The smartwatch market is enjoying its fastest growth phase at the moment and with only one in ten smartphone users globally sporting a smartwatch , the category is up for grabs. The current landscape is dominated by Apple with Apple Watch and Apple Health, which has pioneered the category.  The focus on design, style and capabilities has made Watch an ultimate device on your body to advance health and fitness goals.

It has been more than eight years since the first Apple Watch launched. With every iteration Apple has added new cutting edge technology and features in the form of advanced bio-sensors, software, algorithms to accurately track heart, respiratory, sensory, mobility-related and other important health and fitness indicators.

Apple released its latest “Health Report” showcasing the research-led innovation it is bringing to the health and fitness segment via its products such as Apple Watch and iOS ecosystem, making it a key driver to digitally transform the healthcare sector.

Apple Watch + Health Ecosystem, a "Gold Standard" in Healthcare Segment

Source: Apple Health Report 2022, Counterpoint analysis

• With healthcare a highly regulated vertical with a growing volume of sensitive data collected through sensors, analyzed and consumed by the user or medical practitioners, data privacy and security should be foundational for any digital platform.
• Privacy and security has been at the core of Apple’s platform and also from a positioning perspective. These elements help protect its user base while offering  differentiation from competition and attracting users to its ecosystem.
• With this at the core, Apple’s work on advanced health apps has progressed well; it is currently based on two key pillars:
  • Empowering users in their personal health journey– centralizing health data in one place, adding new features to track overall health intelligently and integration with third party apps, services and healthcare providers with proper consent and privacy controls
  • Supporting & collaborating with the health and medical ecosystem – working with universities, hospitals, researchers, and governments to be a conduit for physician-patient digital health data, analysis, discovery, tracking and diagnosis along with emergency, safety and healthy lifestyle initiatives
• Apple has been adding a variety of features to the Apple Watch and Apple Health platform over the years and has certainly taken the Apple Watch capabilities to a level where it closely qualifies as a meaningful healthcare device.
• While cardiac, heart and sports, fitness, and mobility tracking has been at the core of Apple’s Health platform, the company has also added other meaningful capabilities such as women’s health, sleep health, hearing health, timely reminders on handwashing, medication and mindfulness, among others.

Meaningful Apple Health Platform Capabilities

Source: Apple Health Report 2022, Counterpoint analysis

• Medical ID is another powerful feature  as the phone and watch becomes the best identity one carries and a critical identity and information tool in emergencies.
• Further adding gamification, trend analysis, goals and services such as Fitness+ brings a sense of community and competitiveness for users to be motivated to prioritize fitness and health. These are super sticky features for users and help them remain loyal to the Apple ecosystem.
• With the integration with third party applications, services via HealthKit leveraging the huge developer ecosystem, Apple has maximized its value proposition for users.
• Popular services such as Headspace, Calm, Nike Run Club, Strava, MyFitnessPal, Qardio, Ten Percent Happier, are some great examples of the ecosystem benefits and network effects for the Apple Watch & Health platform.

Apple’s Health Research Partnerships & Science-Led Innovations Catalysing “Digital Intelligent Healthcare”

• According to Counterpoint’s Model Level Sales & Installed Base Tracker, Apple has a strong base of close to 100 million Apple Watch users and more than 1 billion Apple iPhone users spread out globally, giving a great foundation for the research community to track, analyze and tackle not only global but region-specific health-related challenges at scale.
• This unprecedented scale and near real-time access to users and their health data, in a very privacy-centric way, has never been available. Apple has removed this major bottleneck with its technology leadership, scale and vision.
• As a next step, offering innovative tools such as ResearchKit & Apple Research app empowers researchers to advance their research, discover potential patterns and solutions to health problems quickly and efficiently.
• Apple’s Investigator Support Program is one such initiative to remove any research related hurdles – from seeding Apple Watches to collecting data to integrating data and studies across the globe.
• Some examples:
  • Apple’s first-of-its-kind Apple Heart Studyto detect irregular heart rhythms
  • Japan’s Keio Universitystudy on heart health
  • Heart Failure Studyat UHN, Canada exploring population-level indicators of heart failure
  • Mom Genes Fight Post-Partum Depressionat UNC to explore a genetic cause to post-partum depression
  • Mount Sinai Warrior Watch Studylooking at the psychological effects of COVID-19 on healthcare workers
  • Digital Mental HealthStudy at UCLA exploring greater insights into anxiety and depression
  • Autism & Beyond study by Duke Universityto better understand and identify risks for development in young children
  • Many third-party apps are leveraging tools such as Apple’s SensorKit and CareKit to innovate on top of the Apple Health platform. Examples are companies such as Butterfly IO+ (portable ultrasound), NightWare System (helping PTSD & trauma patients) and Stryker’s Triton AI (for post-partum care).

Key Health Tools From Apple Enabling Industry Innovation

Source: Apple Health Report 2022, Counterpoint analysis

Key Takeaways:

• Apple’s 2022 Health Report highlights that “Rome was not built in a Day” and that it’s health platform cannot be built alone. It has taken Apple almost a decade of innovation and partnerships to reach the current stage, which is still considered nascent. Having said that, no other player has been able to achieve this at scale and with a privacy-led value proposition.
• Technology companies such as Apple can have a key role in providing the technology empowering the entire ecosystem – users, developers, researchers and the public sector – to build an innovative and research-led digital healthcare platform.
• Apple has taken the lead to digitally transform the healthcare vertical and other players such as Google have their work cut out for them to build something as robust and with a higher level of privacy and trust.
• Apple can expand the portfolio of its offerings beyond iPads, iPhones and Apple Watch to drive further healthcare innovation with its design-thinking, research and platform leadership across hospitals, nursing, clinical, patient care and medicine.
• Technologies such as 5G, Augmented Reality and Virtual Reality will play a key role for Apple to build even more pervasive, personal and immersive healthcare experiences
• Apple also has a greater revenue opportunity in the future to enter the trillion dollar health insurance markets – potentially as part of Apple One or Apple Care+ subscriptions, which would boost its Customer Lifetime Value (CLV). This should be a huge boost to Apple’s top and bottom lines and give further support to its market cap.