Apple’s Potential Acquisition of Peloton Gains Momentum in Market Speculation. The tech industry is abuzz with renewed speculation that Apple may acquire Peloton, a rumor that had surfaced a couple of years ago. This time, the rumor gains credibility from a more authoritative source: Deepwater Asset Management. Led by well-known former technology analyst Gene Munster, the investment company’s predictions have had a strong track record, hitting the mark on 8 out of 10 forecasts last year. This lends weight to the possibility of Apple completing this acquisition by 2024.
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Deepwater Asset Management suggests that Apple’s intent in acquiring Peloton would be to bolster its fitness segment. The addition of Peloton’s fitness equipment would complement Apple’s existing products like the Apple Watch and the Health app. With Peloton’s subscriber base of around 3 million users, the acquisition could significantly boost Apple’s subscription revenue, aligning well with the tech giant’s focus on health and wellness.
A Familiar Rumor Resurfaces
This isn’t the first time Apple’s interest in Peloton has been discussed. Previously, Professor Scott Galloway had predicted that Apple could acquire the exercise bike company, a move that could potentially grow the business to $20 billion by 2030, compared to Peloton’s expected $5 billion revenue in 2022.
Understanding Peloton
Peloton Interactive, known for its high-end, Internet-connected exercise bikes and treadmills, offers subscribers a range of streaming workout programs. However, the company has faced challenges recently. There was a “significant drop” in demand leading to a halt in production, and its stock value has been declining.
Peloton’s Market Value and Strategic Fit with Apple
At the time of the initial rumors, Peloton was valued at $12-15 billion. Adding Peloton to Apple’s portfolio appeared strategically sound, especially for bolstering Fitness+ subscriptions and Apple Watch’s health monitoring system. Peloton experienced a sales surge during the COVID-19 pandemic as people shifted to at-home workouts. However, post-pandemic, the company struggled to manage growth, with sales plummeting by 23% in 2023 and an alarming 96% compared to 2021 numbers.
Evaluating the Acquisition
With this backdrop, questions arise about the wisdom of acquiring a company that has seen minimal growth in recent years. What makes Peloton an attractive acquisition for Apple? Is it the sizeable subscriber base, the extensive library of workout content, or does Peloton have other hidden assets that could be revealed post-acquisition?
As the tech community eagerly awaits further developments, this potential acquisition could mark a significant expansion of Apple’s footprint in the health and fitness domain. Whether this deal will materialize and how it might transform Apple’s business strategy remains a topic of keen interest and speculation.
