After reading about how Wahoo are now suing Zwift could this come back to bite wahoo in the foot?
Zwift is the king of indoor cycling if they decided ok Wahoo you are playing dirty with us we will ban your hardware from using our software. Could this potentially end up hurting Wahoo, or it could work another way and maybe more people will then go on to use Wahoos own software. Another thought is that Zwift would be mad to try banning Wahoo as they are kings of the indoor hardware.
If you have a wahoo trainer and use Zwift decided to ban Wahoo what would you do, try and use an alternative piece of software or would you buy a new trainer like an elite or Zwifts own trainer ? Just found it interesting what could happen in the coming weeks/months.
Will never happen because they would lose a massive chunk of their subscriber base immediately.
Zwift’s competitive advantage is the social aspect of the platform. There is always someone to ride with. If Zwift banned Wahoo hardware, you would immediately give away part of that advantage to their competition. Now other platforms would also have that social component.
Zwift isn’t making much money off their hardware, they just want subscribers, so they’re probably not interested in cutting off access to that many of their users.
As someone interested in anti-trust issues, I don’t have a feel of who’s in the right here. Zwift is using their market power to force down the price of trainers. But as long as they’re not selling them at a loss, it suggests that Wahoo has pretty high margins. So… let them fight!
It’s going to come down to a simple patent fight, I think. Not an engineer so I have no idea how reasonable the patents are.
I think they use the FE-C protocol for trainer control, so not sure how Zwift could muck around with Wahoo trainers that much.
What I found interesting is that unless I missed it, none of the usual experts in this space (GPL, DCR) have made a peep about this. Not sure if they have been engaged as expert witnesses by the parties or by 3rd party investors, or are just waiting it out, but would be curious about their take.
I’m not saying Wahoo is doing anything wrong, although it’s certainly eyebrow-raising that a decent direct-drive trainer can be made for $499, but Wahoo, Tacx, Elite, and Saris haven’t made any attempt at gaining market share by competing on price and undercutting their competition. There’s nothing wrong with trying to maximize profit by making a good product, but big profits do suggest a market failure of some kind. What drives economic growth more than oligopolistic profits is healthy competition.
(But I will absolutely admit I don’t know the details of this market. I’m just commenting on how it looks from here.)
I think a few important points are being disregarded.
Jet Black sells the Volt for a bit over $800 USD, and that implies that Zwift are selling this at just over their cost or maybe even at a loss, as a loss leader, to grow their membership. In that light, it’s not fair to compare it to what everyone else is charging. Zwift doesn’t really have any overhead related to their version of the Volt.
Looking at other trainers on the market, there are quite a few that come in around the price at which Jet Black sells the Volt. The Elite Suito is within $10 or so of the Volt, and the Kickr Core is within $50 or so. Those two trainers come with the ability to level the trainer, and they come with handles. Also, the Kickr and Suito both fold up for easier storage. The Volt doesn’t. Again, this seems to suggest that Zwift is doing something with pricing that the actual manufacturers can’t do.
I would argue (and frequently do in my business proposals) that competing on price is lazy and shows a lack of understanding of the market. “Oh, well I’ll just sell you the same for less.”
All that does is take revenue and profit out of the category, especially one where there is little growth opportunity.
Now, it is slightly different in this case since Zwift is going consumer-direct, but that also highlights that we are comparing very different business models.
Not really…there have been decent DD trainers in that range for awhile (albeit often on sale). Going consumer-direct makes perfect sense to enable them to hit $499…and we also don’t know what Zwift’s margin is.
They are clearly shooting for a “razor / razor blade” strategy here…sell the hardware cheap so you can gain their ongoing, monthly subscription…a loss leader. Which again just emphasizes we are comparing apples and oranges.
Fwiw, I got my JetBlack Volt a year ago for €550. It seemed to always have been on sale, somewhere around €500-550. It’s currently listed for €505 on JetBlack’s EU online presence, although currently sold out.
Not a surprise, trainers are orientated to enthusiast cyclists who are largely very affluent and quite frankly used to overpaying. They don’t want this to become a commodity type product with a race to the bottom on pricing so everyone in that market is pretty conservative on pricing.
I’d wager one of the biggest markups has to be shoes. Pretty wild when you think about it, product that has a pretty finite lifespan with very basic non-resolable construction and easily sourced synthetic materials yet cost about as much as a pair of Allen Edmonds or Carminas which should easily see many decades of service with periodic re-soling that are hand made from very nice materials in the US or Catalunya.
Elite use a different design to control resistance, so they won’t likely be crossing swords with Wahoo over that specific detail. I guess it depends how generic the Wahoo claims are. If they win this round maybe they’ll roll on and go after everyone else.
Just an aside, I highly doubt anyone will really know remotely what’s happening with this until it’s done. A good friend of mine is a lawyer as well as engineer and part of an IP litigation department at one of the largest companies in the world. IP litigation, at least here in the states, according to him is one of the most poorly understood fields of law by the public. According to him it often comes down to such specific minutiae that you need an engineering degree to understand.