Peloton Turning to Apple Suppliers After Failing to Find a Buyer

Peloton is switching to Apple suppliers like Quanta and Pegatron as it attempts to turn its business around, Bloomberg's Mark Gurman reports.

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Peloton will no longer produce its bikes and treadmills at its own factories and rely solely on manufacturing partners in a desperate attempt to simplify its operations and reduce costs, according to the report. Apple supplier Quanta already provided touch screens to Peloton, but now the company is adding iPhone assembler Pegatron to its supply chain to build its upcoming rowing machine as it attempts to mirror more efficient supply chain models.

Earlier this year, Peloton was looking for an investor like Apple to buy around 20 percent of the company in an effort to improve its fortunes amid dwindling demand for its products and fierce competition from services like Apple Fitness+. Following months of bleak news about Peloton's "precarious state" as demand for the company's products dried up, including the revelation that it had temporarily halted production of its bikes and treadmills, Apple was repeatedly floated as a potential buyer of the troubled fitness business at the start of this year. Even so, Apple has shown no interest in acquiring a stake in Peloton.

Analyst Neil Cybart previously highlighted how Peloton is now actively threatened by Apple Fitness+, not least because it is considerably cheaper, costing up to $388.01 less annually for digital classes alone. Cybart cautioned that without major changes this year, "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."

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Top Rated Comments

StudioMacs Avatar
26 months ago

So what does that company even do then?
Charge a monthly subscription fee.
Score: 7 Votes (Like | Disagree)
GadgetBen Avatar
26 months ago
I have the bike and a tread. Quality equipment, which Apple don't have.

Their live classes are much more engaging, motivating and interactive than the prerecorded videos that Apple churn out. There are many global fitness groups now, and we coordinate and attend classes together. Peloton really are THE best global digital gym.
Score: 7 Votes (Like | Disagree)
archi penko Avatar
26 months ago
The most amazing part about peloton is the app. It changed my fitness life. I don’t care for and will probably never bother with any of the hardware. And you don’t need any of the hardware to use the app. I don’t want a tread or machine or any other. I prefer the outdoors.

The app, the instructors, the lessons, the variety, content is absolutely amazing. Far far better than Apple Fitness. Or any other competition.

$13 USD a month better than a Netflix subscription

Why they don’t double-down on advertising the app is beyond me. More users here will be like the iPhone is to the Apple ecosystem. Some users will convert & buy in.
Score: 6 Votes (Like | Disagree)
TonyC28 Avatar
26 months ago
"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."

I’m not sure this is correct. Apple Fitness+ is a competitor to Peloton’s app but it’s not a matter of ecosystem as Apple isn’t producing fitness hardware. Peloton’s problem is they sell an expensive bike and to use that bike’s full features you need to pay a fairly steep monthly fee.
Score: 6 Votes (Like | Disagree)
Christoffee Avatar
26 months ago
Am I right in thinking that once Peloton stop supporting their machine they are useless? And now they are saying that they are struggling. Which means no one will buy their machines in case they go bust, so they will go bust.
Score: 6 Votes (Like | Disagree)
jmgregory1 Avatar
26 months ago

For those who have bought Peletons' pricey equipment, I hope they continue to see a value in the product.
I love my Peloton Bike. It’s helped me get physically fit (which has also significantly improved my mental state), on my schedule, without injury which is key given my age (55). For more than a year, I was riding 6 days a week, but this year with going back to the office for work, I’ve cut it down to every other day. It’s been a good value, compared to a gym membership, and my wife and kids (when they’re around) can ride it too, just for the cost of a pair of biking shoes. Peloton should absolutely be looking for production partners, following Apple’s lead in developing their own products and having other companies handle the manufacturing.
Score: 4 Votes (Like | Disagree)