State of the Treadmill Industry - 2014
In October 2013, ICON Health & Fitness filed a patent application for a home automation system for optimizing temperature, humidity and other climate conditions for every stage of a workout. In an example implementation, the exercise machine might take the user’s heart rate and body temperature, combined with the pace and incline of the machine, and respond with pre-set “scenes” for climate control via a home automation hub with fans, misters, HVAC systems to either make the environment more comfortable or to produce other desired conditions.
While ICON continued to bring patent infringement lawsuits, its loss of one of these suits has wound up in the U.S. Supreme Court. Octane Fitness successfully defended the suit, which claimed that Octane infringed on ICON’s patent for a component in elliptical machines, and sought reimbursement of attorney’s fees from ICON. The issue was whether a patent case is “exceptional” for purposes of awarding attorney fees. Relying on the “ordinary meaning” of the word “exceptional,” the Court held that “an ‘exceptional’ case is simply one that stands out from others and allowed the possibility of reimbursement of Octanes’s attorney’s fees. By making recovery of attorney’s fees easier, the decision may deter “patent trolls” from seeking royalty payments in abusive claims.
A separate Supreme Court patent infringement decision was decided in favor of Nautilus in June 2014. A company called Biosig sued Nautilus in 2013, alleging it infringed on its patent for the design of a heart rate monitor. The Court ruled that the claim was too ambiguous and indefinite and ordered the lower court to use a more exacting standard. Nautilus said the Court’s decision will foster innovation in all industries.
New models of treadmills, ellipticals, and exercise bikes have continued to be introduced with new ways to connect to the Internet through personal devices. The move has been away from built-in touchscreens and toward integration of personal devices, as smartphones and tablets become more commonplace and relied upon. Also, it becomes increasingly difficult for exercise manufacturers to match the quick advances of these standalone devise.
If this trend continues, it would move the innovation from fitness hardware more to fitness software, as users could bring their chosen workouts and software to various machines. Equipment manufacturers might then go from competing with software firms for the best fitness apps to courting them to produce the best combinations of hardware and software.
Remaining to be seen, of course, is whether such technological engagement will be widely adopted by the general population. Commercial establishments may have the most dedicated and technologically savvy users, but home users especially could find so much technology a distraction from plain old exercise, especially if it means engaging in non-exercise related activities. Also there’s the question of whether having to spend time learning how to use a machine will make it less likely to actually use it.
At the 2014 Consumer Electronics Show, Technogym introduced a treadmill that allows its user to control the treadmill using voice commands.
The user can also see performance data on his Google Glass headset and communicate with a personal trainer via a webcam. Users can also connect to other online apps through the device.
Uploading workout results to the Cloud took on new significance and Precor entered into an agreement with Microsoft for storing its users’ data in Microsoft’s health record system HealthVault. The data is transmittable from both Precor equipment and its mobile app. The agreement grew out of Precor’s arrangement with Arizona State University, which claims the largest networked fitness installation, with close to 300 pieces of equipment.
Industrial designer Si Hyeong Ryu came up with this idea to allow runners use kinetic energy to wash their clothes and entered into the 2014 Electrolux Design Lab competition, promoted to challenge designers and artists to rethink how people live and work. The result was the treadmill washing machine.
The ring-shaped treadmill has wash canisters inside that can be filled with dirty clothes, soap, and water. The user’s running motion spins the canisters and laundry. No word on when, or it, such a treadmill will be produced.
Treadmill desks continued to gain in popularity over the past year. LifeSpan Fitness said its 2013 sales of treadmill desks more than tripled over 2012. Much of this increase has come from companies buying desks for their employees, especially in the tech industry. Sales have been helped by recent reports of the harmful effects of prolonged sitting, including increased risk of developing high blood pressure, heart disease, and diabetes.
Also, a growing number of recumbent seated ellipticals are being marketed to consumers and health care facilities for use by older and less mobile users. Passive trainers, those that assist with motions, such like Health Care International’s eTrainer can be rolled up to the user’s chair for rotating foot pedal workouts below and rotating handle bar workouts above.
If you’ve been to a big commercial gym recently, you may have noticed that “functional training” has become the currently popular exercise theory. Functional training is based on natural, whole body movements, instead of isolated and controlled movements. Such training requires little equipment. Perhaps in reaction to this trend, some manufacturers have developed machines that seek to combine the cardio and strength training that functional training can provide. However, none of these machines has become popular yet.
