Apple Watch and Cellular Connectivity - from Internet Experiment to Healthcare Application

We are introducing the internet to more and more diverse places through the wide deployment of digitized, ‘sensor’ized, connected objects. Each new introduction is an experiment. And the question we are asking is “does the internet make sense here and if so, what are the use-case scenarios?”

When Apple announced the Apple Watch in September 2014, and released it in April 2015, most observers focused on the purported killer applications of the watch. The broader and more relevant question centered on the new use-case scenarios that would materialize as a result of having the internet on our wrists. After all, most users would have their smartphone with them so the question really was, “what does extending internet access by the length of our arm net us?”

With the introduction of cellular connecting to the newest Apple Watch announced earlier this month, the fundamental question we are now asking is, “what does having the internet on your wrist mean when you can be further separated from your phone?” Now however, two years and several iterations removed from the original Apple Watch release, Apple has a much better sense of the use-case scenarios that are becoming relevant and meaningful.

Consider the first commercial for the Apple Watch.

Apple highlighted the following applications in that first commercial spot:

  • Clock, Alarm, and time features of course
  • Maps
  • Airlines tickets
  • Weather
  • Information status from other connected devices (electric car charging status)
  • Movie tickets
  • Payments
  • Calendar and appointments
  • Alerts for incoming calls, texts and other notifications
  • Messaging
  • Localized control for things like music
  • Fitness
  • Style
  • And a portfolio of diverse apps too numerous to list individually

Unsurprisingly, Apple threw everything at you in that first commercial to see what might resonate with you most. Fitness is actually one of the last shown in a long series of possible applications you might want to employ. Follow-on commercials like this one in the months and years that have followed highlight the device as little more than a highly customizable, stylistic wardrobe decision.

 

So how should we think about cellular service bring internet access to the wrist? What are the use-case scenarios that will emerge? Make no mistake, cellular service on watches isn’t for making calls despite what you might have seen. That Apple chose to demo this was simply to highlight what was now possible. But cellular connectivity in the watch, like cellular connective in an increasing array of digital devices, isn’t about phone calls. We don’t use our smartphones to make calls today. Why would we think that we are going to start making cellular calls from our wrists? Here are the data. While we spend some four hours a day on average on our smartphone, we spend the vast majority of that using apps and a very small fraction making and taking calls.

ActivityEstimated Daily Use (Minutes)Estimated Daily Use (% of Total)
Source: Astra Insights
Total Smartphone Use250100%
Total App Use16767%
Social Media Platforms (Facebook, Instagram, Twitter, Snapchat)12048%
Total Communication6928%
Email2510%
Text3815%
Phone62%
Browser146%

Now consider Apple’s most recent Apple Watch commercial. Gone are many of the use-case scenarios from their first commercial. Their most recent commercial focuses on health care and wellness related topics almost exclusively.

The cellular connectivity capabilities of the Apple Watch are to send medical information to medical-related services and health care providers. That application isn’t materializing immediately, but it will come. Apple is becoming a health care company. Others will follow. The entire industry will sway in that direction. It’s Clay Christensen’s "law of conservation of attractive profits." When attractive profits disappear at one stage in the value chain because it is commoditized, attractive profits will emerge elsewhere in the value stack. As profits are being squeezed from hardware, it’s moving to adjacent areas like services.

More still needs to come to fruition. Battery life for one must be extended significantly. Sleep monitoring will be an important element of a holistic health assessment and the current battery life doesn’t sufficiently support that use-case element today. Not everything will be immediately heath cared. And not everything needs to be health care related. There will be other features to bridge us in that direction, but overtime health care related services and applications will become the dominant killer app for these suite of devices. Apple is moving us in that direction.

This week the FDA approved the first continuous blood sugar monitor for diabetics that doesn’t require backup finger prick tests. Now imagine throwing that into something that looks like a watch. This is our future. And this is why cellular connectivity will be meaningful.