On Thursday, CNBC reported that Peloton has temporarily halted production of its bikes and treadmills in what feels like the prelude to an acquisition of the troubled fitness equipment maker. The Information‘s Martin Peers thinks that if Peloton is acquired, “Apple must be the obvious buyer.”
Martin Peers for The Information:
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.
MacDailyNews Take: If Apple were to buy Peloton, it wouldn’t be for bikes or treadmills.
The beauty of Apple Fitness+ is that it works without specialized equipment. All you need is an Apple Watch.
If Apple were to buy Peloton, it would be for Peloton’s 2.49 million connected fitness subscribers.
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Please don’t waste my shareholder capital on that acquisition or a gaming company.
Such a purchase would be about as business-necessary as the Beats purchase. It could augment, but Apple could do everything better from scratch.
Well said. It would be like the Beats purchase — done with a bigger plan in mind. Beats moved along both music streaming and wireless earbuds, two things Apple was new to. But I doubt this happens with Peloton. Apple would have to support the existing hardware, clear the hardware inventory, and Peleton’s current market cap is an expensive 9 Billion (and Peloton debt is probably significant). That’s taking on some non Apple centric business at a hefty price. That wouldn’t be Apple’s normal MO. Get the user base over to Fitness+ and steep in the eco? Yes. The rest of it, seemingly no.
The Beats purchase was necessary. They got the biggest maker of headphones in the world, a company that was, and is as profitable as Apple itself. And they got the music service which turned into Apple Music.
But this is different.
Anything above $125 million would be a waste
Peleton stockholders would friggin love that, getting about .02 cents on the dollar for their shares 😀 — shares that are already way off their high.
If Peleton broke up the company into parts for sale, hardware to a fitness hardware maker while Apple bought the 2 million+ user base?it’d be worth significantly more than 125 million especially if they could project 25% would buy an Apple Watch and use Fitness+. That’s worth a couple billion just for the user base.
Anything above 62.5 million would be a waste.
I like the idea as long as Apple doesn’t pay too much for the acquisition. If it costs what Beats cost ($3B), then I think it’s OK. It could be a good fit for Apple’s health services. Peloton hardware seems to be overpriced but as long as Apple can make money from services, then it might work out for Apple. If Apple doesn’t acquire it, I’m sure some other company will. Microsoft and Google have plenty of cash to spend, so I think one of those companies would go for it.
I’d personally like to see Apple acquire some e-bike company and sell an AppleBike. A VanMoof acquisition would be a nice fit for Apple. E-bikes are definitely on the rise.
Sounds like a great idea. Apple should make a (self-driving) Apple bike.
Then they should put a Peloton on top of it, since now you have no steering to do, you have plenty of time for exercise.
They could then put a generator on the Peloton and harvest the electricity to help augment the bicycle power.
Apple contact me if you want to patent the idea.
The problem with all of the advice we’re seeing as to buying this, is about the advantage to Peloton. I’m not seeing a good reason why Apple would want it though. Does Apple even have room in their stores to put these devices so that people can see, and try them out? Would Apple customers be that interested?
I’m guessing no, no, and except the user base) no there isn’t a good reason (unless Apple has a plan to get into selling a fitness device, which just doesn’t seem likely).