Sales of “light commercial” treadmills continued to increase, as the improving economy appeared to help consumers afford these higher quality machines that are designed for such facilities as hotels and schools.
There were 2013 Christmas equipment shortages, as manufacturers who chose a lean inventory strategy were stung by cutbacks at Chinese factories. It seems that Chinese factories’ production was already down, so they reduced staff, which, in turn, lengthened production time. This delay rippled down the supply chain.
In January 2014, Johnson Health Tech recalled its Matrix brand Ascent Trainer and Fitness Elliptical models. According to the company, moisture from perspiration or cleaning fluids could accumulate in the power socks, posing a fire hazard. No fires or injuries were reported from these approximately 2,800 units sold to exercise facilities during 2011 and 20012
In late 2013, Johnson discontinued its LIVESTRONG line of treadmills, ellipticals, and bikes in the wake declining sales and fallout from the Lance Armstrong situation. In early 2014, Johnson reorganized its marketing effort to focus primarily on selling through its company-owned stores and a small number of specialty stores. As described in last year’s Treadmill Industry Report, Johnson’s has announced plans to become the number one exercise equipment manufacturer by selling directly through company-owned stores worldwide. Johnson’s AFG brand discontinued its affiliate program, which is now sold by a newly-formed division operated independently of the rest of the Johnson organization, along with its Horizon, Matrix, Vision, and Merit brands.
Johnson said it expects 2014 sales to increase 13% to US$580 million in 2014 due to greater sales of its commercial brand, Matrix. Johnson received US$46 million from the the Chinese government in 2014 for moving its factory from Taiwan to the mainland.
Though Johnson is trimming and streamlining its lower cost offerings. Smooth Fitness, however, seems to be taking the opposite tack. Known for its medium and higher priced treadmills and ellipticals, it has announced that it will now focus and lower cost products. Its new exercise bike, the SitNCycle, is designed for “active sitters,” who would like to do something additional while working out at home. The new bike is small and light, so it can be taken and used in a wide variety of places. In early 2014, the bike featured on QVC’s “special value” of the day, 33,000 units were sold in a 24 hour period. The bike is available in at least seven different colors. The company has also released a slightly more expensive foldable bike and a device for abdominal workouts.
In mid-2014, Core Health and Fitness, the parent company of Star Trac and StairMaster, acquired the commercial assets of Nautilus from Med-Fit Systems. Med-Fit acquired the commercial line of Nautilus equipment (excluding Stairmaster) in 2010 for $2.8 million and transferred manufacturing operations from overseas to its newly-acquired Virginia plant in order to improve quality control. Med-Fit said the move was a result of slowing sales.
Core will be manufacturing Star Trac and Nautilus equipment at this plant in Independence, VA.
Core now owns the machinery and the equipment in the plant and has a lease option to purchase the buildings and land surrounding the plant in the next three years. Core says it will move some of its Star Trac strength business from its plant in China to the Virginia plant. Nautilus equipment and some Star Trac equipment will be produced in Virginia.
Core will invest $2 million to expand the operation, which has manufactured Nautilus commercial equipment for decades. In addition to manufacturing Nautilus and Schwinn indoor bikes for Nautilus, Core, which is owned by Michael Bruno, owns the Star Trac and StairMaster brands and also manufactures Nautilus Spin bikes under a license agreements with Mad Dogg Athletics.
The announcement marks the latest move for what is perhaps the original fitness equipment brand in our time. Nautilus was founded in the 1970s and the name became synonymous with strength training equipment. Nautilus also patented the cam (shaped like a Nautilus shell) that varied resistance throughout the range of motion of a muscle. The expiration of that patent, a booming fitness movement, globalization, and a host of other innovations by competitors have resulted in many challenges and ownership changes over the years. After its own swoon and recent turnaround, Nautilus continues to market is Bowflex, Stairmaster, and Schwinn products to consumers.
Nautilus also announced that it will introduce new treadmill models under both the Nautilus and Schwinn brands for distribution through retailers such as Dick’s Sporting Goods. The CEO of Nautilus, Bruce Cazenave, note that, while elliptical machines are the fastest growing form of fitness equipment, treadmills are still much bigger, with approximately 25% of the total fitness market.
In July 2014, Gold’s Gym named Star Trac Vendor of the Year, based on franchisees' overall satisfaction with its equipment and their likelihood to recommend it.
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