Today, we’ll explore the history of the gym equipment giant Peloton Interactive, Inc. and how they successfully transformed their IoT-based hardware and software into a commercial success. The company has revolutionized at-home training, and with some luck from worldwide events, they experienced a significant surge in popularity. However, this influx of new customers and revenue wasn’t managed well, and now the company is only a shadow of its former self. Nevertheless, we will focus on the details that enabled their initial success.
Around 2011, John Foley and his wife loved going to the gym, but due to professional duties and the recent arrival of a child, they found it increasingly difficult to find the time to commute to the gym and exercise. While they could train at home, exercising alone was no match for attending in-person classes with an instructor. Training at home, though much more convenient, also lacked the motivational atmosphere and community of a gym. That’s why Foley, an executive at Barnes & Noble at the time, decided to pitch the idea of giving people the full experience of working out in a high-end studio cycling class from the comfort of their own home to Tom Cortese and other colleagues. The company was founded in January of the following year, and by the next month, it had already raised $400,000 in seed money and then $3,500,000 by the end of the year. The company’s first physical product (Peloton Bike) was sold on Kickstarter in 2013 for an early bird price of $1,500.
Following their successful Kickstarter campaign in 2013, Peloton continued to grow rapidly. In addition to direct equipment sales, their business model included selling subscriptions that allowed users to watch instruction videos or attend live exercise classes. To fulfill this need, the company opened its first filming studio in New York City in 2014. Over the next few years, Peloton sustained steady growth while continuously enhancing its portfolio. Peloton began positioning itself as a premium brand with the addition of new commercial-grade bikes for home use. They also launched their app, separate from the equipment, to boost subscription numbers. The year 2018 was particularly significant for the company as they launched a major new product: a high-end treadmill called Peloton Tread. This treadmill featured a large screen for streaming running and bootcamp classes, helping to diversify Peloton’s offerings and appeal to a broader audience.
In 2019, Peloton went public with an initial public offering valued at $8.1 billion. However, the real defining moment for the company came in 2020. With the COVID-19 pandemic making gym attendance even more difficult or even impossible at times, people started looking for alternatives, and Peloton was well-positioned to capitalize on this shift. Their sales and subscription numbers skyrocketed, and stock prices peaked in January 2021. Unfortunately, the company’s success wasn’t without challenges. While demand was enormous, driven by social media and celebrity-based campaigns, the same global situation that drove demand also made scaling the business more difficult. Supply chain issues and delivery delays frustrated customers. In 2021, Peloton faced a major setback when they had to recall some of their treadmills due to safety concerns. As the pandemic waned and gyms reopened, Peloton’s growth slowed significantly. The company was left with a large amount of unsold stock from ramped-up production and struggled to sell it. Peloton tried to introduce new revenue streams by selling merchandise and gym apparel and expanded their training offerings with AI-powered personal trainer cameras that supported a wider variety of fitness disciplines. Despite these efforts, the company’s stock prices are much lower than they once were, and they have had to downsize significantly, with the founder leaving in 2022. Nowadays, the future of Peloton remains uncertain.
What remains interesting is the technology behind the company and how they built their infrastructure. The entire system is quite complex, featuring central studios for training streaming and numerous individual devices. All gym equipment requires communication between sensors and control hardware within the bikes and treadmills. Most devices would be equipped with Bluetooth and Wi-Fi modules for external communication as well.
The tablets mounted on Peloton bikes run a custom version of the Android operating system. The first generation of hardware operated on Android 4.1.1, while later devices switched to Android 7.x. Since the underlying OS is still Android, older devices can be rooted and unlocked, allowing the outdated hardware to be repurposed. Although this procedure is not officially supported, it is relatively common, and many guides are available online. Regarding the CPU, the tablets need substantial processing power to handle all necessary tasks. The third generation of the Peloton Bike features a 2.0 GHz Mediatek MT8173 quad-core processor with 2 GB of RAM. Newer, more premium products are equipped with an even more powerful 2.5 GHz Qualcomm QCS605 processor, which is specifically designed for IoT devices.
Image of the new motherboard in the Generation 2 Tread+ screen. Image credit FCC filings.
Regarding the software side, it’s challenging to pinpoint the exact programming languages used in Peloton’s production deployment. However, due to the system’s complexity It is likely that multiple languages are employed. For instance, the sensors are probably managed using C, while data processing tasks might utilize languages like Python. This diversity is supported by Peloton’s GitHub, which hosts several smaller open-source projects written in various languages, including not only the ones mentioned but even Go and Ruby.
As for the cloud architecture, there is no definitive source confirming the exact providers used by Peloton, but it is highly probable that they rely on AWS. Numerous articles discussing the development of Peloton’s recommendation algorithms reference various AWS services for storage, database/cache hosting, and computing, suggesting AWS plays a significant role in their infrastructure.
https://www.onepeloton.com/press/articles/how-we-built-machine-learning
https://www.onepeloton.com/press/articles/designing-an-early-stage-recommender-system
In conclusion, Peloton’s journey illustrates the potential and challenges of monetizing IoT devices in the fitness industry. By combining innovative hardware with engaging content and a subscription model, Peloton initially captured a significant market share and revolutionized at-home fitness. Their success demonstrates the power of connecting physical products with digital services to create a comprehensive user experience. However, Peloton’s story also serves as a cautionary tale, highlighting the importance of adaptability, supply chain management, and sustainable growth strategies in the rapidly evolving IoT landscape. As the fitness tech market continues to evolve, companies can learn valuable lessons from Peloton’s rise and subsequent struggles to better navigate the complexities of IoT monetization and maintain long-term success.
Want to learn more about Peloton? Please check our Shorts about their monetization model:
The source of information for this article was generally available on the Internet. If you see something non-factual please contact us at info@wizzdev.pl
