Longtime Apple analyst Gene Munster believes it’s likely that Apple will acquire Peloton in 2024. Apple will look to bolster their workout segment in 2024 by adding fitness equipment to complement the Watch and fitness tracking software, according to Munster. Peloton has a loyal subscriber base of about 3 million users that will add about $1.7B to Apple’s subscription revenue, Munster estimates. He believes an acquisition of Peloton by Apple fits well into Cupertino’s continued investment in health and wellness.
Ian Krietzberg
for TheStreet:
Deepwater Management’s Gene Munster expects this year to be a strong one for Apple, with the coming release of the Vision Pro headset, artificial intelligence upgrades on their way to the Siri virtual assistant, and what he expects to be at least one big-name acquisition: Peloton.
The stars, Munster said, are lining up for Apple to acquire Peloton, the connected exercise-and-fitness company whose stock has fallen hard from pandemic-era highs. In 2021 shares of Peloton were trading above $150; the stock at last check was up 1.7% at $6.23.
Peloton, Munster told CNBC, is a hardware, software and services company, a trifecta for which Apple has become well-known. And Apple, meanwhile, is working to expand its subscription revenue.
If the company is able to maintain Peloton’s roughly 3-million-strong user base, which brings in about $1.7 billion in revenue, Apple could add around 11% to its subscription piece, according to Munster.
“It was almost five years ago today that (Apple CEO) Tim Cook famously said that Apple’s greatest contribution to humanity will be related to health,” Munster said. “They’ve been teasing around Apple Watch; they have a fitness product that basically no one uses. And this is an opportunity.”
MacDailyNews Take: Well, it’s not like we haven’t entertained the idea…
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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Would love to see what Marc Newson could do with a redesign of the Peloton hardware.
isn’t this the guy who kept insisting that Apple was about to sell a television?
No.
Peloton had huge losses in profit and subscribers in 23, following their trend in 22. Some of those subscribers have undoubtedly already moved to Apple. Apple doesn’t need to buy a dying Peloton, it just needs to play the long-game and let Peloton self-destruct on it’s own.
I have no idea why Peloton would be attractive to Apple.
1. Hardware is overpriced.
2. I would be stunned if most of Peloton’s subscriber base weren’t already Apple customers.
Maybe if Apple could acquire Peloton’s content—for pennies on the dollar—and then just add it to the Apple fitness catalogue.
I guess Apple could make a nice Fitness bike with a built-in iPad, preloaded with Apple Fitness videos, but that’s not really Apple’s style.
Tonal is great too
Higo, you’re spot on! Tonal would be a purchase for Apple to complement its fitness service.
I just realized that the bike workout is the best workout that can pair with the Apple Vision Pro. If they buy Peloton, that is a huge user base that will want to buy the Apple Vision Pro.
Perhaps they scratched the Apple Car, and are wondering what to do with all that vector mapped image data. This would actually make me consider buying a stationary bike if I can bike just about anywhere in the world with an immersive 3D experience.
Interesting idea but they’re not there yet, same with Fitness+. Sweating into your delicate $3500 computer while thrashing about is not a recipe for happiness.
Peloton’s subscriber attrition rate is eye-watering. Why would anyone attach a lifetime value to a Peloton subscriber?
I don’t see Peloton as a target for Apple. IBM, on the other hand, has compelling IP, cloud computing offerings, an AI presence and strong consulting business. The stock, according to some, is undervalued. Could be a good fit.
At a market cap of $2.3B that’s about $960 per subscriber. Less assuming <100% adoption and much less assuming customer overlap.
ROI seems questionable.
buy strava, zwift, or wahoo…peloton is garbage especially the hardware…it makes money from people forgetting to cancel as they stop using the bike and forget lol