The past year has accelerated changes in many industries. The fitness industry was forced to adapt, and new fitness technologies and platforms emerged to fill the void that gyms and gym classes had left. Risk funding for fitness was $ 2.4 billion in 2020, up 100% from 2019 (source: CrunchBase). Given that companies like Peloton and Apple are thriving in tech fitness in both hardware and content, I wonder: is there room for new players in the already overcrowded fitness market?
As we slowly adjust to this new normal The fitness industry faces uncertain challenges. Will people return to gyms or will they continue to enjoy exercising in the comfort of their own home? This could have a huge impact on gyms and home technicians. Will this booming fitness tech space be a winner taking the entire market, or is there room for multiple competitors? What will ultimately be the fate of Peloton and Apple as they battle for the top spot in home fitness? While this is not an easy one to answer, it is interesting to compare two seemingly different companies.
Technology has infiltrated the gym for many years. But we saw an unprecedented change when COVID shut down most of the personal fitness world. Almost instantly, fitness shifted to rely on home technology and app-based content in the pandemic. The immediate winners were those with an established product and online presence. Peloton’s business flourished during the pandemic when fitness enthusiasts looked for ways to stay active without the gym. According to estimates by JP Morgan (source: statista.com), sales in 2020 increased 100% ($ 1.8 million) from 2019 ($ 910,000).
As a fitness enthusiast, I bought myself completely into the Peloton ecosystem: I own a bike and am an avid user of its app and off-bike classes. Peloton’s competitive advantage, in my opinion, is not their technology, but their instructors, who have an extremely loyal following. Peloton instructors have become celebrities, but is that enough to maintain their competitive position in the fitness space? The conversion costs for the app are low, but those who bought treads or bikes have much higher conversion costs.
Since Peloton has been called the “apple of fitness”, It just seems appropriate to evaluate Apple’s place in the tech-fitness race. As much as I consider myself a loyal Peloton rider and subscriber, I truly believe Apple is capable of great things in the fitness space and poses a potential threat to Peloton’s longevity.
Tim Cook announced that Apple will revolutionize health and wellness: If you zoom out into the future and then look back and ask, “What was Apple’s greatest contribution?” it will be in the health and wellness sector “ (Source: Outside Online, 2020).
Apple’s existing health and wellness skills, The Apple Watch in particular, combined with its ability to transform an industry, makes it difficult to rule out Tim Cook’s bold prediction. The Apple Watch is already capturing more than 50% of the global wearable technology market, making any fitness integration with the Apple Watch accessible to a huge audience. Apple’s new Fitness + is powered by Apple Watch and costs $ 9.99 per month, compared to Peloton’s app-only option for $ 12.99. Apple has the ability to become a leader in health and wellness and is already putting those values into practice. I could see this for myself when I visited Apple Park last year. I was surprised that the office didn’t feel like a building version of the iPhone or the office of the future. Instead, Apple Park felt like a quiet retreat full of greenery and surrounded by windows that blur the lines between inside and outside.
Ultimately, Peloton focuses on the personal relationship it builds with its customers and the communities it forms – Peloton uses data to ensure the optimal fitness experience for all fitness levels. Apple, on the other hand, is a hardware company that is not used to this type of interaction with its customers. Apple’s challenge will be to deliver a personalized fitness experience that rivals Peloton’s key competitive advantage, its employees.
I have come to believe that there is no reason Apple cannot go along and compete when a company is referred to as the “Apple of anything”. Peloton may need to be on guard … Apple may just be the next “Apple of Fitness”.
Source: Apple / Peloton