3 Reasons Apple Watch and others need health insurers to drive mass adoption and meet the Wearables Promise!



The Apple Watch Sports Model and Band

With the Apple WWDC this week and my Apple Watch slated to be delivered in seven days, the Smart Watch is at the forefront. While I can’t wait, I ultimately feel that the ubiquitous use of smart wearables and all their promise is on hold. From putting learning on your wrist and assaulting climate change to empowering those in pursuit of freedom and those escaping poverty, its true potential can happen soon if we have a catalyst to go beyond the relatively wealthy consumers.

Beyond Apple?

The next 12 months may be the time when all this happens. And it may be the breakout that gets Apple Watch and other Smart Watches into the hands of the poor and disenfranchised globally who could most use it.

IDC reported vendors shipped a total of 11.4 million wearables in 1Q15, a 200 percent increase from the 3.8 million wearables shipped in 1Q14.

“Bucking the post-holiday decline normally associated with the first quarter is a strong sign for the wearables market,” said Ramon Llamas, research manager, Wearables. “It demonstrates growing end-user interest and the vendors’ ability to deliver a diversity of devices and experiences. In addition, demand from emerging markets is on the rise and vendors are eager to meet these new opportunities.

“What remains to be seen is how Apple’s arrival will change the landscape,” added Llamas. “The Apple Watch will likely become the device that other wearables will be measured against, fairly or not. This will force the competition to up their game in order to stay on the leading edge of the market.”

I’m an early adopter but far more skeptical than Mr. Llamas.

Despite this Q1 uptick, the 200% increase measures growth over the same quarter last year when sales were small.

There are almost as many cell-phone subscriptions (6.8 billion) as there are people on this earth (seven billion) — and it took a little more than 20 years for that to happen. In 2013, there were some 96 cell-phone service subscriptions for every 100 people in the world. If we sell 50 million wearables this year, we are just scratching the surface. It doesn’t take a lot! Just some risk-taking corporations ready to jump across the chasm to true innovation and a new mass market!


1. As it exists now, smart wearables are not priced for sustained growth.

Sure the Fitbit, Fuelband, UP and Microsoft Band wristbands are early winners in the Internet of Things-meets-fitness world. But are they enough to sustain a market that is estimated to be more than a $70 billion market by 2024, according to IDTechEx? Is $70 billion real or should it be higher?

Are there enough people who will pony up $100+ to track their workouts or more important health conditions or be served up a hundred apps on a tiny screen?

Clearly the Apple Watch and other Smart Watches are meant as onramps to applications that will justify the cost of the device. Of course, I bought one because I cover the Wearables and Internet of Things space…and I think there’s huge potential in dollars but, more importantly, for social impact.

Smart clothing such as the Tech Shirt, which Ralph Lauren Polo outfitted ballboys in at the U.S. Open this past August showed an impressive move into the smart garments market. A smart shirt woven with sensors that you can wear but which tracks your vitals such as stress levels, calories burned, heartbeat and energy output is a great beginning. However, it comes with a high price tag.

OMSignal, which provided Polo with the technology, is coming out with its own version of the shirt, which is available at a total cost of $199. That’s great for those of us obsessed with their fitness. We might even pony up for that expense, but it’s unlikely the individual consumer will.

The Athos fitness combo wear is loaded with smart technology and can be used for any workout.

Athos strikes a pose for fitness monitoring!

However, it’s an altogether different story if these devices were to be covered by health insurance companies, as part of a wellness or disease treatment program. Perhaps then the price will be greatly reduced and the average consumer would buy them. Already some large enterprises are providing fitness trackers as incentives for employees to get in shape.

Think about what it would be like if your health insurance provider covered the cost of those Athos smart clothes for your workouts?

2. Healthcare wearables are going to be more sophisticated, more complex and will only be affordable if covered by health insurance companies.

Already digital health is being heavily researched and funded by investors in the VC community such as Kleiner Perkins, Bessemer Venture Partners, Qualcomm Ventures and many others. Some of these investments come to market as more life-changing technology, including smart wearables.

Intel Capital, the global investment arm of Intel Corp., invested $62 million in 16 tech companies, part of a $355 million investment in startups that the chip giant expects to make this year. One of their recent investments was in Eyefluence Inc., which has eye-tracking technology that aims to let people use their eyes to operate wearable devices the way they would use their fingers on a smartphone.

