Peloton has announced a comprehensive overhaul of its product portfolio, introducing five new pieces of fitness equipment that incorporate artificial intelligence features. The move, which includes price increases for both hardware and subscriptions, represents a significant strategic shift for the connected fitness company as it seeks to stimulate growth and broaden its market appeal.
Key Takeaways
- Peloton has launched new base and 'plus' versions of its Bike and Treadmill, along with a new rowing machine.
- The premium 'plus' models feature "Peloton IQ," an AI-powered tool that provides real-time feedback on user form and performance.
- Prices have increased for all major equipment models, with the monthly membership fee also rising from $44.99 to $49.99.
- The product launch is the first major initiative under CEO Peter Stern, who is tasked with revitalizing the company's performance.
New Product Lineup Focuses on AI and Versatility
On Wednesday, Peloton introduced a refreshed lineup consisting of a standard Bike and a more advanced Bike+, a base Tread and a premium Tread+, and a new rowing machine. A key hardware update across all models is a new swiveling screen, designed to make it easier for users to participate in off-equipment classes like yoga and strength training.
The company also addressed specific consumer feedback by upgrading the speakers, improving Wi-Fi connectivity, and redesigning the seat on its popular bike for better comfort. These changes aim to enhance the overall user experience and integrate different types of workouts more seamlessly.
Introducing Peloton IQ for Personalized Training
The standout feature of the new 'plus' models is Peloton IQ, an AI-assisted system that functions as a virtual personal trainer. This technology provides users with real-time feedback on their exercise form, counts repetitions during strength workouts, and offers personalized suggestions for weights and future workout plans.
According to Nick Caldwell, Peloton's Chief Product Officer, the company applied lessons from its previous AI experiment, the Peloton Guide camera system. He noted that users wanted these intelligent training tools "more deeply" integrated into the primary equipment. The Guide, which was sold as a separate $495 device, is no longer available for purchase.
Expanding Beyond Cardio
A central goal of this launch is to shift public perception of Peloton from a stationary bike company to a comprehensive fitness platform. "A lot of people still think of us as a bike company, even though our number-two modality is strength," Caldwell stated. He believes the new features will make the company's multi-disciplinary approach more apparent to potential customers.
Revised Pricing and Availability
The new features and hardware upgrades are accompanied by a notable increase in prices across the product range. The company has adjusted its pricing structure for both its equipment and its monthly subscription service, which is required to access its library of classes.
Updated Equipment and Subscription Costs
- Peloton Bike: $1,695 (a $150 increase)
- Peloton Bike+: $2,695 (a $200 increase)
- Peloton Tread: $3,295 (a $300 increase)
- Peloton Tread+: $6,695 (a $700 increase)
- Monthly All-Access Membership: $49.99 (a $5 increase)
This marks the first time in three years that Peloton has raised the price of its monthly membership. The new products are available immediately through Peloton's official website. Additionally, select models will be sold through retail partners, including Dick's Sporting Goods and Amazon, continuing a distribution strategy initiated by former leadership.
A Critical Test for New Leadership
This product refresh is the first major strategic move implemented by CEO Peter Stern, a former executive at Ford and Apple who took over in January. Stern is tasked with executing a turnaround for the company, which has faced significant challenges since its peak popularity during the pandemic.
Peloton's stock value has declined by more than 90% from its all-time high. The company is hoping this launch, timed ahead of the holiday shopping season, will help recapture consumer interest and stabilize its financial performance. Initial market reaction was positive, with shares rising over 5% in premarket trading following the announcement.
"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," said Brian Nagel, a senior equity research analyst at Oppenheimer. While acknowledging that "risks remain," Nagel believes "there exists a compelling lane within the health and fitness space for a better-run, better-capitalized Peloton to ultimately succeed."
Navigating a Challenging Corporate History
The path to this relaunch has been turbulent. Stern's predecessor, Barry McCarthy, led the company for a tumultuous two-year period from early 2022 to 2024. During his tenure, McCarthy implemented drastic cost-cutting measures, including laying off thousands of employees, ceasing in-house manufacturing, and closing retail stores.
In a recent cost-saving effort, Stern announced in October that Peloton was laying off approximately 6% of its workforce to achieve $100 million in savings. He informed shareholders that the company's expenses "remain too high" and that the savings would be redirected to fund investments in "strength and additional wellness offerings."
Past Product and Regulatory Hurdles
Peloton has also faced significant product safety issues. In 2023, the company paid a $19 million fine to the Consumer Product Safety Commission (CPSC) following the recall of 125,000 of its treadmills. The CPSC described the penalty as "one of the largest civil penalties in its history," adding another layer of complexity to the company's recovery efforts.
As part of the new launch, Peloton is also preparing to unveil a new advertising campaign. The company recently named its fourth chief marketing officer in five years, signaling a continued effort to find a message that resonates with a broader consumer base. Previous high-profile campaigns, such as those featuring NFL players T.J. and J.J. Watt, have been discontinued.