Contrasting Apple and Alphabet’s Approaches to Healthcare

A little while ago, I wrote a post on tech companies’ efforts in the education sector and how I felt they were lacking (I subsequently wrote a follow-up post about Apple’s Swift Playgrounds app being a step in the right direction). In that post, I mentioned there were other areas where large tech companies appeared to be making significant bets, including healthcare. Today, I wanted to dive deeper into that area, since we’ve seen another big partnership announcement from Alphabet’s Verily division this week and we’re also fresh off a set of announcements about the Apple Watch last week.

Alphabet’s Verily Bet

One of the more prominent and established “Other Bets” at Google’s parent company Alphabet is Verily, its life sciences division. It’s one of the three Other Bets said to be generating meaningful revenue, along with Nest and Google Fiber. But it’s also very unlike those other two businesses, in that it’s not a consumer-facing product or service company. Rather, Verily has been mostly developing technologies and then partnering with other established firms which can provide the clinical, research, and marketing expertise to take inventions to market. So far, Verily (and its predecessor, Google Life Sciences) has announced several of these partnerships with various companies, as shown in the table below:

What’s interesting about Alphabet’s approach is it is diving very deep into specialized areas within healthcare, developing technology designed to diagnose and treat specific conditions. Several of the partnerships outlined above are focused on diabetes specifically, for example – this isn’t about general purpose technology being applied to healthcare as an afterthought. That makes Alphabet somewhat unique among big generalized tech companies, most of whom have lent more generic technology to the specialists rather than diving deep themselves. The business models are also curious, featuring a mix of joint ventures, licensing payments, and others. And of course, most of these projects are expected to take years to produce results, in keeping with the normal development cycles for clinical treatments.

If you read enough about Verily’s various efforts, you’ll also find some skepticism from experts in the field. Some of this can be written off as sour grapes from would-be partners, but some of it also comes from people Alphabet has actively consulted on its various efforts and who have come away unimpressed. The main focus of Alphabet’s diabetes work is on miniaturization technology and its partners have spoken highly of its efforts there, but some of its approaches have been tried before and failed, so it will be interesting to see how the contact lenses effort, for example, pans out.

Apple’s ResearchKit and HealthKit

When Apple first announced ResearchKit, I wrote it up as a unique approach to healthcare, though very different from Google’s. Whereas Google’s approach is to work in a very direct fashion on specific, narrow fields within healthcare, Apple’s approach has been to leverage its general purpose technology to help doctors and research institutions do what they do more easily and consistently, all the while making life easier for the patient or research subject. Having covered enterprise service providers for a long time, I found it striking Apple had turned the usual model on its head by focusing on the end user – the patient – rather than the institutions.

This approach, too, has pros and cons. On the plus side, Apple makes its massive installed base of devices, including a growing base of Apple Watches, available as conduits for collecting, tracking, and gathering data on various conditions as part of both treatment and research projects. What’s more, Apple isn’t charging for this capability, but is making it freely available to whoever wants to use it. On the downside, this is general purpose technology not designed for the diagnosis or treatment of specific conditions but designed first and foremost with more generic purposes such as fitness tracking in mind. As such, Apple’s approach can never go quite as deep as technology designed for narrow use cases, although we’ve already seen many applications of both HealthKit and ResearchKit from inventive researchers and care providers.

Above, I talked about the unusual business models for Verily’s various efforts but in contrast, there is no business model at all for these two initiatives from Apple, at least for now. What is clear, though, is Apple is taking this new area of R&D very seriously and Tim Cook’s recent comments about the sheer scale of the healthcare market suggests he sees a financial opportunity here too. I’m very curious to see what shape Apple’s future efforts might take – it’s easy to imagine the partnerships today with Hermès and Nike with the Apple Watch could find counterparts among the major pharmaceutical companies and healthcare systems. These partnerships might develop more specialized versions of the Apple Watch or, perhaps more likely, additional devices which could serve as accessories to the Watch or iPhone and add additional sensing and tracking capabilities. Tim Cook has already suggested he doesn’t want to have to put the Watch itself through the FDA approval process, but these other devices might be better suited for that route.

Doing Good a Motivating Factor

While I’ve focused on the structures and business models of Alphabet’s and Apple’s healthcare initiatives, it’s clear there’s more than just financial incentives at play. If you listen to executives from either Apple or Verily, it becomes clear they’re motivated by a desire to do good in the world. As I’ve mentioned in several previous posts, I believe big tech companies have a duty to use their technological expertise to move the world forward in meaningful ways, changing lives for the better and solving significant problems. It’s great to see both these companies operating in this way. And I’d be remiss if I neglected to acknowledge that these are far from the only two big tech companies doing good work here – I simply wanted to focus on these two today, to keep things simple.