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The Scaled-back Apple Watch Showcases the Challenges to Enter the Health Monitoring Market

WSJ today reported that the upcoming Apple Watch will feature fewer health sensors than originally planned. The article cited people within Apple saying that efforts to integrate multiple health sensors include ECG, blood pressure, and skin perspiration, ran into performance issues. After extensive trials and tests to improve sensor accuracy and reliability failed, Apple decided NOT to include such sensors in the first-generation Apple Watch, according to this article.

The news is maybe welcoming to many consumer health device OEMs who are nervously watching and waiting for the Apple Watch’s impact to unfold. Like iPhones that have rendered so many single-functional device categories into obsolescence and left many traditional consumer brands in shackles, many fear that the launch of Apple Watch will kick off the era of multi-sensor health monitoring design and push for the consolidation of brands who make individual ECG meters, blood pressure monitors, and pulse oximeters. Now it seems the market and consumers have to wait a bit longer.

At several occasions last year when I spoke to seasoned medical tech executives, they expressed a mixed feeling about the influx of new health monitoring devices from startup companies and big tech names. They welcome competition and are excited about the prospects that the momentum in the consumer health market will help educate their target users to become more health conscious and more aware of various tools available. They also hope that doctors and care professionals will encourage consumers to self monitor and share data with them, so they can more effectively help consumers manage health. On the other hand, these executives are also concerned that these new brands would bring less sophisticated technologies to the market and confuse consumers with poorly collected data and attract unwanted regulatory scrutiny to this market.

They argue that measuring vital signs is not as easy as one would assume. Not only do the sensor designs need to be carefully calibrated in the lab, they also need to be validated via human trials in real-world use scenarios. An executive from a blood pressure monitoring company told me once that there is a good reason that the best body part for measuring blood pressure is human’s upper arm, and not all the novel methods on the market today can match the accuracy and reliability of this gold standard.

Today’s Apple news kind of validates such concerns. One the one hand, I applaud Apple for following its principle of not bringing inferior user experience to the market. On the other hand, it illustrates that the health monitoring technology still has frontiers to conquer; even a large technology company like Apple faces challenges to deliver a perfect-10 experience to this market.

Will Apple still sell millions of Apple Watch? The company reportedly has placed its first order of 5-6 million units for launch. Its selling points may no longer include health monitoring, and many folks on the Wall Street may begin to worry. But I think Apple will do fine in this first round—the Apple Watch is never a one-play product. Its other functions, including notification, fitness monitoring, Apple Pay integration, and potential HomeKit integration, can easily appeal to Apple’s cohorts. Limited health monitoring functions on Apple Watch are good news to Apple HealthKit partners, because Apple will rely more on these partners’ devices to create a health data ecosystem. As I see it as an analyst covering the health technology market, Apple Watch’s launch is less critical to the healthcare industry than the success of the HealthKit platform.

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