Apple is expected to make a strategic acquisition in the fitness segment this year, with longtime Apple analyst Gene Munster predicting that the tech giant will acquire Peloton. Munster believes that Apple will look to enhance their workout offerings by incorporating fitness equipment to complement their Apple Watch and fitness tracking software.
Peloton, a connected exercise-and-fitness company, has a loyal subscriber base of approximately 3 million users. Munster estimates that the addition of Peloton’s subscribers could bring around $1.7 billion in subscription revenue to Apple. This acquisition aligns well with Apple’s ongoing investment in health and wellness.
Munster points out that Apple has been emphasizing its commitment to health for several years, and the addition of Peloton’s user base would significantly contribute to their fitness initiatives. Currently, Apple has a fitness product that is not widely used, so the acquisition of Peloton presents a valuable opportunity.
The speculation of an Apple-Peloton deal is supported by the synergy between the two companies. Both Apple and Peloton offer a combination of hardware, software, and services. If Apple were to acquire Peloton, it would likely be with the intention of discontinuing the bikes and treadmills and transitioning Peloton subscribers to Apple Fitness+ with the use of Apple Watches, iPhones, iPads, and Apple TVs.
The potential acquisition of Peloton could have a substantial impact on Apple’s subscription revenue. Maintaining Peloton’s user base would result in an increase of approximately 11% in Apple’s subscription piece. This move would further expand Apple’s subscription-based business model, which has been a focal point for the company.
Apple CEO Tim Cook previously expressed that Apple’s greatest contribution to humanity would be related to health. With this in mind, an acquisition of Peloton by Apple seems to be a logical step toward realizing this vision. The combination of Peloton’s fitness expertise and Apple’s technological prowess could result in a powerful and comprehensive fitness offering for consumers.
In conclusion, industry analyst Gene Munster predicts that Apple will acquire Peloton in 2024 to strengthen their fitness segment. This acquisition would provide Apple with access to Peloton’s large and devoted subscriber base, contributing significantly to Apple’s subscription revenue. By integrating Peloton’s fitness equipment and expertise with their existing product lineup, Apple can further solidify its position in the health and wellness market.
