June 6, 2014 7:00 pm JST

Apple flexes healthcare muscles with new wearable device

YUICHIRO KANEMATSU, Nikkei staff writer

SILICON VALLEY -- Apple is getting set to move to its next stage of growth with a wearable health-monitoring device, hoping to establish a solid foothold in the promising healthcare sector.

     The U.S. firm said Thursday at its annual Worldwide Developers Conference that it will this autumn bring to market an upgraded mobile operating system for smartphones and tablet devices. The new watch-like wearable gear will run on this OS, which will be equipped with a centralized function to manage users' biometric information via smartphones. It is expected to hit the market in October.

     Though the details of services have yet to be released, specs for the new product are being finalized, according to industry sources. It will likely use a curved organic light-emitting diode (OLED) touchscreen and collect health-related data, such as calorie consumption, sleep activity, blood glucose and blood oxygen levels. It will also allow users to read messages sent by smartphones.

     Apple appears confident of the new product. According to a parts manufacturer, it plans monthly commercial output of about 3-5 million units, which exceeds the total global sales of watch-like devices last year. This confidence is backed by its partnerships with high-profile hospitals -- it has teamed up with the Mayo Clinic and the Cleveland Clinic, U.S. health institutes based in Minnesota and Ohio, respectively, to develop specific ways of analyzing the collected data and applying it to actual health management.

     Apple is also in partnership with Nike. According to sources familiar with the matter, the two companies have likely agreed to integrate their services in the future. The sports equipment maker is expected to eventually pull out of the device business to concentrate on services.

Services key

Health-monitoring services have been around for some time, but they did not really take off due to limited popularity. Google, for example, launched Google Health, a one-stop health-tracking database for individual use, in 2008, but scrapped it at the end of 2011. In Japan, Omron, a medical equipment maker, had a head start in the sector, but limiting services to its own devices meant it lost opportunities for service expansion.

     John Wald, medical director for marketing and public affairs at the Mayo Clinic, attributed the low prevalence of health-monitoring services to a lack of easy-to-use mobile devices. He also pointed to insufficient coordination with medical institutes.

     Apple is well-positioned to come up with an easy-to-use product due to its design-focused development capabilities. In addition, the new OS is designed to manage health-related data collected through platforms developed by other companies.

     Apple expects linking to health-monitoring apps offered by others to gain access to massive amounts of data, such as heart rates, blood pressure, sleep cycles and calorie consumption. Though handling personal data requires due consideration, the analysis of big data can allow it to collaborate with a range of businesses in the fields of insurance, medicine, preventive services and advertising.

     Rivals are also broadening their reach in the healthcare sector. Samsung Electronics offers an OLED pedometer that keeps track of the user's heart rate in addition to footsteps via an installed acceleration sensor.

     Sony Mobile Communications is looking to offer lifetime support beyond health through its SmartBand, released last month. The gadget is designed to store all logs of a user's daily activity from exercise amounts, sleep quality to locations, weathers, phone calls the person made. "We want to help users enrich their lives," said a company official.

     Samsung and Sony hope to parlay their early product launches into strengths against Apple, but when it comes to a market share of smartphones and the availability of apps, the U.S. firm has a distinctive edge, except pricing. Most wearable devices are selling for less than 20,000 yen ($193), but it is widely expected that Apple's new gadget will carry a price tag above them. Whether that is reasonable or not will depend on its functionality and design.

     Apple has been criticized for having lost its spirit of innovation since Steve Jobs, the company's charismatic founder, passed away in 2011. Management has promised investors and fans that it will come up with a new product category in the second half of 2014.