Wearables: Bloomberg is reporting that Apple is working on an Apple Watch that can function independently of the iPhone. The current version cannot connect to a cellular network on its own. It is expected by years’ end but that sounds like far from a sure thing.
Last year, Apple took a step toward making the Apple Watch a more independent device by selling some new models with a GPS chip. This allows the device to accurately track distance traveled by wearers when they leave their iPhones behind on walks or runs. The company had planned to release an LTE-capable model last year, but chose to hold off due to battery life issues, Bloomberg News reported at the time. Cramming an LTE radio into a device as small as a watch remains a challenge, but Apple has been exploring ways to improve battery life, people familiar with the company’s work said.
An Apple Watch that doesn’t need to be tethered to an iPhone could become the big hitter that Apple is looking for. And Apple seems to view fitness as the killer app that will ensure mass adoption. So what could go wrong?
For instance, in the past few months, Google’s health-focused spin-off Verily has announced a smartwatch optimized for medical studies. Apple is rumored to be working on an Apple Watch-compatible insulin pump. And most recently, Apple has teamed up with Cochlear, the company behind Cochlear implants, to develop a new, lower-power Bluetooth signal, which could send iOS phone messages and alerts right into someone’s skull.
Hearing aids themselves aren’t a big enough market to feed a Google or Apple, of course, but they still represent a $4.5 billion business in the U.S. alone. And that number could soon grow, because this week the Senate passed a new bill to allow the marketing of over-the-counter hearing aids by consumer electronics brands like Bose and Beats. Meanwhile, the medical equipment industry in general is the larger cash cow up for grabs, estimated to reach $500 billion by 2020. The greater healthcare industry is worth $3 trillion. It’s the same size the global fashion industry, perhaps a bit ironically, given that Apple originally touted the Apple Watch as a style play and Google’s Glass wearable had its moment in Vogue.
Apple entered the wearables space with a fashion focus. That didn’t gain any traction so they pivoted to fitness tracking but medical devices might be where they end up. It is a much bigger market than fitness and you don’t have to convince people that they should be using your product. You just have to convince them that your product is more effective or cheaper. That’s a much easier sell.
Concept2: Following the success of its rowing and SkiErg machines, Concept 2 has introduced a BikeErg. I am curious what the strategy for this product is. Concept2 has a very strong presence in the CrossFit community with its rower and skierg. However, supplanting the Assault Airbike as the bike of choice in CrossFit will be a tall order. And it doesn’t seem like the BikeErg was designed to do that. The great thing about a fan bike is that is a total body exercise, which is appealing to functional fitness adherents. The BikeErg is designed more like a traditional cycling trainer. Concept2 appears more concerned with replicating the original exercise in its machines rather than catering to any particular group. From the company website:
Unlike rowing or skiing, cycling requires a continuous motion. In the past 18 months, Peter and Dick focused on adapting Concept2’s mechanics and monitoring systems to cycling. As an “ergometer” (or “erg”) the BikeErg with PM5 measures work. Like the indoor rower and SkiErg, the BikeErg is sport-based—and there’s a family resemblance that ties the machines together.
I get that the Concept2 mission is to make sport-based machines but we’ll see who they go after as customers. My guess would be cycling studios but the BikeErg is not your typical spin bike either:
The bike uses air resistance, so when you push harder on the flywheel you increase the cadence and the effort required to maintain the speed increases. The faster you want to go, the harder you need to pedal. The flywheel also has a function that’s similar to changing gears on a bicycle — it’s not made to be a spin bike. It has a wide range of dampers that allow you to set the cadence, or RPM, for your power or effort. It even has a clutch that allows it to freewheel like a real bike. It’s also very light, just 58 pounds.
Is Concept2 using the Field of Dreams strategy? If you build a great product, the consumers will come. Maybe they believe that cycling studios will design new protocols around the BikeErg. That could be a good way to stand out in a crowded field. Or they could be counting on their relationship with and reputation within the CrossFit community to make this a success.
Death of Retail: MarketWatch and Bloomberg both published articles this week about gyms taking advantage of the abundance of open retail space these days. From MarketWatch:
“The last time I remember seeing rent deals like this was back in 2007,” Crunch Fitness’s Midgley said. That’s when Midgley was serving as Executive Vice President of Planet Fitness PLNT, +9.07% and the beginning of the financial crisis.
