Why an iWatch is not Apple’s next big thing

on August 22, 2014

For those of us who have followed the life of Steve Jobs, we know most of the products he brought to market were ones he wanted to use himself. They came out of his personal life experiences. The iPod came out of his love of music and his frustrations with not being able to access what he wanted and play it back at will. The iPhone came out because he thought early smartphones were not great and he designed it around what he would want in a smartphone. The iPad was his version of making a Mac as portable as possible and replicating a computing experience, tied with new forms of content and apps, in a very convenient manner.

I believe Apple’s next big thing comes out of his experience in the health care system and his immense frustration with gaining access to his own personal records, in not being able to monitor his health in real time and in studying the bureaucratic world of health care — where data is not portable and effectively sharing data between doctors and other members of his health care team was near to impossible. I believe this is at the heart of Apple’s Healthkit and will drive one of the last big things Steve Jobs personally created for Apple before his death.

Healthkit itself is a platform or set of APIs to allow Apple and 3rd parties to link sensors, wearables and other health related apps to the iPhone and, via an Apple app, aggregate and compile data in a single location for a user to see and digest. Or in essence, each device’s sensors would monitor certain health related items but all of the data from each device would be stored in each app individually. If these apps are written to the HealthKit API, that data can now be pooled and organized inside an Apple Health app on the iPhone for analysis of a person’s health data.

The operative word here is “personal” data. The first iteration of Healthkit, for obvious privacy reasons, is locked down to the iPhone itself. Data is only for the individual’s personal use in this early stage of implementation. But it is the next two phases where things get very interesting. Phase two, as I understand it, will be to migrate this data directly to iCloud where it can be accessed by the user on any device for quick analysis and feedback. More importantly, once Apple has the data, they could add value to the user experience — if the user gives permission. For example, Apple’s algorithms, at least conceptually, could be monitoring the data and, with a user’s permission, send them various kinds of alerts, such as looking at your steps data and suggesting you walk more. For example, I am a diabetic. If my blood glucose readings are in this secure cloud area, Apple could see that perhaps three days of my readings are too high and send an alert. It could be a “health pal” to provide alerts like blood glucose examples or reminders such as telling me to exercise more.

Of course, some may say this access and analysis of a person’s health data is an intrusion of privacy — and it is if the person does not give Apple permission to help them with this data. Apple’s value proposition could be so advantageous, many would be inclined to let Apple have access to the data if it keeps them healthier. Apple also has to build a tremendous level of trust for this to work as a protected cloud service.

This becomes an important stepping stone to the third phase of this health strategy. Eventually, this data is destined to be shared, directly, privately and securely, with a person’s doctor and health care provider. When Apple announced Healthkit at WWDC, they stated the Mayo Clinic is working with them in this early stage of the Healthkit program. Since then, they have also signed up Mt. Sinai, the Cleveland Clinic, Johns Hopkins and All Script, the company behind electronic health records. We also believe Kaiser is actively involved in this project too. We have heard Apple is talking with the FDA so that they are aware of the program and Apple’s intentions. While Apple will not make any health recommendations, they still may need some FDA blessings on this so talking to them makes sense.

If you look at all of these phases combined, you can see what Apple is doing is creating the building blocks that could reinvent and personalize the health care monitoring system in new way. The more I study what they are doing with Healthkit and its potential ecosystem, the more I become impressed with both the potential scope and their attention to detail. If successful, Apple could be delivering the tools for the quantified self, at least in the area of health, and deliver to users extremely important data or info that helps them monitor their health as well as motivate them to stay healthy.

I also see this as an intensive move to create a huge health ecosystem linked to their next major product hit. Before the iPod came out and revolutionized the music industry, Apple did a massive amount of work behind the scenes with the music companies so, when the iPod shipped, it had access to a lot of content and services.

I believe Apple is going to school on itself and doing something similar here with a new product. Most think Apple’s new wearable will be an iWatch but given what I just shared above, I believe it is more likely to be a health related wearable tied to this back end health data system. Yes, it can tell time, but instead of trying to be a generic smartwatch, I think Apple will narrow its focus and make their wearable entry closer to what we see in the Nike Fuelband but on steroids. I suspect it could have a lot of new monitoring sensors and connect wirelessly to the iPhone, which then serves as a mediator to the iCloud. New services would come from that and eventually be sent to health care providers. I also think this is where the majority of Apple’s sapphire screens will be used since a health wearable demands an almost indestructible display to work properly and endure all types of physical activity

I believe we will see this health wearable this year and it will be version 1.0 of Apple’s move into health. Over the next year, they will enhance Healthkit’s abilities and attract many more developers to the Healthkit platform to help them enhance the overall Apple ecosystem for health related apps and services. Then, over time, move that data to the cloud and eventually, once the legal issues are ironed out with the various health laws and codes, make this data available to health care providers.

Although my suggestion that Apple’s wearable will be a health monitor is speculation, I see it as being very plausible and likely the device Apple brings out instead of trying to do an iWatch that tries to be all things to all people. As a matter of fact, I don’t believe Apple is doing an iWatch at all. I believe they are creating a powerful and stylish health wearable designed by Jony Ive. A wearable like this makes more sense in light of the powerful Healthkit program being created. It would be tied to this wearable and add specific value for all of Apple customers. More importantly, it moves the iPhone into the center of their program and could be the major motivator for future iPhone growth over the next three to five years and keep the iPhone Apple’s major cash cow for some time to come.

In fact, a service like this is critical to Apple’s future. While they can continue to innovate in hardware, it will become increasingly difficult to differentiate at this level. But if they can create services tied to the iPhone that enhance the iPhone as Healthkit and Homekit could, it might drive people to continue to buy and eventually upgrade their iPhones and keep them in the Apple ecosystem for a long time.

As stated above, I believe Apple’s next big thing will be to shake up the health care market and make themselves one of the most powerful health influencers in their own right, while developing a mediation business that could change the way an individual’s personal health information is monitored, managed and distributed.