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

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Peloton comes on the heels of a third round of layoffs and is now considering redesigning its bikes so users can assemble them independently. CEO Barry McCarthy is also considering a plan that might allow subscribers to the Peloton app to view workouts on third-party training machines. McCarthy told Bloomberg that Peloton has been working on a bike redesign “for a while” and to top it off said he hopes Peloton’s highly anticipated rower will debut sometime this holiday season. He also confirmed that the company has not completely given up on the Tread Plus.

All of this is consistent with comments McCarthy made in May during the company’s third-quarter 2022 earnings. It was then that he hit on the idea of ​​potentially changing hardware designs so that in the future Peloton equipment would be designed to work in one piece to arrive at a customer’s house. At this point, Peloton’s treadmills and bikes have to come in individual pieces with white gloves, with a team that comes to your home and builds yours for you. The service used to be free, but Peloton started charging an additional $250-$350 fee in late January.

The move is part of Peloton’s ongoing restructuring plan, which aims to reduce the company’s costs and improve cash flow. On Friday, Peloton announced it was cutting more than 500 jobs in connection with last-mile deliveries and product distribution. The company also noted that it increased the cost of its Bike Plus and Tread as it closed retail locations in 2023. By making it so customers can assemble their own gear, the company could easily ship devices via FedEx — which is a move rowing rival Hydrow has recently implemented its slimmer, smaller Hydrow Wave rower.

Peloton is considering redesigning its hardware so that users can assemble its bikes themselves.
Photo by Amelia Holowaty Krales / The Verge

Since taking power in February, McCarthy has not shied away from sharing new ideas about how to turn Peloton’s faltering financial fortunes. The money saved from Friday’s cost-cutting measures will reportedly be funneled back into Peloton’s R&D and marketing efforts. That includes marketing Peloton’s standalone app, which McCarthy says has received little to no promotion in the past. That ties in seamlessly with other plans announced by the CEO Bloomberg, including potentially allowing Peloton users to stream lessons on third-party training machines. McCarthy also noted that the company could tweak the app’s subscription strategy toward a “freemium” model where some features aren’t locked behind a paywall.

That strategy is similar to what Apple is currently doing for its Fitness Plus service, which does not require an Apple-branded fitness device. Instead, people can use their own devices to stream Fitness Plus classes while using rowers, treadmills and bicycles at their local gym. The main difference is that Apple still requires users to have at least an Apple Watch and iPhone to access Fitness Plus.

But while McCarthy seems happy to turn to services, it seems that hardware still plays a role in Peloton’s business. For example, the company is gearing up to launch a rower, possibly this holiday season. The rower was arguably the worst kept secret in connected fitness until it was confirmed earlier this year at Peloton’s annual subscriber Homecoming event.

The Tread Plus was recalled after causing several injuries, but Peloton has not given up on the product’s relaunch.
Image: Platoon

More surprisingly, McCarthy hinted that the company hoped to relaunch the Tread Plus, which was recalled last year after causing several injuries and the death of a small child. Although both the Tread and Tread Plus machines were recalled, the Tread was later approved for sale by the end of 2021. However, the Tread Plus remains out of circulation. In the third quarter, the company also noted that the performance of the high-performance treadmill was higher than expected, costing the company $18 million. According to McCarthy, the relaunch of the Tread Plus is completely dependent on the government releasing it for sale. It’s possible that Peloton hasn’t given up hope for the Tread Plus, but it’s also not something it’s counting on. On Friday, part of the reason for raising the price of the “affordable” tread by $800 was to position it as a superior device and bolster Peloton’s “premium” image.

Another interesting fact is that Peloton may be preparing to expand its One Peloton Club lease pilot. The program bundles the cost of the bike and lessons into a monthly fee of $89. The pilot has so far been successful for the company, with McCarthy saying in May that the program “had appeal to the masses” as 53 percent of the filings came from households with incomes less than $100,000.

Peloton is expected to hold its fourth quarter 2022 earnings call later this month on August 25, and we’ll likely learn more about what plans will hold up then. So far, Peloton’s restructuring efforts have been slow to get going, and Wall Street investors generally seemed skeptical.

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