Amazon offers $500 ‘Prime Bike,’ encroaching on Peloton’s niche
Amazon launched a “Prime Bike” on Tuesday, a bid to compete with an array of at-home exercise bikes that have become popular in the pandemic, such as those offered by Peloton Interactive.
The new EX-Prime Smart Connect Bike is available on the e-commerce giant’s website for $500, a steep discount to Peloton machines that cost well over $1,000. The Prime bike is only available to Amazon Prime subscribers and was developed through a partnership with Echelon Fitness. The machine comes with a free 30-day Echelon membership trial, which includes live exercise classes.
Shares of Peloton fell as much as 6.7% on Tuesday, but recovered to be down about 2% in afternoon New York trading.
Amazon often releases new hardware as a way to get its technology into consumers’ homes. The company sometimes uses a scatter-shot strategy, pushing out many different gadgets to see what works, including microwaves and clocks.
This is not the first time Echelon has entered into a partnership to distribute its bikes. It also had a deal with Walmart Inc. for a similar model at $500. This is why KeyBanc Capital Markets analyst Edward Yruma isn’t too worried for Peloton.
“Other than a few cosmetic changes, the $500 bike is almost identical to Echelon’s $500 bike at Walmart.com, which has been available at Walmart.com since March and hasn’t had any noticeable impact to Peloton’s growth,” Yruma wrote in a note to investors.