The Apple Watch outsold the entire Swiss watch industry in 2019. Now let this reality sink in: five years ago, technology watchers said the Apple Watch was a flop and a disappointment.
What happened to the Apple Watch between 2015 and 2020?
Nothing.
It’s not about the watch. The success of the Apple Watch is all about wellness care.
When Apple launched the Apple Watch in 2015, CEO Tim Cook knew that its future depended not on people using the device to tell time and get directions. Apple had its eyes on the rise of wellness care.
Over the years, Apple developed the device to help people keep themselves fit and be more aware of their health. By 2020, the latest Apple Watch could help you track your workout routines, manage your diet, notify you if you have an irregular heart rhythm, and track menstrual cycles, among many other wellness-related features.
The Apple Watch hit the market as the wellness industry was taking off. Rising healthcare costs and changing consumer attitudes created a boom in wellness care, which includes fitness, dieting, and generally any self-care practice that keeps people healthy and away from expensive hospitals. By 2018, wellness had become a $4.2 trillion industry, growing annually at a 12.8 percent rate. As a result, by 2020, the Apple Watch had shipped 30.7 million units worldwide, compared to 21.1 million for all Swiss watch brands combined. And wellness care shows no signs of slowing down.
But its success is not a matter of developing the right product for the right time. The Apple Watch is one element of a broader strategy for Apple to be the data backbone of healthcare. That strategy has three key elements:
- Hardware: the Apple Watch (as well as the iPhone) to create an ever-present device platform for managing personal heath. Although it has taken some time, Apple has applied its vaunted design skills to make the Apple Watch a leading wearable. Consumer tech watchers now follow Apple Watch updates with the excitement and curiosity that they’ve reserved for the iPhone over the years.
- Software for patients and providers to monitor and share data. The Apple Watch is useless as a wellness device without healthcare apps that Apple has been developing, such as an ECG app and irregular heart rhythm notification feature that Apple released in December 2018. There’s a lot more to Apple’s software than an ECG app. Over the years, Apple has developed software such as ResearchKit (a software framework for apps that makes it possible for medical researchers to collect patient data) and CareKit (a framework for developers to build apps that let you manage your own well-being on a daily basis).
- Relationships with healthcare providers such as hospital networks to monitor and share wellness data (more about that here). It’s impossible to overstate the web of relationships Apple needs to build in order to be an active participant in healthcare. Let’s put it this way: you don’t launch a heart monitoring app unless you get your ducks in a row and get physicians onboard. This is literally a life or death undertaking. Moreover, Apple has developed inroads with employers and insurance providers to encourage them to use the Apple Watch to reward customers to manage their health with the Apple Watch.
And this, my friends, is how Apple has surpassed the Swiss watch industry: by playing in a completely different industry. By creating a durable ecosystem. As Tim Cook put it recently, “Apple’s largest contribution to mankind will be in improving people’s health and well-being.” That’s a lofty and compelling standard. But someone else already figured out how to tell time.
Note that I am an Apple Investor. For more insight into the evolution of the Apple Watch over the years:
- “How Apple Is Changing Healthcare through Partnerships,” December 18, 2018.
- “Apple Flexes Its Healthcare Muscle,” September 14, 2018.
- “Apple Wants to Liberate Your Medical Records,” January 28, 2018.
- “Apple Extends Its Reach into Healthcare,” September 13, 2017.
- “Dr. Apple Will See You Now,” February 24, 2017.
- “Apple Watch: Hot or Not?” December 15, 2015.
- “Apple and Disney Launch and Learn with Wearables,” May 17, 2015.