Apple Watch Takes Tech Giant into New Territory

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Apple on Tuesday unveiled a new product category for the Cupertino-Calif.-based company—a smartwatch designed to provide consumers with a variety of technology services including comprehensive health and fitness apps to help them lead healthier lives.

Called Apple Watch and available in early 2015 starting at $349, the device includes an activity app designed to help motivate users to be more active, and a workout app that provides metrics during workout sessions.  Billed as bringing together the capabilities of “an all-day fitness tracker and a highly advanced sports watch in one device,” Apple Watch uses an accelerometer, a built-in heart rate sensor, GPS and Wi-Fi from an iPhone to provide an overall picture of a person’s daily activity.

The activity app measures three separate aspects of movement: calories burned, brisk activity, and how often a user stands up during the course of a given day. The workout app allows users to set specific goals for popular session-based workouts, such as running and cycling. And, the companion fitness app on iPhone collects activity data to provide activity history in order to suggest personal goals, reward fitness milestones and to motivate users.

“Apple Watch is the most personal device we’ve ever created,” said Tim Cook, Apple’s CEO. “Apple builds great products that enrich peoples’ lives and arguably we can take that to a whole new level with Apple Watch.”

At the same time, Cook said that the Apple Watch “requires the iPhone [5, 5C, 5S, 6, and 6 Plus] because it’s been designed to seamlessly work together…This means that over 200 million people already can use Apple Watch.”

However, Niharika Midha, medical device analyst at GlobalData, argues that the significant dependence of the health and fitness trackers on the iPhone’s Wi-Fi and GPS capabilities in comparison to other vendors is a drawback. For example, Midha said the Samsung Galaxy Gear S has a built-in GPS and can be used to track activities without the phone.

Apple Watch is designed for reaching a range of fitness levels “from people who just want to be more active throughout their day to those who work out a few times a week to athletes committed to improving,” according to the company. The smartwatch comes in three versions—Apple Watch, Apple Watch Sport and Apple Watch Edition.

But, critics like Greg Caressi, senior vice president of healthcare and life sciences at Frost & Sullivan, makes the case that the consumer base for Apple Watch will likely skew heavily towards those who are relatively healthy and are already tracking their health and fitness. “While the [Apple Watch] will likely expand the user base of wearables beyond the current quantified self-movement to some of the ‘worried well,’ it won't likely penetrate many of those who are the highest risk and highest cost as long as it remains a consumer device,” said Caressi.

GlobalData’s Midha agrees that “since most of the available devices are targeted towards the consumer group, the overall impact of these on current management practices in healthcare is difficult to measure at this point in time. In the future, if there were smartwatches to be released specific to certain diseases, that would be a significant revolution.”

Midha says Apple Watch “is not significantly better than the existing devices in terms of health tracking mechanisms.” Likewise, Paul Jackson, media and entertainment practice lead at Ovum, says Apple Watch's "health and fitness apps look nice, but don’t improve significantly on other existing (and cheaper) solutions for those with more than a passing interest." However, Jackson said that Apple Watch “will thrive though if the various major players (Nike, Fitbit, Garmin) get behind the apps ecosystem.”

(See also: Can Google Succeed with Health Apps?)

Apple Watch has some impressive capabilities for consumers, particularly the Apple Pay feature to make mobile purchases, says Naveen Rao, a patient and consumer engagement analyst at Chilmark Research. But its healthcare features are clearly rooted in fitness and not clinical medicine, at least for now, he adds. In the Apple presentation on Sept. 9, use of the watch for remote monitoring, caregiver communications, medication adherence and any other clinical uses were not mentioned, Rao notes. Such uses likely would fall under Food and Drug Administration regulation, which the company is not yet ready for so it need not advertise the watch as a medical solution, Rao believes. “How deep they go on the clinical side remains to be seen.”

Competitor Samsung beat Apple to the smartphone market and has not yet gotten a lot of traction, but that soon could change, Rao says. Consumers follow Apple trends and once Apple legitimizes the market, a rising tide will lift all ships.

Price, however, could be a barrier for widespread use of Apple Watch, which clearly targets more affluent audiences, according to Rao. He notes that one early Apple Watch partner is the upscale W Hotels and Resorts chain, with an app that will unlock a customer’s room door.

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