Midgley estimates that about 65% of a gym’s success is contingent upon what types of real estate deals gym owners can secure.
“With the amount of people shopping online, the deals we have seen lately from landlords have been amazing,” Midgley said.
Landlords used to be reluctant to lease space to a gym because gym-goers will tie up a lot of parking spots. Now they’re courting gyms because big box retailers are going out of business and they need to fill those vacancies. You can’t count on JC Penney or Sears to be your anchor tenant anymore.
And in new developments, gyms are becoming the anchor tenant. Huntington Beach’s Pacific City shopping center is anchored by an Equinox gym, while another Equinox gym will be the anchor tenant at Anthem Row, a shopping center in Washington, D.C., expected to open in 2018. And the new Westfield mall in Century City, Calif., which opened this April, is anchored by an Equinox.
Alex Rodriguez has bought a UFC Gym franchise in Florida and wants to open up 12 more. And he is more than happy to take advantage of the sag in the retail industry:
Rodriguez, who counts billionaire investor Warren Buffett as a business mentor, has the license to open UFC-branded workout gyms in the Miami area. And with stores at shopping centers closing at a record pace, A-Rod and his partner are searching for shuttered brick-and-mortar locations to fuel their expansion in South Florida.
“It plays right into our wheelhouse,” Rodriguez, 42, said in an interview. “There’s not a lot of people looking for 40,000 square feet in shopping centers.”
Also, A-Rod is getting mentored by Warren Buffet?
Celebrity Fitness: Let me tell you a story. Actor needs to get in shape for a high-profile and demanding role and they don’t have a lot of time. So they hire (insert Hollywood trainer name here) and get to work. After a few months of grueling workouts, actor is in the best shape of their life and it shows. Plus, all that working out helped with the physical demands of the role.
High stakes, time restriction, and need for functionality. So where do they turn when they need results? Functional fitness. You never see a story about how training “accessory muscles” with Tracy Anderson got them ready for that big role. It’s always doing big compound lifts and lifting their own bodyweight. Emma Stone is playing Billie Jean King in Battle of the Sexes so she hit the weights.
Stone did a lot of each—five days a week of strength training and two to three days of cardio. But what’s really important is the ratio, says Walsh; two days of strength to one of cardio is a great start. “To build muscle, strength needs to be the foundation of your workouts,” he says. “Keeping your muscles strong makes everything better.” Stone used the VersaClimber (an old-school climbing machine) for her 30-minute cardio sessions, but Walsh also recommends good old-fashioned running.
The other thing to note is that no one will be talking about how Emma Stone is “too bulky” when this movie comes out next month.
Survival of the Fittest: The CrossFit Games concluded on Sunday. Mat Fraser dominated the men’s competition in winning his 2nd consecutive title. Tia-Clair Toomey, 2nd last year, barely edged out Kara Webb for the women’s title. This was the first time that the Games were contested outside of California and the city of Madison seems pleased with the economic impact.
Jamie Patrick is the vice president of the Madison Area Sports Commission with the Greater Madison Convention & Visitors Bureau, the area’s primary tourism agency. He said that the bureau estimates the games yielded $7.2 million in “direct spending,” money that consumers in town spent on the event itself or on things like gas, food and lodging in the area.
CrossFit was looking for a smaller host city so that they could have a festival feel instead of just being another thing going on in the Greater Los Angeles area. I think that they got that and the cooler weather probably didn’t hurt either. After the heat of the last few summers in Southern California, it was weird seeing the athletes stuffing their arms into their shirts in between events.
I haven’t seen any news about the television ratings but I assume that they will be lower than last year solely because of the move to CBS Sports. ESPN2 is in more homes than CBS Sports and probably attracts a lot more casual viewers. That said, I think that the Games continue to improve in their coverage and refining itself into a spectator sport. This year’s competition was the most entertaining yet. But please stop asking Mat Fraser about Rich Froning.
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-A profile of Gunnar Peterson, celebrity trainer and new S&C coach for the LA Lakers