Apple-Peloton Deal Rumors Gain Traction but Hurdles Remain
A deal for Peloton would turn Apple Fitness+ into one of the largest connected fitness services globally, but there are reasons for skepticism
Predictions that Apple will buy Peloton are on the rise, a deal that could upend the entire fitness industry. Deepwater Asset Management included the deal on its list of 2024 predictions. The firm, founded in 2017 by Gene Munster, correctly predicted Apple’s explosive success years before the iPhone and its launch of Apple TV six years before its announcement. In 2023, the firm correctly predicted almost all of its 10 predictions, including that Apple would unveil its mixed-reality (MR) headset later that year.
Peloton, a connected fitness giant, has over 2 million subscribers and a community of nearly 7 million members. While Apple has remained tight-lipped about the number of Fitness+ subscribers, many believe the newer service has a smaller market share than many other big players. A deal for Peloton would propel Fitness+ into becoming one of the largest connected fitness services globally.
Reasons To Believe
Apple has long been dedicated to health and wellness, with Apple Watch revenues likely close to $20 billion According to recent estimates. In 2019, CEO Tim Cook stated, “I do think, looking back, in the future, you will (hear): Apple’s most important contribution to mankind has been in health.”
Peloton’s services would dovetail well with Fitness+, adding live classes to Apple’s pre-recorded videos, and absorbing Peloton’s subscribers could add more than $1.5 billion to Apple’s subscription revenue. Peloton currently runs on Android, but switching its systems over to iOS would likely not be a difficult transition.
Reasons for Skepticism
However, some experts, like William Gallagher at Apple Insider, note many factors weighing against the potential deal. Apple might not want to take on the potential liability from Peloton’s lawsuits regarding fatal treadmill accidents, or pay the deal’s steep potential cost, which could be as high as $9 billion. That amount would be more than three times any other acquisition that Apple has made after the tech giant paid $3 billion in 2014 to acquire headphone maker Beats.
After Peloton’s recent struggles, some analysts doubt that Apple would want to make such a deal.
Not the First Apple-Peloton Rumors
In 2022, Apple was rumored to be a potential buyer of Peloton amid the connected fitness company’s financial difficulties after the resurgence of in-person workouts post-pandemic. Peloton recently unveiled a major rebrand, designed to broaden its fitness content offerings while attracting “more male, Gen Z, Black, and Latin X groups than before the relaunch,” CEO Barry McCarthy stated.
As part of its new strategy, Peloton has inked new partnerships with Lululemon, Liverpool Football Club, the University of Michigan, New York Road Runners, and the NBA and WNBA. The Apple acquisition could usher in a new era of growth and a new chapter for the connected fitness company.
Apple, meanwhile, made major fitness moves in 2023, like the launch of Apple Watch Ultra 2, which has the brightest display yet and a new watch face that shows data like altitude, depth or seconds along its outermost edges. The company partnered with Anytime Fitness and Gympass to offer free memberships to users, demonstrating the tech giant’s commitment to expanding its audience for Fitness+. Anytime Fitness has over 5,000 locations in more than 50 countries, while Gympass has over 15,000 corporate clients with more than two million employees globally.
Earlier this week, Apple Fitness+ also added new strength workouts for golfers and new “Time to Walk” episodes featuring celebrities like Al Roker and Common, among other content additions to celebrate the new year.