Nautilus 2005 Annual Report Download - page 16

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Table of Contents
We believe that not only have such sports nutrition products gained wide acceptance as an essential component of a committed athletic
lifestyle, but increasing numbers of consumers who aren’t necessarily health club devotees are also turning to these products for their energy
boosting and wellness benefits, often in lieu of traditional beverages and snacks. Opportunities exist to not only expand our presence in our
existing nutrition categories but also to provide products for the broader $15.6 billion overall Sports Nutrition and Weight Loss market, as
defined by NBJ.
COMPETITION
Fitness Equipment Segment
The markets for all of our products are highly competitive. The specific competitors vary by market and sales channel. We believe that
our combination of recognized brand names, innovative and high quality products, multiple distribution channels, brand marketing awareness
programs, and dependable customer service allows us to remain competitive in all of our current fitness equipment markets. Our main
competitors are discussed by sales channel below.
Home Fitness Equipment . Our Bowflex strength and cardiovascular fitness products predominantly address this market. We believe the
principal competitive factors affecting this portion of our business are product price, innovation, quality, brand name recognition, financing
options, and customer service. Our direct-marketed brands compete directly with a large number of companies that manufacture, market and
distribute home fitness equipment. Our principal direct competitors include ICON Health and Fitness and Fitness Quest.
Commercial Fitness Equipment. Our Nautilus, Schwinn, and StairMaster brands compete against the products of numerous other
commercial fitness equipment companies, including Life Fitness, Cybex, Star Trac, Precor, Techno Gym, and Johnson Health Technology. We
believe the key competitive factors in this industry include price, quality, durability, diversity of features, financing options, product service
network, and product innovation.
Specialty Retail Fitness. Our Nautilus, Bowflex, Schwinn Fitness, and StairMaster brands compete against the products of numerous
other commercial and retail fitness equipment companies, including Life Fitness, Cybex, Star Trac, and Precor. We believe the key competitive
factors in this industry include price, quality, durability, diversity of features, financing options, product service network, and product
innovation.
Retail Fitness Equipment. Our Nautilus, Schwinn, Bowflex, StairMaster and Trimline brands compete against the products of numerous
domestic retail fitness equipment companies including ICON Health & Fitness, HOIST Fitness Systems, Horizon Fitness, Fitness Quest, and
Precor. The principal competitive factors in the retail fitness equipment industry include price, quality, brand name recognition, customer
service and the ability to create and develop new, innovative products.
International Fitness Equipment.
We market and sell Nautilus, Bowflex, Schwinn Fitness, StairMaster and Trimline brands to geographic
locations outside of the Americas. These brands compete against the products of numerous other fitness equipment companies, including Life
Fitness, Cybex, Star Trac, Precor, and Techno Gym. We believe the key competitive factors in this industry include price, quality, breadth of
offering, durability, diversity of features, financing options, product service network, and product innovation.
Fitness Apparel Segment
With the acquisition of Pearl Izumi, we now compete within a specialized niche in the market for performance fitness apparel. We believe
this market to be about $2 billion. Our principal competitors in the cycling apparel category consist of Sugoi, Cannondale, Castelli, Descente,
and private label. Within the cycling footwear category, the competitors primarily consist of Sidi, Specialized and Shimano. We identify our
main competitors within the running footwear category to be Mizuno, Brooks, Nike, New Balance, Adidas and Asics. Within the running
apparel category, we believe the main competition to be the same listing of companies as with running footwear, with the addition of Sugoi.
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