Archive for August, 2014

Not iWatch; HealthWatch

August 4th, 2014 No comments

One of Steve Job’s greater accomplishments wasn’t design or marketing, it was negotiating with an intransigent music industry and convincing them to let the iTunes Music store sell music one song at a time. At that time, Apple was able to convince them that well designed products and an integrated ecosystem would sell more music than they had done in the past, if only they would make a risky change and invest in his vision.

Apple and Jobs performed a similar task with the new iPhone in which they mobile phone providers were slowly convinced to subsidize the steep price of the iPhone so that consumers would have access to then superior technology and user experience without having to pay the hefty premium Apple needed to get it to market.

The next big thing, so some pundits are saying, is the iWatch. We’ve been hearing about Dick Tracy style connected watches from Samsung, Motorola, as well as smaller start-ups such as Pebble for sometime while the market seems ready to wait and see what Apple brings to the table. But what could they do? What is the real use-case for these smart phone accessories attached to our wrists.

I can think of a few clever ideas beyond just talking into your wrist or rejecting calls but I really can’t imagine that being much of a justification for another screen within easier access. The wrist screen might be used to improve GPS guidance (think smart arrows), and, if it had cellular phone connectivity built in, we might be able to grab all of our music (and more) from the cloud, but, like many, I still don’t see how that justifies the likely cost of these things (or has the battery life to do it for long).

Apple may be focusing on fashion more than functionality (given their recent hires) and perhaps there is an opportunity here, but fashion certainly isn’t the game-changer that will prove Tim Cook is a worthy successor to Jobs. During the 2014 Apple World Wide Developer’s Conference (WWDC), apple released specs for their new Health Kit and Home Kit APIs and, hopefully, those may be hints that Apple has more to offer than just another smart-watch.

FitBit, Nike Fuel and a host of similar devices have demonstrated a vibrant market for wearable technology that provides user feedback about their health. Health Kit is aimed at integrating all these sensors into the iPhone. Unfortunately all these purpose built sensors measure only a few bits of data and don’t represent a platform on which vendors could build and scale.

Apple has a platform ready to build on.

Meanwhile, insurance companies regularly encourage customers to improve their health; sometimes offering competitions and inducements to participants at larger employee providers. Health wearables can offer strong encouragement to users to lose weight, get enough sleep, eat right and so on, and they do this by collecting the data and reporting it to the user (often on a smart-phone). Apple frequently looks at the short comings in an existing marketplace and puts together an ecosystem and a product to address it. The solution I hope they come out with isn’t the iWatch, it’s the HealthWatch.

The HealthWatch isn’t just a NikeFuel band or FitBit, it’s a an extensible platform that can accept heart-rate monitors, pulse-oxymeters, diabetes monitors and more. It coordinates with the iPhone to run these applications (and sell them) to users. It can provide the data to health insurance providers to reduce costs. But why would users want to provide this data to their insurers? If Tim Cook can repeat Jobs’ strategy, it’s because the insurers are the ones paying!

No one but Apple would have the clout today to approach Insurers with this pitch. Apple can provide a winning, extensible platform that is a goldmine of valuable information; but, so goes the pitch, they won’t be successful with this amazing new product if they have to compromise. And no compromises, means a premium price. In trade for that goldmine, insurers will have to pay, just like the music industry did a decade ago and phone companies a bit later: they’ll subsidize the cost. The insurance companies know that Apple has the platform and ability to execute like no other company in the market.

The HealthWatch will tell time and reject calls when there’s a phone nearby, but it’ll also have to have value as a stand-alone device. If it’s just a dongle off of a smart-phone, why bother? But if it’s storing insightful information about your health 24/7 even when you’ve left your phone at home. The data can be downloaded later to that smart-phone, or iPad, or even a web-page and suddenly the HealthWatch actually doesn’t have to be a wrist mounted phone to provide value; and that extends battery-life!

Further, in addition to selling apps on the App Store, the HealthWatch will start selling hardware, because sensors often require more than just programming; they have to get real data out of your body (or…out of your home: HomeKit could have a similar play, requesting subsidies from energy providers to revolutionize the SmartMetering market). Apple doesn’t have to make all of this hardware, but enabling the platform to link it all together and sell it to consumers is a huge competitive advantage that only Google can approach.

Let’s see what this Fall brings, but I sure hope Apple can meet or beat this idea; because, really, who really wants just a fancy iWatch?

Categories: Business Tags: