-at-home advisories have boosted Peloton’s value, as gyms are closed throughout the world.
- Rumors suggest that Apple is working on its own subscription-based virtual home fitness platform, intended to compete with Peloton.
Peloton: Home Fitness Innovators
I used to go to the gym; however, the whole process became unappealing. Although my gym was only a few miles away, I didn’t utilize it as much as I should.
Going to the gym, in and of itself, takes some effort. You have to get everything you need and commute to the gym. For me, this was a two-mile run, which I preferred to driving. Often, when I arrived at the gym, I couldn’t do much of a workout at all. Virtually every machine was in use, making it difficult to train at the rapid pace necessary to build muscle.
Due to changes in my life, I canceled my gym membership, bought some free weights, and started working out at home. I go out for five-mile runs in my neighborhood. It’s incredibly convenient, and I exercise more often. I’m actually in much better shape after I canceled my membership.
Not everyone is like me. Some people need a trainer to motivate them. Home workouts often become opportunities to eat cookie dough and watch reality TV. Many keep kicking the can down the road, eternally postponing exercise plans until tomorrow — a day that never comes.
For those who need external motivation, Peloton offers a great solution. The company, based in New York City, offers exercise equipment with accompanying media, providing virtual fitness motivation and training.
Peloton offers a bike, treadmill, and accompanying apps for iOS and Android. The bike is Peloton’s most popular item. Although the company provides a treadmill, most casual fitness participants find exercise bikes less challenging. The Peloton bike features a large 22″ display and state-of-the-art technology. Exceptionally well-built, with ergonomics and fitness in mind, the bike starts at over $2000.
Peloton isn’t all about gear. The company also creates innovative live content to help motivate participants. A real, human production staff oversees sophisticated, live broadcasts with multiple camera angles.
The integration of exercise equipment and virtual training is unique to Peloton. Although treadmills and exercise bikes have evolved technologically over time, Peloton was the great leap forward. With live, virtual instruction, participants feel like they’re in a real spinning class and claim they’re more motivated to exercise more often.
Apple Working on Peloton Competitor?
Apple is famous for creating the iPhone. Fewer people are aware of their other creation — Sherlocking. Apple has a long history of swooping in on third-party innovation. The company often copies popular products developed by smaller companies with less effective legal counsel. Apple Music is a blatant copy of Spotify. The small Swedish startup can’t do much in terms of legally battling Apple.
There are myriad examples of Apple stealing ideas from third-parties. They don’t buy the company, patents, or anything. The very term “Sherlocking” refers to Apple ripping off a popular Mac search tool known as Watson. They stole Konfabulator, iPodderX, Sandvox, Growl, and many other ideas from small, third-party companies that are unable to protect their intellectual property from Apple’s hegemony.
Apple even steals ideas from well-established companies like Netflix and HBO Now. Apple’s streaming video service, Apple TV+, is a decade late to the game with nothing exceptional to offer. In this case, however, they’re not a viable threat to competitors. Why would Netflix or HBO sue Apple over something that’s no threat to their bottom line?
Peloton is a different case. The company isn’t small, and they’ve won legal battles against imitators. Furthermore, they offer more than just an app.
Apple is a formidable competitor. It’s unclear exactly what Apple is developing. Unlike most reliable Apple rumors, this one doesn’t originate from Ming-Chi Kuo. There’s little evidence that Apple is moving in this direction. If anything, it’s more that analysts feel Apple will inevitably move into this market, as part of its services strategy. The rumor, substantiated only with corroborating evidence, is based on the notion that Tim Cook is into fitness and sits on Nike’s board.
Peloton Would Likely Retain Most Lucrative Customers
If Apple attempts to Sherlock Peloton, they may be in for a surprise. Most Peloton subscribers spend up to $4000 on equipment. That’s an investment they won’t just walk away from if Apple offers something similar.
There are two types of Peloton subscribers — Connected Fitness and Digital Membership. Connected Fitness subscribers compose Peloton’s largest customer base. These are the people who spent a lot of money on a bike or treadmill. They’re unlikely to leave Peloton for Apple.
Digital Membership subscribers only use the app. It’s a $13 a month membership, which they can walk away from any time. Apple may be able to beat Peloton in this endeavor, offering the service at a loss.
If Apple prices its lightweight fitness subscription product at $5-10 a month, with a free trial period, it could take away some of Peloton’s market share. However, with a rapidly growing customer base that favors a high-end experience, it’s unlikely that Peloton will disappear anytime soon.