Apple Floated as Potential Buyer of Peloton

Following months of bleak news about Peloton's "precarious state," including the revelation that it has halted production of its bikes and treadmills, Apple is being floated as a potential buyer of Peloton's troubled fitness business.

peloton tv workout cardio
Yesterday, CNBC reported that Peloton will temporarily stop production of its connected fitness products due to a "significant reduction" in consumer demand, a pressing need to control costs, and amplified competitor activity. In a confidential company presentation earlier this month, Peloton told employees that products such as the Bike, Bike+, and Tread will be out of production for between six weeks and six months.

As a business, Peloton has high customer acquisition costs, translating to high product pricing. Toward the end of last year, the company reduced the price of its entry-level bike by almost 20 percent to $1,495 in an attempt to drive up sales through the end of 2021. It then emerged that the company is planning to lay off 41 percent of its sales and marketing staff.

CNBC also revealed that the company's fiscal forecasts do not take into account new delivery and setup fees between $250 and $350 that customers will have to pay on top of the cost of the Bike or Tread. In addition, Peloton has seen low email capture rates for its upcoming $495 strength training product, "Peloton Guide."

In a press release preannouncing its upcoming financial results yesterday, Peloton CEO John Foley said that the company is now "taking significant corrective actions to improve our profitability outlook and optimize our costs." Peloton's stock has since plunged 24 percent, now floating around 85 percent below where it was trading this time last year, and even $5 less than when it went public in 2019. There are also indications that Peloton is losing market share in the connected fitness industry.

The Information reports that Peloton's production halt and the precarious state of its business looks like a prelude to an acquisition by a bigger company, positing that Apple is the ideal candidate to buy Peloton:

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.

The idea of Apple acquiring Peloton is gathering steam among market observers, with the possibility being weighed up by The Motley Fool and Inc., among others.

Analyst Neil Cybart recently highlighted how Peloton is now actively threatened by Apple Fitness+, which is considerably cheaper, costing up to $388.01 less annually for digital classes alone. Cybart cautioned that without major changes in 2022, "Peloton is on track to be a Fitbit 2.0 - a company unable to compete with the giants subsidizing health and fitness tracking as an ecosystem feature."

Top Rated Comments

Mansu944 Avatar
18 weeks ago
Probably someone with peloton stock trying to raise the price so they can sell.
Score: 68 Votes (Like | Disagree)
User 6502 Avatar
18 weeks ago
I’m surprised Peloton didn’t fail sooner. Expensive bikes, expensive subscription. You get the same thing with a phone/tablet and any cheap bike/treadmill paired with a subscription to some fitness program, many of which are cheaper than peloton or even free.
Score: 47 Votes (Like | Disagree)
JJayguy23 Avatar
18 weeks ago

Peloton does not deserve to get bought out, just needs to go under. Ridiculous business model.
Instead of Peloton, I ride my bicycle outside in the fresh air. Much cheaper, and I get good-ole vitamin D!!!!!
Score: 41 Votes (Like | Disagree)
Psychicbob Avatar
18 weeks ago
Are Apple considering investing in Coal as well?
Score: 39 Votes (Like | Disagree)
Sciomar Avatar
18 weeks ago
Peloton does not deserve to get bought out, just needs to go under. Ridiculous business model.
Score: 34 Votes (Like | Disagree)
urnotl33t Avatar
18 weeks ago
Why buy? Kill them then take their people. Why buy debt? That's stupid. This is business, not Sesame Street.
Score: 32 Votes (Like | Disagree)

Related Stories

Apple fitness plus feature

Apple Fitness+ Starts Rolling Out in 15 Additional Countries

Wednesday November 3, 2021 8:42 am PDT by
Apple Fitness+, Apple's subscription-based fitness service, is now rolling out in 15 new countries, including Austria, Brazil, Colombia, France, Germany, Indonesia, Italy, Malaysia, Mexico, Portugal, Russia, Saudi Arabia, Spain, Switzerland, and the United Arab Emirates. Priced at $9.99 per month, or available as part of the Apple One Premier bundle that has also expanded to new countries,...
oculus health app

Oculus Quest 2 Movement Data Will Sync With Apple Health App Starting in April

Thursday March 10, 2022 11:07 am PST by
Facebook parent company Meta today announced an upcoming fitness update for the Oculus Quest 2, which will allow fitness data captured during VR workouts to be integrated with the Apple Health app. Right now, when people exercise with interactive games like Liteboxer, Beat Saber, or Dance Central using the Oculus Quest 2, the data can only be viewed on the Oculus Mobile app on the headset...
Apple Logo Cash Feature Blue

Shareholders Advisory Group Doesn't Want Tim Cook to Get $99 Million Pay Package

Wednesday February 16, 2022 10:49 am PST by
Apple shareholders are being urged to vote against a planned $99 million compensation package for Apple CEO Tim Cook, reports Financial Times. Shareholder advisory group Institutional Shareholder Services (ISS) said on Wednesday that there is a "significant concern" with the stock Cook was awarded in 2021. Cook last year was awarded stock valued at $82 million, along with a $3 million salary ...
apple park drone june 2018 2

