Apple’s New Smart Watch Focuses On Health To Drive Growth

by Craig Leslie | Sep. 20, 2018

Apple kicked off the company’s Apple Event day with the introduction of the new Series 4 Apple Watch. As anticipated from leaked photos, the new version maintains the same exterior dimensions as the Series 3 but has 30% larger screens. It has louder speakers, a faster dual-core processor, and greater interaction with the Siri digital assistant – all very useful and largely anticipated upgrades.

More significant are new functions that turn the watch into a medical device. The new watch comes with a health sensor that lets the user take an electrocardiogram (ECG) that measures the heart's rhythm and detects atrial fibrillation or heart failure and notifies the user of any irregularities. The company has gained clearance for the ECG app from the U.S. Food and Drug Administration, claiming this to be a first for smart watches.

The watch is also equipped with sensors that are able to detect when a user falls. If a fall occurs, the user can call for help via the Siri assistant without the need to locate a phone device. If the watch detects that the user has fallen and not movements have occurred for more than a minute, it will automatically send an alert and contact emergency services.

To emphasize this focus on health, Apple CEO Tim Cook stated "Apple Watch has become an intelligent guardian for your health."

Focusing the product on health applications serves a number of functions for Apple:

  1. Recent updates expand upon current Apple Watch fitness apps, increasing the products functionality and attractiveness to the company’s traditional target market. Fitness tracking is the primary usage of smart watches, with 90% of smart watch owners stating that they use some form of fitness related function on their devices. 
  2. The addition of heart and balance/fall applications makes the Series 4 more relevant to older users who are more susceptible to these type of health issuesAdoption by older users lags far behind younger generations as 23% of U.S. Millennials and Gen Z led households own smart watches vs. 18% of Gen X, 9% of Boomers, and only 1% of Silents. With the 40 and older population representing almost half of the U.S., even an incremental increase in Apple Watch sales to these consumers represents a significant market opportunity for Apple.
  3. The new health applications support a larger push in to healthcare, which Apple CEO Tim Cook has stated to be a focus area for the company. If the new applications are successful they will certainly be followed by a slew of other monitoring apps. New apps would likely tie in the company’s CareKit and ResearchKit apps to provide users with a means to coordinate their chronic disease care and enable researchers to use Apple Watches to conduct research studies. This would assist Apple in forming closer relationships with both their consumers and the medical industry, positioning the company for further health industry expansion.

The Apple Watch has not had the breakout success the iPhone has, however, the company claims the Apple Watch is the world’s best-selling smart watch. They are well positioned to capitalize on the rapid growth of the smart watch category. Despite being in an early adoption stage in the technology adoption lifecycle, 16% of U.S. broadband households now own a smart watch, up from 6% in 2015. With penetration concentrated in early adopter groups, this market has a great deal of room to grow.

Central to Apple’s smart watch strategy has been to convince people to buy a wrist-mounted device that largely duplicates the functions of their existing smartphones. Perhaps positioning the product as “a guardian for your health” will help alter the perception of the Apple Watch from a status symbol to a device of practical application and be the catalyst for wider adoption. 

Further Reading:

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