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Aug 17

Peloton CEO wants to redesign bikes so you can assemble them at home – The Verge

Coming on the heels of a third round of layoffs, Peloton is now considering redesigning its bikes so that users can assemble them independently. CEO Barry McCarthy is also considering a plan that would let Peloton app subscribers potentially view workouts on third-party workout machines. McCarthy told Bloomberg that Peloton has been working on a bike redesign for a while and, to top it all off, said he hopes Pelotons long-awaited rower might debut sometime this holiday season. He also confirmed the company hasnt fully given up on the Tread Plus.

All of this tracks with comments McCarthy made in May during the companys Q3 2022 earnings. At the time, he floated the idea of potentially changing hardware designs so that in the future Peloton equipment would be designed to arrive at a customers home in one piece. Right now, Pelotons treadmills and bikes require white-glove delivery in separate pieces, with a crew that comes to your home and builds yours for you. The service used to be free, but Peloton began charging an additional $250$350 fee at the end of January.

The move is part of Pelotons ongoing restructuring plan, which aims to reduce the companys costs and improve cash flow. On Friday, Peloton announced it was cutting more than 500 jobs related to last-mile deliveries and product distribution. The company also noted it was raising the cost of its Bike Plus and Tread while shuttering retail locations in 2023. Making it so that customers can assemble their own equipment would mean the company can simply ship devices via FedEx which is a move that rowing rival Hydrow recently implemented with its slimmer, smaller Hydrow Wave rower.

Since taking over in February, McCarthy hasnt shied away from sharing novel ideas on how to turn around Pelotons flailing financial fortunes. Money saved from Fridays cost-cutting measures will purportedly be funneled back into Pelotons R&D as well as marketing efforts. That includes marketing Pelotons standalone app, which McCarthy identified as historically receiving little to no promotion. That dovetails with other plans the CEO divulged to Bloomberg, including potentially allowing Peloton users to stream classes on third-party workout machines. McCarthy also noted the company may tweak the apps subscription strategy toward a freemium model where some features arent locked behind a paywall.

That strategy is similar to what Apple currently does for its Fitness Plus service, which doesnt require the use of an Apple-branded exercise machine. Instead, people can use their own devices to stream Fitness Plus classes while using rowers, treadmills, and bikes at their local gym. The main difference is that Apple still requires users to own a minimum of an Apple Watch and iPhone to access Fitness Plus.

But while McCarthy seems keen to pivot toward services, it seems like hardware still has a role to play in Pelotons business. For instance, the company is gearing up to launch a rower, potentially this holiday season. The rower was perhaps the worst-kept secret in connected fitness until it was confirmed earlier this year at Pelotons annual Homecoming event for subscribers.

More surprisingly, McCarthy hinted that the company was hoping to relaunch the Tread Plus, which was recalled last year after causing several injuries and the death of a small child. While both its Tread and Tread Plus machines were recalled, the Tread was later approved for sale toward the end of 2021. The Tread Plus, however, remains out of circulation. In Q3, the company also noted that returns of the high-end treadmill were higher than anticipated, costing the company $18 million. According to McCarthy, relaunching the Tread Plus is entirely dependent on the government clearing it for sale. Its possible that while Peloton hasnt given up hope on the Tread Plus, its not something that its banking on either. On Friday, part of the rationale for hiking up the price of the affordable Tread by $800 was to position it as a superior device and boost Pelotons premium image.

Another interesting tidbit is that Peloton may be preparing to expand its One Peloton Club leasing pilot. The program bundles together the cost of the bike and classes into a single $89 monthly fee. The pilot has thus far been successful for the company, with McCarthy saying in May that the program had mass market appeal as 53 percent of signups came from households with incomes under $100,000.

Peloton is expected to hold its Q4 2022 earnings call later this month on August 25th, and well likely find out more about which plans will stick then. So far, Pelotons restructuring efforts have been off to a slow start, and Wall Street investors have seemed skeptical overall.

See the article here:
Peloton CEO wants to redesign bikes so you can assemble them at home - The Verge

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