Benzinga | Dec 28, 2021 10:53AM EST

How Does Peleton Stack Up Against Apple?

An analyst argues that high-tech exercise bike and treadmill company Peloton Interactive Inc (NASDAQ:PTON) is struggling to compete with Apple Inc (NASDAQ:AAPL) today, 9 to 5 Mac reports.

* The analyst sees things going to get more challenging in the future. Peloton initially looked to have a successful Apple-like business model: sell expensive hardware, then use that hardware to generate recurring subscription income.

* But Neil Cybart tweeted that this model is already falling apart as the expensive bikes were not the primary revenue stream. It was always the subscription income from online classes.

* The big problem here is that Apple Fitness+ and other services are now competing, with a model which doesn't require any bulky and expensive hardware.

* Apple, Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, Meta Platforms Inc (NASDAQ: FB) are also building their health platforms.

* Apple is the clear leader with Apple Watch, Fitness/Health apps, Apple Fitness+.

* Peloton is unable to compete with Apple on price. Apple Fitness+ is free when thinking of the Apple One bundle. That makes Peloton's $13/month digital classes a hard sell.

* The analyst thinks Peloton will not be able to compete with Apple's wearables strategy either.

* Peloton is on track to be a Fitbit 2.0, a company unable to compete with the giants subsidizing health and fitness tracking as an ecosystem feature.

* Price Action: PTON shares traded lower by 1.48% at $36.17 on the last check Tuesday.