Wedbush analyst Daniel Ives says that an Apple acquisition of beleaguered Peloton would be a “major strategic coup” and that if a rival snapped up Peloton, it would be a business-model risk for Apple’s health-care segment.
Peloton’s market capitalization has collapsed amid weak demand for its connected-fitness bikes and treadmills. The company’s stock has cratered more than 80% since early 2021, erasing some $40 billion in market value. Peloton’s market value stands at roughly $8 billion currently.
Apple’s largest acquisition to date was $3 billion for Beats Electronics in 2014. Suffice to say, Apple has scant history of making major acquisitions.
Wedbush in a note on Monday said, “we would be shocked if Apple is not aggressively involved in this potential deal process.”
Nonetheless, Wedbush analysts Dan Ives and John Katsingris wrote in a note, Peloton still has a strong brand and a loyal customer base that makes it an attractive asset for companies like Apple with others like Nike and Amazon also in the fray.
“For [Chief Executive Tim] Cook & Co, acquiring Peloton would be a major strategic coup and catalyze the company’s aggressive health and fitness initiatives over the coming years,” they wrote.
“With approximately 2.8 million paid subscriptions today and a very strong/unique competitive moat, Apple acquiring Peloton would be both an offensive and defensive acquisition in our opinion,” Ives wrote. “Apple may be forced into this deal if Amazon, Nike or potentially Disney aggressively goes after Peloton in a defensive blocking strategic move,” Ives said.
MacDailyNews Take: Peloton has nothing to offer that Apple can’t do better if they so desire.
That said:
If Apple were to buy Peloton, it wouldn’t be for bikes or treadmills… If Apple were to buy Peloton, it would be for Peloton’s 2.49 million connected fitness subscribers. — MacDailyNews, January 21, 2022
If Apple acquired Peloton, they’d do so with the intention of sunsetting it and moving the Peloton subscriber base to Apple Fitness+ with Apple Watches, iPhones, iPads, and Apple TVs.
It’s just a matter of math: How much Apple figures each Peloton subscriber is worth if they move to Apple Fitness+ (plus hardware purchases that recur over time) and how many of those 2.49 million do they believe they can convert. — MacDailyNews, January 31, 2022
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Shop The Apple Store at Amazon.
calling bs on this one.
~2.5M subscribers? For gazillion$$ exercise bikes? How many of those bike owners are already Apple iPhone types already? Not seeing it.
If repeated mention of solving the Covid issue with a REAL focus on comorbidities, esp weight, an AAPL purchase could make sense…at least for a time. Nope, most just want to take a med and be done with it.
Please pass the ranch so I can drench my curly fries. It’s delish with my Land, Air and Sea burger at McD’s.
Spot on MDN, nothing to see here – move on ! 🎯
Wrong Analysis.
Right Analysis: What would buying them do for Apple? Help “defend against Amazon or FaceBook or Google?” Uh, how and why? They company is likely to die on a vine if no one acquires them…
That alone should tell you something. A bit of history for folks:
– 1980’s: Bowflex
– Nautilus Cross Country Skiing stationary
– Schwin Workout system (various copies)
– “The Great Pause”
– Peloton
– LuLu Lemon workout mirror (for those who want to look at themselves even more…)
All of these fitness companies (and their were plenty more) have come and gone. Lockdowns gave Peloton a boost. And I’m sure they’ve wanted to make a fitness watch and build an ecosystem.
Problem: They don’t own an OS Platform, and they make stationary bikes with a video display for too much money… It’s a fad / limited market wrapped with really good adverting, but again, limited.
If Apple wants to make a stationary bike, they can do so. But seems Fitness+ and Apple One Fitness bundle is taking a chunk out of the anywhere workout market… A bike and closing lots of Peloton stores doesn’t make much sense, but distracts a lot.
Let others buy out a bike maker with a display having people tell you to pedal harder. I do not see how trying to resurrect this company would enhance Apple in any way.
Finally, an MDN take I wholeheartedly agree with!! (I knew it would have to happen eventually!)
Agree with MDN. What the fuck at they talking about. Peloton is a blip in time.
Daniel Ives, wants to drive up Peloton’s stock value to recoup some value with this bs, even a blind man can see Apple has nothing to gain buying Peloton. This is a big nothing burger.
How many Peloton customers are already Apple customers? Probably most of them. Acquiring Peloton makes no sense for Apple.