Apple Watch Saves Lives, But Healthcare Play Won’t Rescue Apple
An Apple Watch told its owner to “go to the hospital,” potentially saving the man’s life – and it’s not the first time Apple’s wearable has received such praise. The technology is clearly having a positive impact on device owners, but Apple’s move into health and wellness won’t rescue the company from its recent woes.
Electrocardiogram Function and Irregular Rhythm Notification on Apple Watch is Saving Lives
According to Apple Insider reporting and a tweet from “Science Friday” host Ira Flatow, an Apple Watch saved Flatow’s brother’s life. The watch alerted him to a heart rate spike, and he was quickly diagnosed with tachycardia at a nearby hospital.
My brother was saved by his Apple Watch. After he felt a rapid heart beat >200 bpm, his watch told him to “go to the hospital.” He did and his tachycardia was diagnosed.
— Ira Flatow (@iraflatow) March 7, 2019
The man in question says that while he was being monitored by hospital equipment, a comparison found his Apple Watch monitoring to be totally accurate:
“During the 15 hours I was at the hospital hooked up to the monitors…the monitors never disagreed with my watch’s reading. I checked MANY times.”
Some believe that wearables are no replacement for professional medical equipment. Others say that for day-to-day use, devices like the Apple Watch are potential life-savers.
He just got the heart rate likely and some idea of rhythm, not a twelve lead EKG on apple watch. it is not a substitute to a full EKG. It is like a screening test essentially, not a substitute.
— BSharma MD, MBA (@bs2537) March 7, 2019
The man’s story is not the first this year after the new Apple Watch functions were enabled in the US. Another man in North Carolina was also diagnosed with tachycardia after a notification from his watch. A man in New Hampshire credits his Series 4 wearable for identifying atrial fibrillation, while an Apple Watch user in Washington discovered that a past heart condition had returned.
Digital Health Market Worth More than $500 Billion
The digital health market could reach a value of $504 billion globally by 2025, and $7 trillion is spent on healthcare around the world every year. That’s 10% of global GDP and the biggest spend for global governments. Healthcare wearables alone are predicted to hit a market value of nearly $18 billion by 2021.
Apple has made no secret that it sees a future away from products like the iPhone and iPad. CEO Tim Cook, according to CB Insights, has said the healthcare market makes the smartphone sector look “small.” The company has released a Health Record and added its heart monitoring to the Apple Watch. The device also has “fall” detection and an emergency SOS feature.
— Dr. Thomas Wilckens (@Thomas_Wilckens) February 28, 2019
No one can deny that Apple has effective positioning to enter the healthcare wearables and applications market successfully. It can leverage the reach of its already-staggering user base, with whom it has significant brand loyalty. Both of these are factors that specialist healthcare technology startups often don’t have.
Big Tech in Healthcare explores the key strengths and offerings the Big Four — Google-parent Alphabet, Amazon, Apple, and Microsoft — will bring to the healthcare industry, as well as their approaches into the market https://t.co/ydM9oDA9Nf pic.twitter.com/wOYCC34ppp
— Business Insider Intelligence (@BIIntelligence) March 4, 2019
But, there are challenges for the giant. For one, it doesn’t have the medical technology expertise of niche companies in the sector. This could limit the tech giant’s foray, at least initially, to complementary wellness applications rather than medically accepted technology. Wall Street Journal reporting once revealed Apple struggled for real accuracy in heart monitoring, though anecdotal reports suggest it has made progress in this area.
Even Apple’s former Senior Manager of Health Special Products, Robin Goldstein, recently wrote:
The size of the healthcare market and relative ease with which products can be developed, as well as the current appeal of applying algorithms and machine learning to the imprecision of the human body, requires that extra care be taken…High tech cannot view digital health as simply the next great market opportunity.
Healthcare Markets Won’t Rescue Apple
Apple’s approach is one of user experience, slowly introducing applications and wearable functions through its existing products and customer base.
It could take a bite out of the predicted $18 billion in 2021 healthcare wearable market but the bite will be small. In 2016 around 2.5 million healthcare wearables were shipped. In 2018 Statista put total shipments of wearables at 85 million. That’s rapid market growth but Apple didn’t reap the reward.
As per the following chart from Statista, Apple’s wearables revenue in the first quarter of 2019 is little different to what it was in the first quarter of 2012. And that is only because of recent growth, between 2013 and 2017 wearable revenue fell back and only grew slightly during 2018.
Services too is a similar story, revenue is falling not increasing.
Revenue from Healthcare Just a Drop In the Water, No Waves in Sight
Compare also a maximum 2018 market size of 85 million devices to 218 million iPhones sold in 2018. If Apple were to dominate the entire wearables market it still would be a fraction of the size of its iPhone market. That’s just if Apple could monopolize the market, which is highly unlikely given the evidence so far.
Its bite into wearables is far tinier than its proportion and value in the smartphone market. Which incidentally Apple is losing to Huawei.
The adoption rate of healthcare wearables is questionable too. The drop rate for fitness trackers is around 30% as users tire quickly of intrusive monitoring and notifications. Though notably for those with a serious condition the discomfort of a wearable could well help to save their life.
Conclusion: Healthcare wearables and applications are only part of the iPhone maker’s wearables and services revenue. This revenue is small compared to Apple’s overall income and is just not seeing sustained growth. Even despite the potential size of the healthcare and wider markets.
To regain its $1 trillion company valuation, which it achieved in August 2018, then lost, Apple still needs its traditional markets and products to perform. The company needs to sell iPhones and Macs, or it needs to do something really dramatic, and fast.
Apple’s shareholders aren’t yet confident in the company’s services and healthcare markets either. This was proven in the market reaction to Cook’s shock January iPhone sales revenue revision. Shareholders voted with their feet – out. Long term Apple’s strategies might pay-off. Short term, with iPhone sales dipping on lowering Chinese and global demand another $1 trillion valuation looks unlikely for 2019.