Peloton Says Apple's Privacy Rules Limit Its Ability to Gain Subscribers
Peloton has become the latest company to blame Apple's ad-related privacy changes in iOS for negatively impacting its business, according to a new report by Bloomberg's Mark Gurman.
Best known for its at-home exercise equipment and online fitness classes, Peloton blamed the App Tracking Transparency (ATT) rules Apple introduced in iOS 14.5 for making it more difficult to add new subscriptions to its services by targeting online shoppers based on their interests.
The company made the claim this week in its latest earnings call, in which it cited slower than expected post-pandemic economic re-openings, before cutting its annual revenue forecast by as much as $1 billion, while lowering its projections for subscribers and profit margins.
Peloton said it now expects sales of $4.4 billion to $4.8 billion in the fiscal year ending June 2022, down from the $5.4 billion it predicted less than three months ago.
On devices running iOS 14.5 and later, Apple requires that apps ask for users' permission to track them across other apps and websites. Under its ATT framework, users are able to choose whether they wish to be tracked for ads or other marketing purposes.
"Some apps have trackers embedded in them that are taking more data than they need," Apple explains in a promotional video. "Sharing it with third parties, like advertisers and data brokers... This has been happening without your knowledge or permission. Your information is for sale. You have become the product."
Apple was on the receiving end of similar complaints last month from Mark Zuckerberg, who blamed Apple's privacy changes for lower-than-expected quarterly growth during an earnings call for Meta, the company formerly known as Facebook. The Meta CEO claimed the changes "not only [negatively affect] our business, but millions of small businesses in what is already a difficult time for them in the economy."
According to one report, Apple has cost social media companies including Meta, Twitter, Snapchat, and YouTube, nearly $10 billion in revenue in the second half of 2021. But Peloton has more to be concerned about when it comes to Apple, which this week expanded Fitness+, its own home fitness service offering, to 15 additional countries.
Peloton shares have dropped nearly 20% since Apple showcased new Apple Fitness+ features at its September event. In a clear sign of investor unease at Apple's creep into the fitness market, reports earlier in the week linked a dip in Peloton shares to a patent approval for Apple's Fitness+ app, which features HIIT, Yoga, Core, and other workouts taught by trainers, similar to Peloton classes.
Top Rated Comments
I don’t feel like I need targeted ads and companies should stop acting like we HAVE to have them.