Peloton taps Apple suppliers in major production shift
Peloton is switching gear to try and cut its costs, with a plan to use Apple's suppliers and other external firms to construct its fitness products rather than relying on its own factories.
![](https://photos5.appleinsider.com/gallery/49400-96547-46912-91434-Peloton-Feature-Image-xl-xl.jpg)
Peloton has been struggling to keep costs down amid talks of a potential buy-out or investment from a major company like Apple or Amazon. In its latest bid to reduce its outgoings, the firm is apparently turning to companies that work with Apple in assembling products.
Instead of splitting manufacturing between its own facilities and partners, Bloomberg reports it will stop production at facilities acquired in 2019 in favor of relying solely on third-party firms. Work performed by facilities operated by subsidiary Tonic Fitness Technology will instead be solely performed by existing partner Rexon.
"We are going back to nothing but partnered manufacturing," said Peloton chief supply chain officer Andrew Rendich. "It allows us to ramp up and ramp down based on capacity and demand."
Rendich reckoned that having dual supply chains required more resources, and so a simplification to an external-only approach could both cut costs and improve product quality.
Along with going down the same route as Apple for its main manufacturing efforts, Peloton is also working with firms that exist in Apple's supply chain. It already works with Quanta Computer on touch screens for its workout devices, but it's also tapping Pegatron Corp for its rowing machine.
The shift in strategy is the latest move by Peloton to try and improve its standing. After financial woes resulted in reports it was a potential acquisition target, the fitness equipment maker then moved to right the ship.
This included a major shakeup in February involving a new CEO and the laying off of 2,800 employees, and in April, a considerable cutting of prices on hardware at the same time as increasing subscription fees.
Read on AppleInsider
![](https://photos5.appleinsider.com/gallery/49400-96547-46912-91434-Peloton-Feature-Image-xl-xl.jpg)
Peloton has been struggling to keep costs down amid talks of a potential buy-out or investment from a major company like Apple or Amazon. In its latest bid to reduce its outgoings, the firm is apparently turning to companies that work with Apple in assembling products.
Instead of splitting manufacturing between its own facilities and partners, Bloomberg reports it will stop production at facilities acquired in 2019 in favor of relying solely on third-party firms. Work performed by facilities operated by subsidiary Tonic Fitness Technology will instead be solely performed by existing partner Rexon.
"We are going back to nothing but partnered manufacturing," said Peloton chief supply chain officer Andrew Rendich. "It allows us to ramp up and ramp down based on capacity and demand."
Rendich reckoned that having dual supply chains required more resources, and so a simplification to an external-only approach could both cut costs and improve product quality.
Along with going down the same route as Apple for its main manufacturing efforts, Peloton is also working with firms that exist in Apple's supply chain. It already works with Quanta Computer on touch screens for its workout devices, but it's also tapping Pegatron Corp for its rowing machine.
The shift in strategy is the latest move by Peloton to try and improve its standing. After financial woes resulted in reports it was a potential acquisition target, the fitness equipment maker then moved to right the ship.
This included a major shakeup in February involving a new CEO and the laying off of 2,800 employees, and in April, a considerable cutting of prices on hardware at the same time as increasing subscription fees.
Read on AppleInsider
Comments
Here’s a bigger picture:
Apple could use “2nd party”* equipment to market not only to homes but gyms across the globe. GymKit is pretty much dead. Apple equipment can revive it and will be a selling point to get into the Apple eco-system.
*”2nd party” is a term I use to describe a company within a company like Beats to Apple. I don’t think I’d want Peloton to change their name to “Apple”.
Anyways…
The added content would make it similar to the Beats acquisition. Add Watch and Apple’s OSes support. Done. Now you have twice as much content on your Fitness+ subscription.
I don’t wanna see another Amazon Alexa situation where Apple lost because they didn’t have 1st party products. With Peloton losing value fast, it’s the best time for Apple to swoop in and take them
Edit:
Just looked up GymKit on YouTube to make sure I wasn’t crazy and maybe it was gaining traction somewhere and the first video that showed up was titled “Is the Apple GymKit dead”.
I ran across this comment that further proves Apple needs to get their sh** together here.
Your 2nd paragraph was already addressed in my post.
Apple automatically having a high-end, high-tech catalog of exercise equipment to ship will help them get into gyms across the world and make GymKit relevant.
Long term, GymKit will widen the Apple halo effect and ecosystem. Imagine coming back from the gym and all your workouts and steps, heart rate etc. are logged in? Even if your iPhone and Watch die, GymKit will still keep count of your treadmill steps.
I never said home use would be first, taking over fitness as a whole is first and most people don’t buy fitness equipment for home use, that’s what the gym is for.
Again, these are things people aren’t thinking of. People think Apple will just acquire a warehouse of junk no one wants. And again, if Amazon scoops them up we’ll have another Alexa situation where the innovator is losing to the platform that owns the equipment.
why buy into that hurt when you could do a different approach?
promotion of GymKit? Why would they need peleton to promote that? They could just much more cheaply provide incentives for mainstream fitness equipment manufacturers. That would create a faster network of GymKit compatible equipment.
The idea of providing incentives to fitness manufacturers sounds good in theory but a lot of gyms (Planet Fitness) are perfectly happy with outdated decades old equipment. Apple could lease machines and upgrade to the latest while arguing why it’s cheaper. (Just a thought).
Back when Peloton was taking over the market I suggested Apple buy Life Fitness or Nordic Track to combat them. They were cheap compared to what Apple has hoarded. Now that Peloton is on hard times I can definitely see a good opportunity to buy.
The problem with other fitness machines is that they’re stuck in 2005. Peloton is a forward thinking company as far as tech goes.
The fact there’s videos about GymKit being dead and users saying GymKit can go F itself should be alarming.
With Peloton, Apple gets a (late) head start on GymKit and 2.3M Fitness+ subscribers. Peloton’s subscription is $44/month. Bet your a** that 2.3M Peloton number will jump 50-500% when it gets swallowed into Fitness+ with MORE content for only $9.99/month. Apple One will also start looking more enticing to people who own Peloton equipment but abandoned the subscription because of cost.
Peloton subscription $44/month
Apple One Premier $29.99/month
now with Peloton support, hours of new Fitness+ content and 34 new instructors!
If Amazon buys Peloton, there goes another market Apple will exit from.
This sounds like an excuse for bad management - an inability to ensure quality of production from Tonic.