How Apple Wins by Sensing and Responding

Apple no longer sits at the cool kids’ table. It runs the table. 

The company recently reported quarterly revenue of $91.8 billion, an increase of 9 percent from the year-ago quarter and an all-time record, and quarterly earnings per diluted share of $4.99, up 19 percent, also an all-time record. Apple continues to make fools of analysts who’ve questioned the company’s relevance, especially amid a slump in iPhone sales. Well, guess what: iPhone sales are doing just fine after all. And so is Apple’s stock price year over year:

Now consider this:

  • Siri, once the weak sister among smart voice assistants, has the world’s largest market share, even more than Amazon Alexa, Google Assistant, and Microsoft Cortana. Turns out the never-say-die iPhone and the release of AirPods Pro have helped propel Siri to a wider base of users.

What do all the above statistics tell you? Apple is defining its market as well as it always has, just in different ways that are perhaps not as earth shattering as the launch of the iPhone in 2007. (Let’s face it: the iPhone was like Van Gogh’s “Starry night over the Rhone” – a masterpiece and highwater mark that is seldom if ever matched again). For example:

  • Apple saw the rise of wellness care coming and positioned the Apple Watch not as a cool wearable but as a healthcare device. As CNBC reported, “Apple’s wearable category which includes the Apple Watch and AirPods wireless headphones, has been growing strongly. In the December quarter, that division brought in over $10 billion in net sales, a near 27% year-on-year increase.” In a newly published Hacker Noon article, I dig into the reasons why the Apple Watch has flourished in context of Apple’s strategy to be the data backbone of healthcare. 
  • Apple saw a growth opportunity in services (as opposed to hardware sales). Its Services division reported an all-time high in revenue growth for the most recent quarter, $12.7 billion versus $10.8 billion year over year. For its fiscal year 2019 (ended September 28, 2019), Apple reported $46.3 billion in Services, a 16 percent year-over-year increase. 
  • Apple got out in front of the rise of the voice-first world and introduced Siri in 2011, beating Amazon Alexa to the market by three years. (But Amazon completely outflanked everyone, including Apple, in the smart speaker market with the launch of the Amazon Echo in 2015.)

What’s next for Apple? Becoming a credible player in the streaming wars. Apple TV+, launched in November 2019, has a long, long way to go. Apple TV+ is being met with the same derision that Apple Music once faced. And whereas Apple Music could play catch-up by developing an formidable library of someone else’s music, Apple TV+ needs to develop original content to compete with Amazon, Prime Video, Disney+, and Netflix. 

But don’t ever underestimate Apple. The company has a huge reservoir of cash, and it’s willing to dip into it an example being the recent hiring of Former HBO CEO Richard Plepler to run Apple TV+. 

Do you really want to bet against Apple?

How Apple Is Changing Healthcare through Partnerships

Apple took a major step forward to influence the future of healthcare with the release of an ECG app and irregular heart rhythm notification. With the Apple Watch Series 4, users can take an ECG similar to a single-lead reading. And owners of Apple Watch Series 1 or later (with watch OS 5.1.2) can get notified if an irregular heart rhythm such as atrial fibrillation (AFib) is identified (per the American Heart Association, AFib is present in about one in five strokes.) The new functionality has already been credited with saving one man’s life. The release of the app also comes with a challenge: earning credibility with physicians, who have voiced concerns about people misreading the app’s data. But Apple is up for the challenge — and will succeed. That’s because for years, Apple has built partnerships across the healthcare ecosystem. Those partnerships have provided a proving ground for Apple’s healthcare apps and generated a reservoir of goodwill for one of the world’s most valuable brands.

A Healthcare Strategy

The ECG app, announced at Apple’s September 12 Special Event, support Apple’s strategy to improve healthcare by being the data backbone for patient care. That strategy has three key elements:

  • Software for patients and providers to monitor and share data, which is where apps come into play.
  • Hardware: the Apple Watch and iPhone to create an ever-present device platform.
  • Relationships with healthcare providers such as hospital networks to monitor and share wellness data.

