Peloton is embarking on a significant strategic transformation, announcing a comprehensive overhaul of its product lineup, the launch of a new commercial equipment division, and increased pricing across both its hardware and subscription services. These bold moves are designed to rekindle growth and capture a larger market share as the crucial holiday shopping season approaches.
The upgraded consumer product range boasts enhanced audio capabilities, more powerful processors, and improved WiFi connectivity across all machines. Its premium "Plus" line, in particular, will feature an advanced AI-powered tracking camera, superior integrated speakers, a 360-degree swiveling screen, and hands-free voice control, among other innovative additions designed to enrich the user experience.
According to CEO Peter Stern, this refreshed "cross-training series" aims to guide members towards a holistic wellness approach, emphasizing the benefits of combining cardio and strength training with practices like yoga and meditation. He stated that all new products are engineered to facilitate this multi-disciplinary fitness journey.
This marks Peloton's first complete product relaunch since its inception and comes after a period focused on financial restructuring, debt refinancing, and achieving free cash flow generation. The company is now pivoting back to product innovation, hoping a more compelling offering will attract a broader spectrum of new members and re-engage existing ones.
Stern acknowledges the higher price point of the new products but asserts they deliver significantly more value by integrating both strength and cardio solutions. With the holiday season typically accounting for over 60% of annual unit sales, the coming months will be critical in assessing the impact of these changes on new customer acquisition and existing member engagement.
The shift reflects a growing trend among fitness enthusiasts who increasingly seek routines that blend cardio and strength. Peloton's original machines, with their stationary screens and less fluid transitions between class types, often presented a challenge in this regard.
Nick Caldwell, Peloton's Chief Product Officer, highlighted how the revamped assortment directly addresses these common user frustrations. During a presentation at Peloton's New York City studio, Caldwell showcased the integration of the largest swivel screen across the entire Plus line, offering 360-degree movement for seamless transitions from cardio workouts to strength, yoga, or mobility exercises. He also introduced voice control, allowing users to adjust weights, skip moves, or pause without fumbling for buttons.
These advancements come with an expected price increase, a move that analysts on Wall Street have largely anticipated. Most hardware units will see price hikes of several hundred dollars, alongside increases in membership fees. The All-Access membership will rise from $44 to $49.99 per month, App+ from $24 to $28.99 a month, and App One from $12.99 to $15.99 monthly. For instance, the original Peloton Row, previously $3,295, will be succeeded by the new Row+ at $3,495.
Peloton's journey has seen its priorities evolve. Earlier challenges included product safety concerns and profitability issues stemming from the high manufacturing costs and limited consumer reach of its machines. Under former CEO Barry McCarthy, the company attempted to shift focus to its app, a strategy that did not yield the desired growth. Now, with Peter Stern at the helm (co-founder of Apple Fitness+ and former head of Ford’s subscription services), the emphasis is on upgrading hardware to perfectly complement Peloton's diverse array of class types.
Beyond its direct-to-consumer business, Peloton is also venturing into the commercial sector with a new line of more robust equipment. The "Peloton Pro Series" includes commercial-grade versions of its Bike+, Tread+, and Row+, specifically designed for higher-frequency use in settings like hotels, apartment complexes, corporate wellness centers, and country clubs.
The commercial arm of Peloton has seen gradual expansion through partnerships with various institutions and is currently one of the company's fastest-growing segments, according to Dion Camp Sanders, Peloton's Chief Commercial Officer. Previous criticisms regarding the durability of Peloton's consumer equipment in high-traffic gym environments spurred the development of this specialized lineup. The company has also consolidated its commercial offerings by integrating Precor, the fitness equipment firm acquired in 2020, into a unified commercial business unit.
Camp Sanders emphasized the unique proposition this creates, combining Peloton's aspirational software and content experience with Precor's reputation for reliability, durability, quality, and comprehensive service and repair capabilities.
Despite a recent dip in overall company revenue, the commercial business unit has already achieved year-over-year growth and is projected to contribute a growing percentage to Peloton's total revenue. Moreover, Camp Sanders highlighted its crucial role as a marketing tool, serving as a primary source for consumer trial and lead generation. He explained that many consumers first encounter Peloton products in premium hotel settings, fall in love with the experience, and then transition to becoming direct customers.
This strategic placement in commercial environments is viewed as a "tip of the spear" approach, enabling Peloton to introduce its brand to a wider audience in more locations, ultimately driving growth in its core consumer business.
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Originally published at: https://www.cnbc.com/2025/10/01/peloton-revamps-equipment-raises-prices-ahead-of-holidays-.html
