Make everyone healthier in the world seems to be a shared vision by different stakeholders in the market, and a key battleground considering the business potential.
Apple has made its digital-services business the centerpiece of its growth plans in recent years, as sales of the iPhone have largely leveled off. “The strategy has worked: services brought in more $13 billion in the latest quarter, or about 22 percent of Apple’s overall revenue.”, according to New York Times. Apple has just launched its latest digital workout service, called Apple Fitness+. It is a fitness subscription service for under 80USD a year, that gives users access to workouts and instruction, plus folds in music… delivered through the Apple Watch or iPad. Apple is now directly competing with offerings from Peloton among others.
Peloton is also booming, with stock value up more than 190% in 2020. Peloton, which won an early celebrity fanbase for its exercise bikes and remote workout classes, has seen demand surge during the pandemic. The firm's global membership base hit 3.1 million at the end of June, more than double a year earlier, as gym closures due to Covid-19 increased demand for at-home workouts. Peloton did also lower its existing treadmill and bike prices in an effort to make their products more accessible. Peloton offers two types of memberships: All-Access and Digital. All-Access memberships cost $39 per month and require Peloton's pricey equipment, while anyone can sign up for a Digital membership for $13 per month.
“Both Apple and Peloton are working hard to grow their subscription businesses. Apple now has over 550 million paid subscriptions across its platforms and is on track to top 600 million by year's end. Peloton hosted its first investor and analyst day yesterday and CEO John Foley laid out an ambitious target to hit 100 million subscribers, compared to the roughly 1.4 million subscriptions it currently has across both membership types.”, according to Evan Niu.
There are other players in the fitness market, in different segments. When it comes to wearables, Fitbit was acquired by Google for around 2.1 billion USD, helping google to spur innovation in wearables. The vision of the company was clear again, make everyone in the world healthier. In 2010 Fitbit sold 58.000 units, but in 2019 almost 16 million! Tonal, a fitness company backed by Amazon and Steph Curry, raises more cash as investors bet on ‘workout from home: 110 million USD. Tonal claims to be the smartest home gym, to get stronger faster using science and technology to help you see real results. Use of artificial intelligence is key here since Tonal learns from your body and tracks your progress in real time.
Health and fitness are key shifts in society, even more thanks to the pandemic. The fitness market is booming, new business models are applied with equipment sales and subscription fees, and people love it. The battle to win millions of subscribers and their data is on!