Apple’s penetration of healthcare supports its growth in both wearables and services, two categories that, while small, are contributing more to Apple’s revenue growth based on its fourth-quarter earnings results announced November 1. But with healthcare, CEO Tim Cook has loftier aspirations than generating more revenue. As he told TIME recently, “Apple’s largest contribution to mankind will be in improving people’s health and well-being.”

His focus on wellness care in particular positions Apple well. The PwC’s Health Research Institute (HRI) cites wellness care as one of the top forces shaping the future of healthcare industry, with wellness accounting for $276 billion of the $5 trillion U.S. healthcare ecosystem.

Reaction from Physicians

But to improve health and well-being, Apple needs to have physicians on board. Some have been publicly critical of the ECG app, while others have been supportive. The announcement of heart monitoring features during Apple’s September Special Event almost immediately triggered concerns from physicians who worried that patients would misdiagnose themselves. But the announcement also came with support from the medical community. For example, Christopher Worsham, a critical care physician at Massachusetts General Hospital, and Anupam B. Jena, an internist at Massachusetts General Hospital, wrote in Harvard Business Review, “ . . . doctors shouldn’t be too quick to dismiss the new feature, particularly as it appears amidst growing consumer enthusiasm for wearable devices that measure health behaviors. The Apple Watch has the potential to provide valuable data that benefits the entire health care community.”

Now that the ECG app is live, Apple has experienced both criticism and good PR. On the one hand, an Orange Country cardiologist, Dr. Brian Kolski, has complained about numerous patients contacting him because they thought their Apple Watches were reporting heart problems when in fact nothing was wrong. Dr. Kolski discussed a patient who contacted him in the middle of the night, panicking about a heart reading he’d seen on his Apple Watch.

“He texted me the strip, and it was completely normal,” Dr. Kolski told The Orange County Register. “This was a healthy 45-year-old man who was playing around on his watch and went into a major panic.”

On the other hand, the new features are generating positive news coverage for Apple. TechCrunch and ABC News have already reported the case of Ed Dentel, whose physician told him that the new app likely saved his life by notifying him of an abnormal heart rate. Dr. Sanjay Gupta, CNN’s chief medical correspondent, tested the ECG app and reported it to be “remarkably easy” although he cautioned users to use the app with care.

“The app may also increase visits to the doctor from newly concerned patients,” he wrote. “Still, there has been considerable enthusiasm from the medical community as a whole . . . There is no doubt Apple is counting on doctors to use the data collected by the Apple Watch. The company has made it easy to upload your ECG, along with a description of your symptoms, to your personal doctor directly from the app to facilitate that communication. It’s all part of their big bet on making an impact in health care.”

Strong Relationships in Place

The PR is important, and so is the data that Apple cranks out to substantiate the value and accuracy of the ECG app. But Apple already has something else going for it: a demonstrated ability to forge partnerships with the medical community. The launch of the ECG app is just the latest in a long list of Apple’s accomplishments on the road to become a healthcare player — and those successes have come through partnerships with physicians that I discussed in my recent white paper, Dr. Apple Will See You Now. For example:

  • In 2014 Apple, launched HealthKit to give Apple users a central repository to track health and fitness data on their Apple devices. In February 2015, Ochsner Health System in New Orleans launched its “Hypertension Digital Medicine Program,” which relies on HealthKit to help patients measure and share with the provider their own blood pressure and heart rates. Oschner adjusts (in real-time, if needed) patients’ medications and lifestyle counseling based on the findings.
  • In 2015, Apple released ResearchKit, an open source software framework designed for medical and health research, intended to help doctors and scientists gather data more frequently and more accurately from participants using iPhone apps. The University of Rochester has used ResearchKit to build an app for the largest Parkinson’s study in history. According to Apple, “the app helps researchers better understand Parkinson’s disease by using the gyroscope and other iPhone features to measure dexterity, balance, gait, and memory.”
  • In January 2018, Apple announced that its Health app will make it possible for users to see their medical records right on their iPhones, which would thus empower potentially 90 million Americans who own iPhones. When Apple launched the capability, the company came out of the gate with 39 hospital networks participating. (Apple keeps a running list of participating hospital networks on its website.)

