Do Apple's Latest Hires Suggest a Health and Wellness Wearable Device Is Coming?

Apple has been buying up talent with expertise in medical technology, which could point to the company getting ready to release a wearable. The implications might even be bigger than that.

May 7, 2014 at 11:02AM

Quietly Apple (NASDAQ:AAPL) has been putting together a team of medical technology executives that some speculate offers a hint at the direction the company will take when it makes its expected entree into the wearable devices market.

In the past year the company has hired at least half a dozen prominent experts in biomedicine, according to LinkedIn profile changes, Reuters reported. The news service could not pinpoint an exact number of hires, but noted that "much of the hiring is in sensor technology, an area Chief Executive Tim Cook singled out last year as primed 'to explode.'"

The hiring spree suggests that Apple is looking at adding health technology either to new products or its existing ones. The company could be looking to help customers monitor everything from blood-sugar levels to caffeine intake, and generally track nutrition and health in ways that go beyond what fitness-only devices already on the market do. 

"This is a very specific play in the bio-sensing space," Malay Gandhi, chief strategy officer at Rock Health, a San Francisco venture capital firm that has backed prominent wearable-tech start-ups, told Reuters. 

Apple has been quiet as to whether it plans to enter the wearables market, but it has registered a Japanese trademark for iWatch and the company has filed several patents that suggest it is working on a wrist-worn device. The company also has a patent "on a smart earbud patent that could track steps and detect gestures of the head," according to the news service.

Whatever form it takes it appears helping people monitor their health is part of Apple's future.

Not just a watch

Apple might be building a watch, but signs also indicate the company might be working on a marketplace for health services -- a sort of of iTunes for health and fitness.  

The company is also rumored to be launching a Healthbook app later this year as part of its next operating system, MacRumors reported. The app would serve as a holding place for health-related data acquired from a variety of sources. The app would likely integrate data from Apple sources as well as partners.

One Apple partner -- Nike (NYSE:NKE) -- recently stopped plans to produce a second generation of its FuelBand wearable. 

The company did not stop working on its Fuel software, which works like a super-charged pedometer, tracking everything from distance and speeds to goals, heart rate, and all sorts of of other things. (I wrote about this in the article "Why Nike Is Stepping Back From Wearable Technology"). Fuel is already used by Apple in iPhones and iPods so integrating it into an Apple wearable makes sense especially now that Nike is not making a competing device.

It seems likely -- based on Apple's history of product launches -- that if the company enters the wearables market it won't offer a watch that's similar to what's already out there. The iPhone and iPad were category creators, delivering products beyond what consumers had considered.

But Apple does not always innovate and revolutionize. The company also launched the slightly disappointing Apple TV, which at its launch was sort of a "me too" product, not much different from Roku's set-top box. These med-tech hires however suggest that whatever form an Apple wearable takes it won't be just an iPhone for your wrist.  

How big is the wearables market?

According to the Consumer Electronics Association, the wearable fitness market will top $1.15 billion this year, up 35% from last year. 

Bloomberg also reported in November 2013 that "wearables are poised to take off as consumers seek new ways to weave technology into everyday life," citing a report from IHS Global Insights that said the market could grow to about $30 billion by 2018.

Add in the fact that Apple may well be making a broader health play than simply selling wearable devices that offer health functions and the market could grow big enough to be significant even for a company that had $43.6 billion in revenue in the quarter ending that ended in March. Wearables are also a hedge against the market shifting away from phones -- in 2014 Apple is expected to derive nearly 70% of its profits from the iPhone.


The current crop of wearable devices can politely be described as niche, but there is no guarantee someone -- be it Apple or a rival -- won't create a device that makes smartphones irrelevant. If Apple has already started down the wearable road it will be better positioned to react if another company innovates in a way that connects with consumers.

Health may be the next frontier

Perhaps no wearable has become a mass success because no wearable has done enough to excite the public. Health and fitness wearables have been tried and either failed or proved to be a niche market. Apple may be making a big play into health and fitness, but that's likely only one piece of the functionality to be offered on an Apple wearable. The iPhone is a success because it solves multiple needs in a single device -- it's a phone and a music player.

Health monitoring could be a key part of that if Apple finds a way to bridge the gap between hard-core fitness devotees and regular folks. Knowing your quarter mile times and tracking your pulse while running is useful to a small subset of the population. A device that tells you the exact impact of a drinking a late afternoon cup of coffee on when you will fall asleep that night while also suggesting an alternate drink based on what your body chemistry needs at the moment could be useful to all of us.

That is one example, but it's only a limited idea of the possibilities of what an Apple wearable working as a personal health assistant could do. 

Apple won't release a wearable that only does one thing well and it won't release a wearable that's like the ones already on the market because none of the existing wearables have sold enough to be worth Apple's time. Whenever Apple makes a wearable play, expect the device to offer a set of tools that consumers want even if they had never considered before that they wanted them.

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Daniel Kline has no position in any stocks mentioned. The Motley Fool recommends Apple and Nike. The Motley Fool owns shares of Apple and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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