Peloton halts production of fitness bikes, cites 'significant' loss of demand
Fitness firm Peloton is reported to be temporarily halting production of its bikes and treadmills, citing continued decline in sales since after demand from people working at home peaked.
Peloton Bike
Peloton benefited from the coronavirus with booming sales for its home fitness equipment, but recently blamed Apple for the subsequent downturn. Saying that Apple's App Tracking Transparency privacy hurt sales, Peloton tried dropping the price of its original bike.
Now internal documents seen by CNBC say that a "significant reduction" in worldwide demand means the company will temporarily halt production. The company plans to halt production of its main Bike product from February 2022 to March 2022, and has already halted making the more costly Bike+.
That model was reportedly halted in December 2021, and is not expected to resume production until June. Peloton is also pausing production of its Tread treadmill machine for six weeks, starting in February 2022.
Peloton's move comes ahead of its required financial earnings report on February 8. The company is expected to say that the halting of production is to control costs.
The company reportedly greatly over-estimated its sales predictions and consequently has some thousands of bikes and treadmills in stock. At the same time, it cites "a more challenging post-COVID demand environment," for how fewer people than expected are registering for its strength training product.
Peloton's internal document also says that its financial forecasts do not as yet take into account the impact on demand that it may see over new charges from the end of January 2022. The company intends to begin charging Bike buyers an extra $250 for delivery and setup, and $350 extra for the Tread treadmill.
In December 2021, Peloton unexpectedly had a double-edged sword of being featured in the highly-awaited "Sex and the City" sequel, "And Just Like That." While it was prominently featured in the show, it showed major character Mr Big (Chris Noth) dying while using it.
Peloton very quickly responded with a light-hearted TV ad spot starring Noth which promoted the health benefits of its products. The ad was created and aired within 48 hours -- but was then pulled when Noth was accused of sexual assault.
This story is breaking, update for the most recent information
Read on AppleInsider
Peloton Bike
Peloton benefited from the coronavirus with booming sales for its home fitness equipment, but recently blamed Apple for the subsequent downturn. Saying that Apple's App Tracking Transparency privacy hurt sales, Peloton tried dropping the price of its original bike.
Now internal documents seen by CNBC say that a "significant reduction" in worldwide demand means the company will temporarily halt production. The company plans to halt production of its main Bike product from February 2022 to March 2022, and has already halted making the more costly Bike+.
That model was reportedly halted in December 2021, and is not expected to resume production until June. Peloton is also pausing production of its Tread treadmill machine for six weeks, starting in February 2022.
Peloton's move comes ahead of its required financial earnings report on February 8. The company is expected to say that the halting of production is to control costs.
The company reportedly greatly over-estimated its sales predictions and consequently has some thousands of bikes and treadmills in stock. At the same time, it cites "a more challenging post-COVID demand environment," for how fewer people than expected are registering for its strength training product.
Peloton's internal document also says that its financial forecasts do not as yet take into account the impact on demand that it may see over new charges from the end of January 2022. The company intends to begin charging Bike buyers an extra $250 for delivery and setup, and $350 extra for the Tread treadmill.
In December 2021, Peloton unexpectedly had a double-edged sword of being featured in the highly-awaited "Sex and the City" sequel, "And Just Like That." While it was prominently featured in the show, it showed major character Mr Big (Chris Noth) dying while using it.
Peloton very quickly responded with a light-hearted TV ad spot starring Noth which promoted the health benefits of its products. The ad was created and aired within 48 hours -- but was then pulled when Noth was accused of sexual assault.
This story is breaking, update for the most recent information
Read on AppleInsider
Comments
I'll see myself out.
Personally, I can't justify the cost of such a unit and am quite satisfied with my current stationary bike (at a fraction of Peloton price) while watching Apple Fitness+ on nearby TV.
Additionally, health clubs have re-opened and based on the parking lots that I pass folks are flocking back. Let's face it people are more interested in finding a date than improve their health. Now if Peloton added a social/dating component to their app...just saying.
Yes. This really makes sense. That being forbidden from tracking customers will reduce demand for their bikes and/or subscription service. If they are trying to claim that it diminishes the value of advertising they place, I think they give too much credence to so called targeted advertising. Numbers I've seen show it has only a minor affect on advertising efficiency.
Peloton CEO John Foley was forced to admit the company was wrong to fight the recall request. "We feel like we have some work to do to get back on the right side of the line with trust and safety," he said Thursday, the day after agreeing to the "voluntary" recall.
CPSC: “ Peloton Recalls Tread+ Treadmills After One Child Died and More than 70 Incidents Reported”
I think the kid-and-pet-eating treadmills are a bigger issue than Cupertino.
You can buy a decent bike and a trainer stand for half of what they charge.
And you can use the bike outside too.
We dropped our YMCA membership a year and a half ago when we purchased our peloton. Even including the monthly membership fee we’ll break at the 2 year point. WE both enjoy the peloton classes and more importantly, we use it far more often than we did our Y membership.
Peloton isn’t for everyone and I suspect they’re probably getting close to their maximum market penetration. There are also probably more bikes available used from people who purchased and decided it wasn’t for them.
-- I already have home equipment -- so no reason to buy Peloton's
Gymkit needs to get serious and relying on 3rd parties has always been a drag.
I wouldn’t doubt it if some a-hole company tries to sue Apple for “antitrust” or some other buzzword because of app tracking transparency hurting their dollars.