Apple has published more examples of successful physician collaboration. For instance, at Johns Hopkins, physicians provide epilepsy patients with Apple Watches to track their seizures, possible triggers, medications, and side effects. Thanks to a special app developed by Johns Hopkins, the EpiWatch, patients have access to their personal information through a dashboard that also shares data with providers if the patient wants to do so. Patients can also send a message to family members and providers to let them know when the patient is tracking a seizure. Johns Hopkins is collecting this data to eventually understand how to predict seizures before they happen.

Hiring Physicians

Reportedly, Apple’s journey to healthcare prominence also means hiring approximately 50 physicians. CNBC cited the example of hiring hired an orthopedic surgeon, Sharat Kusuma, who leads a team working with medical device maker Zimmer Biomet “to study whether Apple technology can help patients recover from knee and hip replacement surgeries.” In a December 12 article, Christina Farr of CNBC wrote, “The hires could help Apple win over doctors — potentially its harshest critics — as it seeks to develop and integrate health technologies into the Apple Watch, iPad and iPhone.” She added,

Doctors can also help Apple guide the medical community on how to use Apple’s new health technologies  and to deflect criticism. As an example, when Apple announced its electrocardiogram sensor to track heart rhythm irregularities, the company  put up a website to help answer physicians’ questions. That’s important because there’s a very high bar to win approval among doctors who fear liability and are  already overburdened by technology

And here is where Apple’s established relationships with medical networks will pay off. Apple is not trying to build relationships and credibility from scratch. Apple already possesses goodwill by proving itself through efforts that precede the ECG app (such as those cited above). And Apple’s other ace in the hole is usage among physicians: 75 percent of doctors in the United States own some form of Apple device, according to a study by Manhattan Research.

We all know Steve Jobs was the super power who made Apple synonymous with changing the world. But Tim Cook is building a legacy, too, around healthcare. That’s because Apple is improving healthcare through partnerships, not disruption.

Apple Flexes Its Healthcare Muscle

At Apple’s September 12 Special Event, the company continued to show off its growing healthcare superpowers with the release of the Apple Watch Series 4. The latest iteration of the Apple Watch, available September 21, unleashes new features designed to help people manage wellness. Those features include:

  • Creation of an ECG similar to a single-lead electrocardiogram. Using a new ECG app, watch owners can take an ECG reading from their wrists and receive heart rhythm classifications. The Apple Watch can classify if the heart is beating in a normal pattern or whether there are signs of Atrial Fibrillation (AFib). In addition, the data is stored in Apple’s Health app in a PDF that can be shared with physicians. In Apple’s words, “It’s a momentous achievement for a wearable device that can provide critical real-time data for doctors and peace of mind for you.”
  • The ability to detect when a person falls and report a falling incident to a designated emergency contact. Analyzing wrist trajectory and impact acceleration, the Apple Watch sends the user an alert after a fall, which can be dismissed or used to initiate a call to emergency services. If the Apple Watch senses immobility for 60 seconds after the notification, it will automatically call emergency services and send a message along with location to emergency contacts.
  • More fitness features. The Apple Watch already gamifies healthcare by rewarding users with special badges for completing fitness tasks such as walking. Now the Apple Watch allows users to challenge other Apple Watch wearers to complete fitness tasks. In addition, the device provides other features such as prompting owners to start workouts and accurately tracking active calories burned for activities such as hiking and yoga.

With the Apple Watch Series 4, Apple extends its reach into healthcare, following a strategy that the company has been pursuing for years.

