The Sellers Research Group (that’s me) still says Apple ain’t gonna buy Peloton, but the rumors persist.
Deepwater Asset Management — headed by former tech analyst, Gene Munster —last week announced their 2024 predictions, which included the prediction that in 2024 Apple will finally acquire Peloton.
As noted by Connect the Watts, even though analysts consistently predict this acquisition, the notable difference with Deepwater Asset Management is that last year, 8.5/10 predictions from Deepwater were accurately predicted – in other words, this would be a list to watch. The Apple-acquiring-Peloton prediction is as follows:
“Apple will look to bolster their workout segment in 2024 by adding fitness equipment to compliment the Watch and fitness tracking software. Peloton has a loyal subscriber base of about 3 million users that will add about $1.7B to Apple’s subscription revenue, additionally this fits well into Apple’s continued investment in health and wellness.”
This forecast isn’t new. A May 2022 report from Bloomberg claimed that Peloton is looking for a major company like Apple or Amazon to buy a stake of around 20% in its business in an effort to improve the company’s fortunes amid dwindling demand for its products and fierce competition from services like Apple Fitness+.
A January 2022 article from The Information said the suspension of Peleton’s bikes and treadmills at the time “feels like the prelude to an acquisition of the troubled fitness equipment maker” and that “surely Apple must be the obvious buyer if it comes to that.”
Per The Information: If Peloton is to have a future, it would be better off as part of a bigger, more diversified company. Apple is an ideal candidate to take on that project. It has the Fitness+ subscription service for classes and it markets the Apple Watch as a device that can help with jogging and other exercise activities. It could close Peloton’s stores and sell the equipment through its own stores. And hey, after today, Peloton’s market capitalization is down to $7.9 billion. Cook could pay for that by dipping into the change jar in his kitchen.
Yes, Apple could certainly afford to buy Peloton. However, the company already makes computers, tablets, smartphones, smartwatches, smart speakers, accessories, and is working on the Vision Pro and, perhaps, an Apple Car.
I think the last thing the company needs is to add bikes, treadmills, and other fitness equipment to its repertoire. The company is already in danger of trying to compete in two many categories.
