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
29 months ago
Probably someone with peloton stock trying to raise the price so they can sell.
Score: 68 Votes (Like | Disagree)
User 6502 Avatar
29 months 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
29 months 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
29 months ago
Are Apple considering investing in Coal as well?
Score: 39 Votes (Like | Disagree)
Sciomar Avatar
29 months ago
Peloton does not deserve to get bought out, just needs to go under. Ridiculous business model.
Score: 34 Votes (Like | Disagree)
urnotl33t Avatar
29 months 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)

Popular Stories

reset password request iphone

Warning: Apple Users Targeted in Phishing Attack Involving Rapid Password Reset Requests

Tuesday March 26, 2024 4:34 pm PDT by
Phishing attacks taking advantage of Apple's password reset feature have become increasingly common, according to a report from KrebsOnSecurity. Multiple Apple users have been targeted in an attack that bombards them with an endless stream of notifications or multi-factor authentication (MFA) messages in an attempt to cause panic so they'll respond favorably to social engineering. An...
maxresdefault

Apple to Launch New iPad Pro and iPad Air Models in May

Thursday March 28, 2024 11:07 am PDT by
Apple will introduce new iPad Pro and iPad Air models in early May, according to Bloomberg's Mark Gurman. Gurman previously suggested the new iPads would come out in March, and then April, but the timeline has been pushed back once again. Subscribe to the MacRumors YouTube channel for more videos. Apple is working on updates to both the iPad Pro and iPad Air models. The iPad Pro models will...
Generic iOS 18 Feature Purple

iOS 18: What to Expect From 'Biggest' Update in iPhone's History

Wednesday March 27, 2024 11:10 am PDT by
At least some Apple software engineers continue to believe that iOS 18 will be the "biggest" update in the iPhone's history, according to Bloomberg's Mark Gurman. Below, we recap rumored features and changes for the iPhone. "The iOS 18 update is expected to be the most ambitious overhaul of the iPhone's software in its history, according to people working on the upgrade," wrote Gurman, in a r...
maxresdefault

Apple Announces WWDC 2024 Event for June 10 to 14

Tuesday March 26, 2024 10:02 am PDT by
Apple today announced that its 35th annual Worldwide Developers Conference is set to take place from Monday, June 10 to Friday, June 14. As with WWDC events since 2020, WWDC 2024 will be an online event that is open to all developers at no cost. Subscribe to the MacRumors YouTube channel for more videos. WWDC 2024 will include online sessions and labs so that developers can learn about new...
apple maps 3d feature

Apple Maps May Gain Custom Routes With iOS 18

Tuesday March 26, 2024 3:10 pm PDT by
Apple may be planning to add support for "custom routes" in Apple Maps in iOS 18, according to code reviewed by MacRumors. Apple Maps does not currently offer a way to input self-selected routes, with Maps users limited to Apple's pre-selected options, but that may change in iOS 18. Apple has pushed an iOS 18 file to its maps backend labeled "CustomRouteCreation." While not much is revealed...
General iOS 17 Feature Orange Purple

Apple Releases Revised Versions of iOS 17.4.1 and iPadOS 17.4.1 With Updated Build Number

Wednesday March 27, 2024 5:59 am PDT by
Apple on late Tuesday released revised versions of iOS 17.4.1 and iPadOS 17.4.1 with an updated build number of 21E237, according to MacRumors contributor Aaron Perris. The updates previously had a build number of 21E236. The revised updates are available for all iPhone and iPad models that are compatible with iOS 17 and iPadOS 17, but they can only be installed via the Finder app on macOS...
applephilschiller

Apple's Phil Schiller Works 80 Hours a Week Overseeing App Store

Wednesday March 27, 2024 2:03 pm PDT by
With the App Store and app ecosystem undergoing major changes in the European Union, The Wall Street Journal today shared a profile on App Store chief Phil Schiller, who is responsible for the App Store. Though Schiller transitioned from marketing chief to "Apple Fellow" in 2020 to take a step back from Apple and spend more time on personal projects and friends, he is reportedly working...