The Data Backbone for Patient Care Continue reading

Apple Wants to Liberate Your Medical Records

How easily can you obtain your medical records from your provider? Do you know what your precise cholesterol levels are? I’m willing to bet my new iPhone that your answers to these questions are “Impossible” and “No.”

But if Apple has its way, we’ll finally have always-available access to our own medical records – at least those of us who own iPhones will.

Announcing Health Records

On January 24, Apple announced that its Health app will make it possible for users to see their medical records right on their iPhones, which would thus empower potentially 90 million Americans who own iPhones. The capability became available for patients of 12 medical institutions January 25. Following a beta launch, Apple will expand the program for participating medical providers. Continue reading

Apple Extends Its Reach into Healthcare

Apple continues to shape the future of healthcare.

At its September 12 special event, Apple CEO Tim Cook and COO Jeff Williams announced something less sexy than the $1,000 iPhone X but no less important: new health and fitness features through watchOS 4, the operating system that powers the Apple Watch. They include:

  • Improved heart monitoring. The Apple Watch already performs basic heart-monitoring with Cardiogram (In fact, according to Williams, the Apple Watch is the most-used heart rate monitor in the world.) But with watchOS 4 (available September 19), Apple Watch will also report resting heart rate and recovery heart rate (the latter metric tells you how quickly your heart rate drops after a workout). As Williams said, a lower resting heart rate and a quicker recovery rate can be signs of improved fitness.

  • Alerts on elevated resting heart rates. Williams noted that many Apple customers wrote to Apple about how their Apple Watches helped them detect unusually high heart rates at unexpected times. So the Apple Watch now notifies owners when the device detects an elevated heart rate and the owner does not appear to be active — thus alerting the watch owner about potential heart problems.
  • Better support for your workout. For example through the GymKit technology platform, watch OS 4 will make it possible for people to sync fitness data between their Apple Watches and cardio machines they use at the gym, thus delivering more accurate fitness information such as calories burned or distance traveled during your workout. The sync feature will only work with newer pieces of gym equipment — so that functionality might be limited.

Apple also announced that the company is working with Stanford Medical Center to determine whether the Apple Watch can accurately detect abnormal heart rhythms, or arrhythmias. As noted by Jessica Conditt of Engadget, Apple would like for the Apple Watch to be able to detect common – but often undiagnosed — heart conditions such as atrial fibrillation. According to a study done by Cardiogram and the University of California, San Francisco, the Apple Watch already detects the most common type of heart arrhythmia with a 97 percent accuracy rate. With the Apple Heart Study, Apple will manage its own research with Stanford Medical Center.

“In our Initial studies, Apple Watch has been effective at surfacing irregular rhythms,” Williams said. He noted that the Apple Heart Study “will use data from Apple Watch and Continue reading

How the Apple Watch May Simplify Your Next Doctor’s Visit

Doctors and dentists are not exactly renowned for managing the flow of information in their offices effectively. How many times have you been to a doctor’s or dentist’s office and gotten the sense that providers spend an inordinate amount of time checking in with administrative staff for patient records? A software provider named Simplifeye aims to make work flow in the medical office more efficient by storing information on wearables such as the Apple Watch.

By having patient information stored on the Apple Watch, providers always have instant access to patient records and thus an make themselves more efficient and cut out the downtime associated with waiting for administrative staff to deliver records.

As reported in TechCrunch, Simplifeye has obtained $3 million in funding. In addition, the good news for Simplifeye is good news for Apple. As I reported recently, Apple seeks to be the data backbone for patient care. Having its hardware and software integrated into companies such as Simplifeye helps Apple deliver on its strategy by strengthening the Apple data infrastructure in healthcare.

Simplifeye is set up to be an Apple shop, so to speak (one of its founders worked at Apple) although Simplifeye also offers a mobile app for providers who don’t want to use wearables.

