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Loup Ventures analyst Gene Munster shared his take on the recently-launched Apple Inc’s (NASDAQ:AAPL) Fitness+ service and how it compares with rival Peloton Interactive, Inc (NASDAQ:PTON) on Wednesday.
What Happened: Munster estimates that Apple would be able to gain 15 million subscribers in the next three years for its newly launched fitness service.
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Munster noted that Peloton as a comparison has 1.85 million paying subscribers at the end of the last quarter, 510,000 of which are on the $12.99 per month plan that does not require a bike.
The analyst said the “510 number” could swell to a few million reaching up to 5 million potential subscribers over time.
The remaining base that is made up of 1.3 million subscribers could grow to 4 or 5 million, as per Munster.
“I think collectively [Peloton] still will lag where Apple Fitness+ is at that 15 million,” said Munster.
Why It Matters: The “other story” according to Munster is the “time-tested halo effect” that Apple Fitness+ could have.
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“They have the watch, the watch users want to get Apple Fitness+. People who want to try out Apple Fitness+ want to buy watches,” the analyst explained.
Munster theorized that If Apple manages to sell another 10 million watches at $300 a piece — that could add $3 billion.
“You could find a way to think about the halo effect plus the subscription effect to get to $4.5 billion per year.”
The halo effect that the new service will generate could “end up being a little more measurable” at 2-3% of total revenue and is “another example of low lying fruit for Apple,” as per the analyst.
Munster said Peloton is not going to reach where Apple Fitness+, primarily because it is more of a “niche product.”
Peloton CEO John Foley does not think Apple’s entry into the fitness space constitutes a threat as they have not entered the hardware category.
Price Action: On the same day, Peloton shares closed nearly 4.9% higher at $134 on Wednesday and gained 0.11% in the after-hours session. On the same day, Apple shares closed mostly unchanged at $127.81.
See Also: Why This Peloton Analyst Says An Apple Fitness Subscription Poses Little Threat
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.