Apple Cranks Up Competition on Peloton With New Fitness+ Features
Since it launched late last year, Apple’s Fitness+ service has been taking aim at Peloton’s digital membership service, which has been growing at astronomical rates.
Now, the Mac maker is introducing a slew of new features as it cranks up the competition on Peloton (NASDAQ: PTON), the incumbent leader in connected fitness.
What’s new with Apple Fitness+
Apple Fitness+ uses direct integrations with Apple Watch to help people track their workouts and exercise from home.
Apple (NASDAQ: AAPL) is adding new workout categories for older adults as well as pregnant women. There are also additional workouts related to high intensity interval training (HIIT), yoga, and strength. A handful of new instructors are joining the service.
The pregnancy workouts are designed to help women stay active and prepare for birth. Each workout is 10 minutes, and the exercises cater to different stages of pregnancy.
The new workouts for older users are designed to be simple, requiring just a light dumbbell or no equipment at all.
Earlier this year, Apple debuted a new audio series on Apple Fitness+ called Time to Walk, which features guests sharing stories, music, and other experiences to encourage people to walk more. The company said an upcoming episode will feature actress Jane Fonda.
How Apple Fitness+ compares to Peloton
Fitness+ doesn’t compete directly with Peloton’s All-Access Membership, which requires Peloton equipment such as a Bike or Tread.
Instead, it goes toe to toe with Peloton’s Digital Membership, which is a standalone offering.
At $10 per month, Apple Fitness+ undercuts Peloton Digital’s $13 per month subscription fee. Additionally, Apple Fitness+ can be shared within a family while Peloton Digital cannot, and Apple offers discounts for annual subscriptions. On top of that, Fitness+ is included in the highest tier of Apple One, a bundle of services introduced last year that also includes discounts.
Will Apple’s Fitness+ effort pay off?
Apple has been focused on its services business in recent years, and launching new services has been a core aspect of that strategy. Apple Fitness+ is among the latest of such first-party services. It also furthers CEO Tim Cook’s goal of expanding into the health and wellness industries.
It remains to be seen if Apple can put a dent in Peloton’s growth. Peloton’s digital subscriptions rose 472% in the most recent fiscal quarter to reach about 625,000.
Peloton has said that its digital subscription business is more about customer acquisition than profitability (digital subscriptions carry a lower gross margin). The company is banking on customers who, after seeing what Peloton has to offer, end up buying Peloton equipment and upgrading to an All-Access membership that costs $39 per month.
Apple doesn’t break down its paid subscriptions by service but does report how many total paid subscriptions it has across its platforms for both third-party and first-party services. As of the end of 2020, the company had 620 million paid subscriptions.
With remote exercise and home fitness expected to remain popular even as the pandemic subsides, there could be enough room for both Apple and Peloton to both succeed.
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