Today Apple launched Fitness+, a set of fitness experiences built for Apple Watch. The solution incorporates information from Apple Watch users to visualize on their iPhone, Apple TV, or i-Pad personalized fitness experiences. The studio-style workouts are delivered by top notch trainers with motivating music from popular artists, making it easier and more rewarding for people to exercise, and most notably, whenever and wherever they like. The cost ? It's only $9.95 and that is for the whole family my friends. It can be bundled with the new Apple One subscription platform which makes it even less expensive.
You might have read my post, Software Eats Everything; Fitness Goes Digital In 2020. By the way I wrote that in early January of 2020. Who would have known? Further to the point that COVID did nothing but accelerate pre-existing trends. Here is a quote:
“Fitness continues to undergo significant transformation as digital has become a more relevant aspect of not just health and fitness but all industries; and it is only getting started.”
For the fan boys and gals of Peloton, no disrespect to Peloton or their fans they provide a great offering, I have previously noted the grossly overvalued shares of the Peloton enterprise. My observation does not mean Peloton and others are not good businesses; it means too many have jumped on board a stock wave that just will not likely last because they are facing a juggernaut of competition from better players. Why does this matter ? It is a lesson in economic head fakes which too many swallow hook line and sinker when you consider the facts I’ll share below.
When Marc Andreessen famously noted software eats everything what he referred to and what my recent article referencedwas the idea of this: ZERO MARGINAL COSTS. The concept is basically this: once you have a software platform with features you have built to a point each incremental user, costs ZERO dollars to add on. This is where big scale and big tech come in. Once you have a trusted global brand, say Apple for example who’s market valueas of this writing is $2 TRILLION, well one must take stock of financial reality.
Let’s put this into perspective so that we can understand why Apple’s further foray into fitness is SO SO relevant given their $2 trillion dollar valuation.
Number of Apple Devices = 1.5 Billion
Number of Apple Watch Users = 100 Million
Of course most Apple users have multiple devices but you get the drift.
Here by comparison is Peloton. Number of active users= 2 Million. (and a monthly subscription of $12.95 - $39.95).
Not meaning to pick on Peloton but we could easily include the long list of Mirror, apps, other devices, etc. The point is a handful of big tech companies have the technological capacity, access to cheap capital, market size, and user bases to realize the potential of health and fitness which software wants to ravage and consume as it has all other markets.
So why is Apple, among other big tech, seeking to enter the health and fitness space. Why did Tim Cook at the end of 2019 say:
“ I believe, if you zoom out into the future, and you look back, and you ask the question, ‘What was Apple’s greatest contribution to mankind?’ it will be about health.”
Look, big tech and health and fitness are on a collision course mainly because food, housing, education, and health are the largest segments of the global economy. They have the scale and broad offering (think Apple One subscription services that now include Fitness+ in addition to music). If software is going to eat everything, and the stats show it has over the past few decades, then the only place for the big four and others to grow their market shares are these industries which include health and fitness.
These mega market moves among the big four of Amazon, Google, Facebook, and Apple (among others like Samsung) will be the rising tide that lift’s all boats in fitness. It is also a precursor to a lot more innovation to come.
Get ready for the future in health and fitness because it is here.
Bryan O’Rourke is considered by many to be one of the leading global experts on technology consumer and business trends in the health club and fitness industry. As a keynote speaker during the past decade he has shared his vision with over 80 audiences on four continents. Bryan has also contributed to seven books on the fitness industry and his views have been widely shared in leading periodicals like the Wall Street Journal and the New York Times. Bryan sits on the board of IHRSA, the leading global trade organization for the global health club industry in addition to serving as President of the Fitness Industry Technology Council. He is chairman and CEO of the private equity firm Vedere Ventures which has investments in Europe, Asia, and the Americas and has advised dozens of companies in M&A, completing over 40 transactions. His Fitness + Technology podcast has been downloaded over 100,000 times. Bryan has an MBA from South Eastern Louisiana University and has completed professional studies at a number of institutions of higher learning including Harvard. Learn more www.bryankorourke.com , follow him @bryankorourke on most social channels.