Eyefluence promises that its eye-interaction technology will jump start the adoption of all wearable displays, including Glass, Augmented Realtiy (AR), and Virtual Reality (VR) devices for enterprise, industrial, and consumer applications.

Intel and the Michael J. Fox Foundation announced that they are working to improve research and treatment for Parkinson’s disease — the neurodegenerative brain disease second only to Alzheimer’s in worldwide prevalence. Data collection for this massive effort will rely on participant data collected from wearable technologies used to monitor symptoms.

As part of the University of California San Francisco’s Health eHeart study, iHealth’s mobile blood pressure wearable measures an important heart health indicator traditionally gauged by ultrasound tests.

Physicians are clamoring for companies to focus less on peripheral fitness gadgets and more on healthcare applications. Key advances in digital health that monitor diabetes, heart disease and hypertension will be more valuable and, clearly, more costly than simple fitness trackers.

In whatever form these more advanced and expensive wearables take, it will require health insurance provider coverage to cover much of these costs and grow the market.

3. Wearable devices will help insurance companies save more money.

It’s clear that insurance companies win when they save costs.

Gartner Analyst Michelle Reitz encapsulated it for me,

“Healthcare wearables can help patients become interested and involved in their own care. The promise of wearables is that with proper use, this will translate into reduced numbers of doctor appointments, less emergency room visits and eventually lower prescription payouts because fewer people will need long-term medication. All of these result in reduced costs for health insurance providers.”

If insurers can get consumers — particularly those whose health is compromised — engaged in their own healthcare, then the device market will grow, individuals’ health will improve, employers will have a healthier workforce and insurers will benefit.


Consumers today have more incentive to monitor their health because they are shouldering more of the burden of healthcare costs. Companies such as oil giant BP, which provides its own insurance took that a step further. Last year around 14,000 employees were offered and accepted free Fitbit Zips in exchange for letting the company track their steps. If an employee crossed a million steps in one year, points would be accrued toward lowering their individual insurance premium.

Appirio, a global cloud consultancy, created a similar fitness tracker incentive program for its employees. Many volunteered to have their data shared with the company’s insurance carrier to show how healthy they were. As a result, Appirio negotiated a $300,000 savings off its roughly $5 million health insurance bill.

If companies can incorporate even more technologies into a small chip-embedded patch, a wristband or a smart garment such as the Tech Shirt, it will be up to insurance companies to make the possible affordable.

UP by Jawbone

The Apple Watch, at its far higher price tag, can only hope to get the same employer-insurer support that will help it blow out the true potential of such an advanced wearable. Microsoft, Google and others are already chasing the lead of Apple.

Natural market forces and enlightened business executives will flip this market with price breaks to give themselves a competitive edge in the marketplace. Companies such as BP and Appirio will be more attractive places for people to work and will retain more talent.

If I’m an insurance company, I’m happy to give my clients a break on premiums for using these devices (Apple Watch offers much more than heart rate, pulse, etc.) because it reduces my ultimate costs and garners me more business by being an agile innovator.

Competition will even bring down prices for what I call the “Traditional Wearables” (Fitbit et. al.)as well as the Smart Watches (AppleWatch, Pebble (?)and lookalikes).

Cameras and communications capabilities beyond texting will come to the Smart Watch. The Internet of Things will bring mass sensor connectivity to the watches. This is not your Grandfather’s Timepiece.

Applications to add some of the greater altruistic value I mentioned above will arrive; e.g. Smart Watches linking farmers and their markets, doctors and their patients. On this last point, imagine what the watch could do if it was completely connected on the wrist of a surgeon linked to a doctor in New York operating on a patient in a rural hospital in Africa.

Grants from the Bill and Melinda Gates Foundation and others for early digital health adopters but insurer progress in the U.S. will be what is needed to get Smart Wearables to the inflection point where enough interest, apps, funding and progressive global expansion will make it all happen. They will allow enough traditional wearables, Digital Health devices and Smart Watches to not just be novelty items. Insurers can help grow the critical mass necessary to meet the global dimension of these devices that I envision.

Given that insurers are already engaged in this with corporate employees, Smart Watch competition will drive down prices, fuel app development and lead a substantive move toward the Wearables Promise.



Wolf Nordlinger, AI Storyteller (Chris)

Ph.D. Fulbright Scholar:AI Storyteller, Publ'ed WashPost, Fortune,etc. State Dep't(Burkina Faso),Eurospace (reside in Paris),Cisco.Splunk.Palo Alto Networks.