Why Apple’s Wearable is a BFD – $AAPL

by CC February 7, 2014 11:54 am • Commentary

Or How I Learned To Stop Worrying and Let Apple Monitor my Body

Apple has an annoying habit of bragging about new product releases as if they were the first company in the world to conceive of and build that specific product (see MP3 Players, Netbooks, Smartphones & Tablets).  But what they have always had every right to brag about is bringing these not so original ideas to the masses by exponentially improving on what came before. By making the new product categories accessible and understandable and most importantly desirable, to the average person, AAPL has made itself the biggest and one of the most respected companies in the world.

The concept of wearables (wearable computers) is all the rage in tech right now (think Nike fuel band, Google Glass, Pebble Watch, etc.), but they sort of remind me of the years before the first iPod when your first adopter friend was showing off his, very cool at the time, $500 dollar Mp3 player that held 60 songs. Then Steve Jobs comes along with one that has an easy to use interface with a button and scroll wheel and oh by the way, stored about 20,000 songs. He pretended like they invented the MP3 player, but considering the massive improvements they made to the category, for all intents and purposes, they basically did; they re-defined the existing product landscape and brought it to the masses.

So we find ourselves in a similar moment with wearables. There’s some stuff out there that’s doing pretty well, other stuff, not so well. What’s interesting to me is looking at what’s doing well and why. Contrary to a lot of predictions, I’d say the breakout hit of the wearables has not been in the Dick Tracy style watch/phone, or the RoboCop style glasses, but in the more basic fitness/health bracelets. These devices include Fitbit and Nike Fuelband and others, and have caught on with a wide range of people from 25 year old triathletes to 70 year old retirees.

Why? Well, there’s a term for why social media sites like Facebook and Twitter get so many page views, and that’s FOMO, or the fear of missing out. People go back to Facebook and Twitter multiple times a day due to the fear of missing out on some conversation or update or whatever. The addiction is powerful, and these companies spend a lot of time thinking about how to make that addiction more powerful.

With these health wearables, there’s an even more potentially powerful draw – the fear of dropping dead at any moment (FODDAAM™). This is a particularly lucrative addiction to monetize due to the fact that the baby boomers are getting to that age, and, last I checked, the death rate of humans still stands at 100%.

There has been lots of chatter swirling around Apple’s potential iWatch, a device that has been rumored for years and that CEO Tim Cook has hinted to as a category of interest.  If just a bit of the rumors swarming around the blogosphere are true, Apple once again has the potential to change the game. Here are some of the particular rumors and news events that I’m most interested in, from Rock Health’s Five Signs Apple is Creating a Health Product:

1. “The whole sensor field is going to explode.” -Apple CEO Tim Cook

Tim Cook has indicated that wearables are an area of intense interest for Apple, labeling it as a “key branch of the tree” for the post-PC world at D11 last year.

2. The M7 coprocessor.

Apple has already released dedicated hardware for tracking health. The M7 coprocessor is included in every iPhone 5s and has been designed specifically to monitor physical activity, using motion data from the phone’s embedded sensors. The chip has been engineered from the ground up to sip power, extending battery life while allowing for high resolution capture of activity data. Leading fitness apps including Moves, Nike+ Move and Fitbit’s MobileTrack feature take advantage of the new hardware.

3. They’re hiring medical device experts.

4. Intellectual property.

In 2009, Apple filed a patent for a “seamlessly embedded heart rate monitor” and was ultimately awarded the patent by the United States Patent and Trademark Office (USPTO) in late 2013. The patent covers the use of embedded sensors to measure a user’s heartbeat, heart rate, or other cardiac signals.

5.  Check-in with the Food and Drug Administration (FDA).

Senior Apple executives met with FDA leadership, including the Director of the Agency’s Center for Devices and Radiological Health, which has oversight of medical devices, and Bakul Patel, the author of the FDA’s guidance on mobile medical applications.

So, it’s pretty obvious that they are working on at least some component of one of their products having an emphasis on health monitoring.

But why is that a BFD?  Nike and others are already in this area, at least on a basic level, and it’s not a game changer, just a nice product line that seems to be doing well. But to think about this you have to think about another high profile product from another high profile company:  Google Glass.

I wasn’t in on the meetings about Google Glass, but I’d be willing to bet that at the first pitch meeting, the conversation quickly turned from how cool it would be to have all of this augmented digital world information in front of your eyes as a consumer to something a lot more important to Google – tracking the data of what that consumer does all day in the real world, not just the online one. (Picture Google not only being able to track your GPS coordinates but what you’re looking at.)

This is the next big thing for these companies. Think Minority Report. Wearable devices, combined with what’s happening in Big Data, holds the potential to replace those fears of being micro-chipped and tracked all day long in some futuristic sci-fi dystopia, by making it all voluntary. And why is the FODDAAM™ part of including health monitoring in these devices so important? Are you going to voluntarily wear this 24 hours a day?

Google founder Sergey Brin poses for a portrait wearing Google Glass glasses before the Diane von Furstenberg  Spring/Summer 2013 collection show during New York Fashion Week

Or something more like this:

concept by Todd Hamilton via Business Insider

Especially if you believe that if you take it off, you might miss the only warnings sign that you’re about to have a heart attack.

So the health monitoring part is the hook that keeps it on your wrist, but what else can it do? Going back to the Minority Report comparison, remember when the billboards would change for Tom Cruise specifically when he walked by? That’s a pretty cool concept that some futurist came up with, but they missed the obvious next step. Apple could not only change that billboard for you, they could theoretically monitor your reaction to it as well!

There’s so much potential data here waiting to be mined. The possibilities are endless. And I guarantee this stuff is being discussed at meetings at Apple and Google right now. But to me, the health monitoring is the hook that makes Apple’s potential device the BFD that would get the average person to think about wearing some dorky thing on their body.