Tech firms haven’t cracked med­i­cal mar­ket yet but Ap­ple’s new strat­egy could work

Global Times - - Biz Comment -

Ap­ple’s new in­no­va­tion is to tap fear as well as greed. The $1 tril­lion firm’s new watches can de­tect falls and heart con­di­tions, mak­ing them a use­ful gift for grandma, as well as hypochon­dri­acs ev­ery­where. Mean­while, aes­thetic ap­peal and bet­ter cam­eras should be enough to con­vince many users to pay up for an im­proved phone.

Tech firms have been eye­ing the vast and grow­ing med­i­cal mar­ket for a while, with mostly medi­ocre re­sults. Hefty reg­u­la­tion and the re­sult­ing long pro­duct­de­vel­op­ment cy­cles are an un­com­fort­able fit for im­pa­tient Sil­i­con Val­ley firms. Gee-whiz-sound­ing prod­ucts, such as Al­pha­bet unit Google’s smart con­tact lenses for mea­sur­ing glu­cose lev­els in di­a­bet­ics, of­ten end up shelved due to the dif­fi­cul­ties of pro­duc­ing some­thing that’s both ef­fec­tive and use­ful.

Ap­ple’s watches break this pat­tern. The abil­ity to de­tect ac­ci­dents or heartrhythm ab­nor­mal­i­ties and no­tify the wearer’s fam­ily mem­bers, emer­gency re­spon­ders and doc­tors is a promis­ing way to tap an ag­ing pop­u­la­tion and those wor­ried about them. The big ques­tion mark is how well it works – but the fact Ap­ple has re­ceived US Food and Drug Ad­min­is­tra­tion ap­proval for its elec­tro­car­dio­gram fea­ture au­gurs well.

Watches haven’t been a dom­i­nant prod­uct for the firm. Ap­ple lumps sales with those of AirPods, Ap­ple TV and Beats prod­ucts when it re­ports, and to­gether they ac­count for 7 per­cent of to­tal rev­enue. Yet these busi­nesses have col­lec­tively been grow­ing far faster than the com­pany as a whole, at nearly 40 per­cent an­nu­ally. Adding med­i­cal fea­tures prob­a­bly will make the de­vice into a break­out hit.

Mean­while, Ap­ple’s new iPhones show its con­tin­u­ing abil­ity to tap van­ity and greed. The de­vices have plenty of use­ful im­prove­ments such as faster pro­ces­sors, dual-SIM sup­port so users can use two op­er­a­tors, and bet­ter dura­bil­ity. But what will prob­a­bly con­vince peo­ple to up­date their de­vices – at higher prices – is that they are vis­ually ap­peal­ing, take bet­ter pictures, and af­ford the chance for con­spic­u­ous con­sump­tion. For Ap­ple, van­ity is a virtue.

The au­thor is Robert Cyran, a Reuters Break­ingviews columnist. The ar­ti­cle was first pub­lished on Reuters Break­ingviews. bi­zopin­ion@glob­al­

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