Whether the Apple Watch has penetrated the consumer sector adequately is an open question. Apple officially does not report Apple Watch sales. But the signs are that the Apple Watch is making inroads in both the health provider and payer side (as witnessed by mass purchases of the Apple Watch by Aetna). And Simplifeye applies to dental care, too. As reported in Dentistry Today, “The Simplifeye app works in conjuction with the Apple Watch and allows dentists and staff to view the day’s schedule, know who’s in the waiting room, which operatories are ready for patients, and more. This system will allow you to flow patients through your office more quickly and efficiently, and your patients will be thrilled with the quick turnaround time.”

My recently published ebook, Dr. Apple Will See You Now, offers more insight into Apple’s direction in healthcare. Meanwhile, up-and-comers such as Simplifeye are helping Apple influence the future of healthcare.

Image source: dentistrytoday.com

Dr. Apple Will See You Now

Apple has been defined by consumer product innovations such as transforming mobile phones from calling devices into data centers. But you won’t find Apple’s future in an Apple store. You’ll need to visit a hospital like Johns Hopkins Medicine.

At Johns Hopkins, physicians provide epilepsy patients with Apple Watches to track their seizures, possible triggers, medications, and side effects. Thanks to a special app developed by Johns Hopkins, the EpiWatch, patients have access to their personal information through a dashboard that also shares data with providers if the patient wants to do so. Patients can also send a message to family members and providers to let them know when the patient is tracking a seizure. Johns Hopkins is collecting this data to eventually understand how to predict seizures before they happen.

Johns Hopkins is one of many healthcare providers working with Apple to help patients manage their wellness and clinical care. Apple is not abandoning its role as creator of consumer devices and software — in fact, Apple is doubling down on devices by carving out a bigger role in healthcare. For the past few years, one of the world’s most valuable brands has acting as the data backbone for patient care, one built on Apple hardware and software. Having changed industries ranging from music to telecommunications, Apple is helping to the healthcare industry make an important and necessary shift toward wellness and clinical treatment.

Apple’s Strategy

Over the past few years, Apple has made some significant product developments, personnel hirings, and corporate acquisitions to make Apple a brand for wellness and clinical care. For example, in 2014 Apple launched HealthKit to give Apple users a central repository to track health and fitness data on their Apple devices. The launch of the Apple Watch positioned Apple more firmly as provider of a consumer health-management wearable. The 2016 acquisition of Gliimpse, a medical data storage and sharing start-up, bolstered Apple’s entry into supporting clinical care with smarter electronic health records. So what, exactly, is Apple’s game plan for healthcare? To sum it up:

Apple’s strategy is to be the data backbone for patient care.

And that patient care strategy — for now — focuses on wellness care (providing services such as fitness and nutrition management designed to keep patients healthy) and clinical care (using data more effectively to help patients manage conditions such as diabetes).

The two key elements of that strategy are:

1). Software for patients and providers to monitor and share data

Through its Apple Health app and the ResearchKit and CareKit application development software frameworks, Apple has been creating a software infrastructure for wellness care, diagnostic care, and medical research on Apple devices such as iPhones, iPads, and Apple Watches.

So far the real action for Apple is occurring on the provider side for clinical care. For instance, as reported in Forbes, in February 2015, Ochsner Health System in New Orleans launched its “Hypertension Digital Medicine Program,” which relies on HealthKit to empower patients to measure and share with the provider their own blood pressure and heart rates. Oschner adjusts (in real-time, if needed) patients’ medications and lifestyle counseling based on the findings.

The Apple website also contains many examples of health providers applying ResearchKit and CareKit. For instance, Duke University has developed a ResearchKit app that allows physicians to screen and diagnose autism by using their iPhone cameras to do facial recognition checks. The University of Rochester used ResearchKit to build an app for the largest Parkinson’s study in history. According to Apple, “the app helps researchers better understand Parkinson’s disease by using the gyroscope and other iPhone features to measure dexterity, balance, gait, and memory.”

