Apple Fitness+ could be a gateway drug for Peloton’s bike or treadmill, but it also take aim at a massive part of their business: the Peloton Digital Subscription.
Apple Fitness+ is a new subscription service for virtual classes. The service will be available directly on the Apple watch as well as iPhones, iPads and the AppleTV. Access will cost you $9.99 a month or $79.99 a year and you’ll get 3 months free with a new Apple watch. Fitness Plus will also come bundled with the Apple One Subscription. This is a huge base and ecosystem that now directly competes with Peloton.
Peloton like Apple, sells a lifestyle and it has two main types of customers: those who have the Bike or Treadmill, “Connected Fitness” and those who use have a digital subscription.
Buying Peloton’s hardware comes with a big pricetag 2,200 to 4,300 add on top of that the $39 monthly fee. The Peloton Digital Membership is 12.99 a month.
When you take a look at the numbers in Q3 the Motley Fool notes that digital services accounts for only 1% of total revenue in Q3. The biggest potential of the Digital Members was their potential conversion to connected fitness subscribers.
|Subscriber||Fiscal Q3||Growth (YOY)|
So it would seem that Apple might be taking a piece of Peloton’s pie, but it is likely to only bolster sales of their bike and treadmill.
The other reality is that Fitness Plus is not likely to have a competitive product. Peloton has been growing their team, adding instructors and evolving quickly to meet the unique demands of fitness during a pandemic. Apple is just starting out and Peloton has been working for years are creating a lifestyle community.
The only way that Apple’s Fitness+ would be able to take on Peloton is if they partnered with companies or startups that made bluetooth connected workout equipment. The whole thing could fail, but it could also NOT fail in a big way. We’ll have to wait and see if Fitness+ is just another subscription service or if they have wider ambitions.