New York-based exercise equipment company Peloton is facing a new competitor - technology company Apple. Peloton's share price went into reverse on the news with investors expecting Apple could race away with a big chunk of the trending at-home fitness market.
Peloton's share price skidded as much as 4 percent in premarket trading Thursday. It recovered to end the day 2 percent off the pace at $65.65 per share. News broke that Apple was developing a new subscription-based service that would offer streaming fitness classes on all of its devices. Bloomberg reported Apple would make the new service available to its iOS, macOS, and Apple TVOS users.
Based on the initial details of Apple's reported plan it will likely be similar to services currently offered by both Nike and Peloton. Both offer streaming workout classes such as yoga, pilates, HIIT training and aerobics to subscribers for a fixed monthly price.
The service became a hit during the onset of the pandemic in the U.S. after gyms nationwide were forced to close. Prices are also significantly lower than old-fashioned gym memberships and subscribers can transition between different classes as they wish.
Peloton, which began as a Kickstarter-funded company in 2012, instantly became an industry leader. The company sold thousands of its touchscreen-equipped stationary bikes and treadmills earlier in the year - generating big profits for the company. Since the start of the year the company's stock price has risen more than 120 percent.
But Apple could end up overshadowing Peloton thanks to its much wider media offerings, according to Bloomberg. It said Apple could launch a family-bundle service tentatively called "Apple One." It would combine its digital services for a discounted monthly fee. Apart from offering its reported new at-home fitness streaming service, Apple could also bundle its Apple TV+ and Apple Music into one package. Other digital services such as gaming, news and cloud storage services could also be thrown in.
Apple hasn't officially issued a statement. However, the company said it was planning to expand its digital services in coming years. Apple chief executive Tim Cook said in the company's latest earnings report that its services revenues are growing and these accounted for about 15 percent of total revenues.
