Peloton goes all in on AI in product relaunch
By Jordan Valinsky, CNN
New York (CNN) — Peloton is unveiling a sweeping revamp of its portfolio with a focus on artificial intelligence as the once-hot fitness company looks to kickstart growth.
On Wednesday, the company is releasing five products, including a cheaper base model and more expensive “plus” versions of its bike and treadmill as well as a new rowing machine — all of which have a new swiveling screen so users can take strength, yoga and other classes. The equipment also has upgraded speakers and improved Wi-Fi connectivity, while the bike has an improved seat in response to consumers’ complaints.
The “plus” versions of its bike, treadmill and rowing machine have a new feature called Peloton IQ, an AI-assisted feature that acts like a personal trainer offering feedback on users’ form, plus rep counting and suggestions on weights and workout plans.
Prices have also gone up, with the Bike now costing $1,695 (a $150 increase), and the Bike+ costing $2,695 (a $200 increase). The base model of the treadmill has also increased by $300, to $3,295; and the Tread+ now costs $6,695, a whopping $700 increase. The monthly membership price has also increased for the first time in three years, by $5, to $49.99.
All products are now on sale at Peloton’s website, with “select” equipment available at Dick’s Sporting Goods and Amazon.
Peloton has experimented with AI for the past few years, notably with the Guide, a $495 attachable camera that offered feedback, but which is no longer on sale. The “company learned a lot from that product,” said Chief Product Officer Nick Caldwell, noting that users wanted those tools integrated “more deeply” in the equipment.
Caldwell also said he thinks Peloton’s relaunch will entice new people to the brand because these products are “meaningfully different.”
“A lot of people still think of us as a bike company, even though our number-two modality is strength,” he told CNN. “I think by putting strength right on the product, it makes it very clear that we’re multi-modality.”
Slumping stock
It’s the first major change rolled out under Peloton CEO Peter Stern, a former Ford Motor Company and Apple executive, who has the Herculean task of transforming the company. Peloton’s last product launch was in 2022 with the release of a $3,200 rowing machine.
Stern is focusing on broadening the company’s reputation from being known for just cardio (even as previous attempts haven’t had much success) as well as attracting new customers ahead of the holiday shopping season.
The stock has lost more than 90% of its value since the height of the pandemic, when Peloton soared in popularity, with the company likely hoping to recapture just a fraction of that magic. Shares jumped more than 5% in premarket trading.
At least one analyst thinks the sweeping changes can give Peloton a boost.
“We look favorably upon efforts on the part of new senior leadership at Peloton to reinvigorate the brand and cater to a wider array of target consumers,” Brian Nagel, senior equity research analyst at Oppenheimer, told CNN.
He added that while “risks remain” for Peloton, “we very much believe that there exists a compelling lane within the health and fitness space for a better-run, better-capitalized Peloton to ultimately succeed.”
Peloton’s past
Since Stern began his role in January, he has instituted a number of changes to try to get the company back on track, from slashing costs to shifting its marketing message.
Last month, Peloton laid off about 6% of its workforce as part of a $100 million cost-cutting effort. Stern told shareholders at the time that the company’s expenses “remain too high, which hinders our ability to invest in our future.” The savings, he added, would be used to fund “strength and additional wellness offerings.”
Stern took over from former Spotify executive Barry McCarthy, who had a tumultuous two-year stint from early 2022, when he replaced Peloton founder John Foley, until his resignation in 2024.
McCarthy slashed thousands of jobs and stopped building its equipment in-house. He also hiked prices, shuttered retail stores and redesigned its fitness app with a free tier — the latter of which ultimately failed. However, a clothing collaboration with Lululemon is still in place, and Peloton continues to sell its products with outside retailers, both McCarthy’s initiatives.
In June, the company named its fourth chief marketing officer in five years — a signal that its advertising wasn’t resonating with consumers. Peloton discontinued its high-profile ads featuring NFL brothers T.J. and J.J. Watt, as an attempt to appeal to men. A new advertising campaign will be unveiled, tied to this launch.
Major recalls were also a blemish. The company paid a $19 million fine in 2023 after the Consumer Product Safety Commission levied “one of the largest civil penalties in its history” following a recall of 125,000 unsafe Peloton treadmills.
The-CNN-Wire
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