Apple's iWatch takes a healthy approach to wearables

Apple is vying for position as leader in digital healthcare platforms, but will the iWatch be enough to lure consumers from rival wearables makers?

Apple has big plans for the wearables market and the iWatch is aiming to look beyond the fitness tracking capabilities its rivals are offering right now.

While iPhones and iPads still garner the lion’s share of attention the release of iWatch is not a matter of ‘if’ but ‘when’. Rather than jump on the smartwatch bandwagon, Apple is taking its time and the wait could be due to a larger play at medical and fitness tracking.

The clearest indication of this comes from the nature of the hiring spree Apple has undertaken over the last 12 months, recruiting a large number of medical and fitness technology experts in addition to employing key personnel from big-name luxury fashion brands.

A hiring spree like no other

In July, Apple hired former Yves Saint Laurent CEO Paul Deneve to work on “undefined Special Projects”. Mr Deneve has an extensive background in luxurious goods and high-end fashion which may prove critical in Apple’s wearable plans.

Shortly after, Apple hired famous fitness consultant and educator, Jay Blahnik, a figure that Nike referred to as “instrumental” in its development of the company’s very own Fuel Band fitness wearable.

In January, Apple added to the roster Ravi Narasimhan, a former Vice President of R&D for general medical devices firm, Vital Connect. In his former role, Narasimhan was responsible for the development of sensors that were specifically designed for measuring a person’s vital signs such as skin temperature and respiratory rate.

In the same month, Apple also added Nancy Dougherty, whose background included developing a patch capable of analysing the wearer’s blood without the need for a blood sample.

Other notable hires include revered sleep tracking expert, Roy J.E.M. Raymann, whose former role at Philips Research involved working on wearables, sensors and other non-pharmacological approaches to improving sleep quality.

A number of scientists and executives from medical sensor companies such as AccuVein, C8 MediSensors and Senseonics have also lost employees to Apple.

It's all about Healthbook

The aggressive recruitment in the space, coupled with the continuous filing of patents and trademarks under the iWatch name, is one thing, but recent design leaks of Apple’s forthcoming Healthbook app suggest Apple also has grand plans to position itself as a digital health platform leader.

Early designs which were originally leaked by 9to5Mac show that Apple’s ambitious Healthbook app will be able to analyse everything from heart rate and fitness activity to blood oxygen levels. Using a card-like interface, users can track a large amount of health data including “bloodwork”, blood pressure and even blood sugar levels.

What’s unclear is how Apple plans to source this data. Medical sensors have not yet advanced to a point where a person’s vitals such as blood pressure and blood glucose levels can be determined by a wearable such as a smartwatch.

There are skin patches currently available in the market that can detect hydration levels and there are blood pressure monitors available that connect directly into the iPhone, but these all require sensors elsewhere on the body. Similarly, pulse oximeters -- devices that can detect oxygen saturation levels -- are also available but these require attaching sensors to a user’s fingertips.

As for determining a person’s blood glucose levels, there are currently no commercially or clinically viable products available that offer a non-invasive means of sourcing such data. For this reason, all modern blood glucose monitors still require drops of blood from the user before accurate readings can be made. Companies have invested hundreds of millions of dollars in finding an alternative means to this long-standing problem. It’s not just medical firms either, with Google having recently developed a contact lens designed to measure glucose levels from tear ducts.

What’s unclear is whether Apple plans to build some or all of these capabilities itself.

A more plausible scenario and a more financially viable one for a company like Apple would be to build an ecosystem by allowing existing third-party medical devices to integrate with the Healthbook app.

This means that the iWatch could conceivably track a user’s heart rate, sleep patterns, calories burned and steps taken, like some other smart watches and fitness bands currently available on the market. Tracking medical points such as blood pressure, hydration and blood sugar levels would come from optional third-party devices with the Healthbook app acting as a central repository for the user’s medical and fitness data.

This could explain why Apple has been in talks with a number of medical tech firms and acquiring experts from the field as Apple will need to ensure that the Healthbook app is setup to accurately record and interpret the incoming data.

This approach presents obvious opportunities for companies who build these types of devices but it remains to be seen whether this holistic approach to health will resonate with consumers.

Of course, we still don’t know how close to a final product Healthbook is or what other plans Apple might have in store for the iWatch.

Raising the stakes

What is for certain, however, is that the wearables stakes have been raised considerably since the announcement of Android Wear by Google -- a version of the popular mobile operating system specifically designed for smart watches. The slick looking OS, combined with the equally impressive Moto 360 smartwatch from Motorola, proves that the competition is more than capable of producing a wearable with mass appeal.

Graph for Apple's iWatch takes a healthy approach to wearables

Motorola's Moto 360 smartwatch

It’s clear that Google wants to establish itself as the key name in wearables and with "project Ara" -- a modular smartphone with user-upgradeable parts -- in the pipeline for early 2015, the search giant has clearly built more momentum in innovation and product development than Apple.

While consumers might still flock to a larger screen iPhone 6 and be content with incremental updates in iOS 8, it’s unlikely to satiate investors who are clamouring to see something truly innovative come out of Apple in the post-Steve Jobs era.

There is mounting pressure on Apple to release the iWatch but the big question is whether it’s ready to reveal anything at the Worldwide Developers Conference in June. Apple boss Tim Cook said last year that for a wearable to be successful, it would need to change the behaviour of its users.

“Can [a wearable] change somebody’s behaviour? The book hasn’t been written on that yet. To convince people they have to wear something, it has to be incredible,” Cook said.

Apple’s clearly keen to make the iWatch more incredible than any other wearable on offer but with the competition turning up the heat, time is no longer on its side.

This story was updated at 1307 AEST

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles