On Tuesday, Apple gave a starring role at its fall product launch event to the Apple Watch - letting it take the spotlight that is usually reserved for a new iPhone.
The event is the second one streamed online from its Silicon Valley campus, known as Apple Park, since the global pandemic forced it to switch to virtual product launches. Apple themed the event "Time Flies," an apparent marketing tease for its watches.
While the absence of the iPhone's shadow at Tuesday's event may just be a quirk of pandemic-related supply-chain disruptions that Apple says have delayed production of its next smartphone, it also offered Apple an opportunity to showcase its six-year effort to break into the health care industry. The Apple Watch is the physical manifestation of the company's health care play, and perhaps the most important but least understood prong of the company's new business model anchored around services rather than gadget sales. The announcement also comes during the peak of a global pandemic in which the conversation about health and technology has accelerated.
Apple has said its participation in the health care industry has been aimed at helping people, not necessarily to benefit its bottom line. And at the virtual event Tuesday, it highlighted vignettes, showing how the Apple Watch keeps people healthy, even saving their lives by alerting them to heart problems.
The Apple Watch 6, the company announced, will include a new sensor that can detect blood oxygen levels, often called a pulse oximeter, which the company said will deliver helpful information about health. Apple executive Sumbul Desai said the tool can help detect early infection of COVID-19 and announced a new research study with the Seattle Flu Study and University of Washington that will examine the relationship between blood oxygen, heart rate and the coronavirus.
As sales of iPhones have, until recently, been declining, the company has been looking for new ways to make up for lost revenue. Mainly, it has done so by finding ways to sell subscriptions for music, TV and cloud storage. Analysts long expected Apple to bundle those products into one offering, like Microsoft did with its Office suite in the 1990s. On Tuesday, Apple finally did that, announcing Apple One, a new subscription bundle ranging from $15 a month to $30, that includes many of its digital products. It also announced a new service for Apple Watch users, called Fitness +, which will cost $10 per month or $80 a year.
But health care is different, and Apple's route to profitability is murky. Unlike other services, Apple doesn't charge consumers or companies for any of its health offerings, other than for the watches, which cost from $400 to $1,500 for the most recent version. Analysts say Apple will shy away from profiting directly from the data collected by researchers and drug companies that use Apple Watches in clinical trials.
On Tuesday, Apple announced an inexpensive version, called the Apple Watch SE, which will start at $279, compared to $399 for the Apple Watch 6.
While six years is a long time for the technology industry, it's a blip in the medical field, where change is slow and arduous. Apple's investment is only beginning to bear noticeable fruit, and experts in the pharmaceutical industry say it could take years more for the company to become a major player in the field. As Apple builds a track record for producing reliable research based on watch data, it will probably add more sensors, expanding the breadth of research possible with the device. One day, Apple Watches could be a common component of drug and device studies, experts say, even if that is a far off and ambitious goal.
Apple isn't alone in its drive into health care. Google's Verily is making a concerted push into the clinical trial industry. Amazon, which acquired prescription service PillPack and online symptom-checker Health Navigator, has partnered with Berkshire Hathaway and JPMorgan Chase to lower health costs. Microsoft's Healthcare NExT initiative is focused on artificial intelligence in health care.
Apple Watch wasn't the first smartwatch, or even the first health-related one. Fitbit and Jawbone pioneered the fitness tracker market and new start-ups are pushing the ball forward on hardware. Oura, for instance, packs a lot of health-related sensors into a simple ring. But none of those companies have Apple's massive install base of loyal customers. Apple Watches outsell the entire Swiss watch industry, according to a Strategy Analytics report.
There are reasons to buy Apple Watches beyond health. For customers locked into Apple's ecosystem, they make for a nifty accessory that can adjust AirPods' volume or unlock MacBooks without a password. Because of the sheer size of its user base, Apple can corral thousands of research subjects in a short period of time.
(Amazon CEO Jeff Bezos owns The Washington Post.)