Will Apple Buy Peloton?
As the home exercise company faces trouble, Apple is being mentioned as a potential buyer.
Over at MacRumors, Hartley Charlton has an intriguing piece that goes into the recent struggles that home exercise brand Peloton has been experiencing, and rounds up some financial press speculation that Apple could be an ideal company to purchase Peloton. Here’s an excerpt from a piece over at The Information titled, “Why Apple Will Buy Peloton.” (The article is behind a paywall, so this snippet is courtesy of the MacRumors piece.)
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.
Juicy click-bait headline aside, I’m skeptical that Apple would buy Peloton. I do agree with the first sentence in that quote though. Peloton seems like an ideal acquisition target, even if they weren’t currently struggling as a company. They have a strong brand name, but they have limited avenues to grow due to how specialized their product is. It feels very similar to Fitbit. I had long been expecting someone to snap up Fitbit. Like Peloton they had built up a strong brand, but what they offered was quickly being made a component of smart watches and smart phones. (Eventually Google did buy Fitbit.) Another reasonable parallel: Flip Video. Remember the Flip Camera? This tapeless camcorder debuted in 2006 and was a massive hit. The problem was that 2006 was the year before the iPhone debuted, and although the iPhone wouldn’t get the ability to record video until the iPhone 3GS arrived in 2009, the writing was on the wall. Video recording became a feature of the smart phone. Flip was bought by Cisco and few even remember it any more.
It wouldn’t at all surprise me to see Peloton go this route, I’m just skeptical that Apple would be interested in purchasing them. For one thing, Apple probably could have purchased Peloton a year or two ago. Instead they decided to build their own video fitness class service, Apple Fitness+, built around Apple Watch. Similarly, people had been advocating for Apple to buy Netflix for years. Instead, Apple decided to build its own Netflix with Apple TV+. I’m not sure that Apple has much to gain from acquiring Peloton’s workout classes service.
“Ok,” you say. “But what about the Peloton bikes?” This is certainly the biggest point in favor of the view that says it makes sense for Apple to buy Peloton. If they did, I can’t see them simply rebranding the bikes with Apple’s name. If Apple does buy Peloton, I see them keeping it around as a second-party brand, the way Apple has with Beats. Apple owns Beats entirely, but it runs it as a separate family of products without the Apple name anywhere on them.
And while it would give Apple the ability to have their own bikes and treadmills for use with Apple Fitness+, I’m just not sure Peloton offers enough to get Apple to shell out the money. They’d also have to deal with shuttering Peloton’s retail stores as well. I’ll happily eat crow if Apple does buy Peloton, but I’m just not sure it feels like something Apple would do.