What HappenedAs Apple treads further into fitness, it could help Peloton, but doing so would be an “unnecessary and pricey headache for Apple,” said Gurman.
The journalist who focuses on the Tim Cook-led company broke Peloton into two components—hardware and software.
Apple will not gravitate towards Peloton’s hardware as the company’s products such as stationary bicycles and treadmills are expensive to manufacture and have low margins, they are also heavy and costly to ship, and their upgrade cycles do not match those of Apple’s own offerings, as per Gurman.
The iPhone maker also doesn’t need Peloton’s technology, according to Gurman as it has its own software like Fitness+.
“Peloton has been lauded for its patent portfolio, but I don’t believe Apple would need a single Peloton innovation to successfully compete,” said Gurman.
Why It MattersGurman said in his newsletter that Peloton “botched its sales predictions” throughout the COVID-19 pandemic, while Apple is “the master of the supply chain and likely wouldn’t have made the same mistakes.”
On content, Gurman said that the Fitness+ catalog has grown over the past year and while it is smaller than that of Peloton, it would be “cheaper for Apple to invest more in creating its own material than to make a Peloton deal.”
The analyst said even with Peloton stock’s decline its market value is above $8 billion, while Apple’s largest deal to date, the Beats takeover was undertaken for $3 billion in 2014.
Pointing to the fact that the tech giant needed to expand its fitness product line—Gurman called Apple taking over Peloton “wishful thinking,” adding that “I don’t think acquiring Peloton is the solution.”
Nike Inc. topped the poll with 48.3 percent of those voting saying the sneaker giant should take over the ailing stationary bike company. Alphabet Inc. unit Google came in third with 21.1 percent of the votes.