Apple Is 'Ungodly Well-Managed,' Billionaire Investor Says

Friday February 18, 2022 5:23 am PST by
Apple has been lauded as "ungodly well-managed" by billionaire investor Charlie Munger, Yahoo Finance reports. In an exclusive interview, the Berkshire Hathaway vice chairman told Yahoo Finance Editor-in-Chief Andy Serwer:I think Apple is one of the strong companies and will stay a strong company. I think it's ungodly well-managed. Apple is now Berkshire Hathaway's largest stock holding,...
iphone 13 pro max display bleen

Apple Developing Hardware Subscription Service for iPhones and Other Devices

Thursday March 24, 2022 10:18 am PDT by
Apple is developing a hardware subscription service that would allow customers to "subscribe" and receive an iPhone or other Apple device as part of their subscription, similar to the way current Apple subscriptions like iCloud work, reports Bloomberg. Customers would be able to pay a monthly subscription fee and gain access to a device for the subscription period. This would be ideal for...
iOS App Store General Feature JoeBlue

Ukraine Asks Apple to Stop Product Sales and Block App Store Access in Russia

Friday February 25, 2022 3:19 pm PST by
Ukrainian vice prime minister Mykhailo Fedorov today wrote a letter to Apple CEO Tim Cook calling on Apple to stop device sales and block App Store access in Russia. In the letter, Fedorov says that he is asking for Apple's support to stop supplying Apple services and products to users in Russia amid the Russian invasion of Ukraine.I appeal to you and I am sure you will not only hear, but...
apple fitness workout

Apple Fitness+ Launching in 15 New Countries on November 3

Monday October 25, 2021 9:57 am PDT by
Last month, Apple announced that its subscription-based Fitness+ workout service would be launching in 15 additional countries "later this year," and today, the company confirmed the launch will take place on November 3. Apple Fitness+ launched in December 2020 in the United States, the United Kingdom, Australia, Canada, Ireland, and New Zealand. Less than a year later, on November 3, Apple...
peloton logo

Peloton Says Apple's Privacy Rules Limit Its Ability to Gain Subscribers

Friday November 5, 2021 3:57 am PDT by
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...

Popular Stories

iPhone 14 Pro Purple Front and Back MacRumors Exclusive

iPhone 14 Pro Renders Highlight Multiple Design Changes

Wednesday May 25, 2022 8:56 am PDT by
Leaker Jon Prosser today shared ostensibly accurate renders of the iPhone 14 Pro, providing the most accurate look yet at what the device could look like when it launches later this year. In the latest video on YouTube channel Front Page Tech, Prosser revealed renders of the iPhone 14 Pro made by Apple concept graphic designer Ian Zelbo, highlighting a range of specific design changes...
iPhone 13 Always On Feature

iPhone 14 Pro Screen Refresh Rate Upgrade Could Allow for Always-On Display

Tuesday May 24, 2022 7:23 am PDT by
Last year's iPhone 13 Pro models were the first of Apple's smartphones to come with 120Hz ProMotion displays, and while the two iPhone 14 Pro models will continue to feature the technology, their screens could well boast expanded refresh rate variability this time round. To bring ProMotion displays to the ‌iPhone 13 Pro models‌, Apple adopted LTPO panel technology with variable refresh...
iPad Pro USB C Feature Coral

Deals: Apple's iPad Pro Reaches Up to $449 Off in Amazon's Latest Sales

Wednesday May 25, 2022 10:09 am PDT by
Amazon is marking down a wide variety of 11-inch and 12.9-inch iPad Pro models this week, with prices starting as low as $749.00 for the 11-inch tablet. You'll find the full list of sales below, all of which can be found on Amazon. Note: MacRumors is an affiliate partner with some of these vendors. When you click a link and make a purchase, we may receive a small payment, which helps us keep...
apple account card

Wallet App Now Supports Apple Account Cards on iOS 15.5

Wednesday May 25, 2022 5:01 pm PDT by
Apple appears to have recently updated the Wallet app to allow users to add an Apple Account Card, which displays the Apple credit balance associated with an Apple ID. If you receive an App Store or Apple Store gift card, for example, it is added to an Apple Account that was previously visible in the App Store and Apple Store apps. As of today, the Apple Account balance can also be added to...
Apple Tap to Pay iPhone

Apple Stores Rolling Out iPhone-to-iPhone Contactless Payments Starting Today

Wednesday May 25, 2022 6:54 am PDT by
Apple in February unveiled a new "Tap to Pay on iPhone" feature that will allow compatible iPhones to accept payments via Apple Pay, contactless credit and debit cards, and other digital wallets, with no additional hardware required. Apple began testing the feature at its Apple Park Visitor Center earlier this month, and now Bloomberg's Mark Gurman has tweeted that the feature will begin...
apple wwdc 2022

Apple Shares WWDC 2022 Schedule, Keynote to Take Place June 6 at 10:00 a.m PT

Tuesday May 24, 2022 9:06 am PDT by
Apple today confirmed that the keynote event for the Worldwide Developers Conference will begin at 10:00 a.m. Pacific Time on June 6, the first day of WWDC. The keynote will be an online-only event, though a select number of developers have been invited to the Apple Park campus for a viewing event. In addition to confirming the keynote date and time, Apple has shared the full WWDC 2022...