ResearchKit and CareKit have built off HealthKit’s core functionality to give Apple an entree into clinical care. As reported by Alex Webb of Bloomberg, “The ultimate goal of Apple’s medical technology team is to turn HealthKit into a tool that improves diagnoses . . . The system could chip away at two problems that plague the industry and have stumped other specialist firms in the field: interoperability — allowing data to be transferred from hospital to hospital across different databases; and analysis — making it quick and easy for physicians to extrapolate salient information from mountains of data.”

2). Hardware: the Apple Watch and iPhone to create an ever-present device platform

Apple Watch and iPhone are the delivery devices for Apple’s health management software. The iPhone gives Apple an installed user base of 101 million users in the United States, and the Apple Watch a wearable, which is key for managing everyday fitness goals such as nutrition and exercise (because of the convenience of wearables).

The iPhone accounts for 70 percent of Apple’s revenue. For Apple, penetrating healthcare is important to maintain sales growth. After experiencing three straight quarters of slumping sales, Apple recently reported that iPhone demand came roaring back in the first quarter of 2017. Finding new markets such as healthcare should help Apple maintain its leadership

On the other hand, the Apple Watch is still a small enough part of Apple’s ecosystem that its sales are rolled up into Apple’s “other products” category. But Apple Watch is essential to Apple cracking the fitness market. And at Startup Fest Europe in Amsterdam, Apple CEO Tim Cook brashly predicted an era in which everyday people will wonder how they ever got by without their Apple Watches “[b]ecause the holy grail of the watch is being able to monitor more and more of what’s going on in the body. It’s not technologically possible to do it today to the extent that we can imagine, but it will be.”

But consumer usage is only part of the story for Apple Watch — the other is institutional uptake. Hospitals such as Johns Hopkins University and King’s College Hospital in London are using the Apple Watch to do everything from giving patients reminders to take their medicine to collect information about patients’ epileptic seizures in order to better understand epilepsy.

And Apple is collaborating with the health payer side, too. Recently, Aetna announced that the insurer is providing the Apple Watch at no cost to its 50,000 employees “who will participate in the company’s wellness reimbursement program, to encourage them to live more productive, healthy lives.” Aetna is also developing health apps integrated across multiple Apple devices ranging from the iPhone to Apple Watch to handle a host of health management functions ranging from refilling prescription orders to paying for health treatment.

Look for Apple to continue to develop the Apple Watch as a fitness and telemonitoring device. Last year, Apple filed a patent to make the Apple Watch capable of monitoring your heart beat and warning you of an impending heart attack. And recently Apple filed a patent to embed into smart sensors into Apple Watch wrist links. In doing so Apple identified fitness-monitoring capabilities as a potential application of the functional band links.

Will Apple’s Strategy Succeed?

These applications of Apple technology are taking hold for some overlapping reasons, including the advent of pay-for-performance models (in which physicians are rewarded for achieving successful patient outcomes as opposed to volume of patients treated) and the rise of wellness care.

The adoption of pay-for-performance models and an increase in high-deductible insurance plans are contributing to a bigger focus on wellness care — in other words, investing in programs intended to keep patients healthy. The PwC’s Health Research Institute (HRI) cites wellness care as one of the top five forces shaping the future of healthcare industry over the next decade, with wellness accounting for $276 billion of the $5 trillion U.S. healthcare ecosystem. The Apple Watch and Apple Health position Apple well here.

Moreover, the uptake of pay-for-performance or (outcomes-based compensation models) — in which payers reward healthcare providers for achieving quality-related goals instead of volume of care — plays into Apple’s favor. Here’s why: As noted by Reenita Das of Frost & Sullivan, “To date, the majority outcome-based compensation models are, in reality, performance modifiers built on top of legacy fee-for-service reimbursement schemes. In 2017, we will begin to see more fully formed schemes that focus on patient support across the care continuum. As such, healthcare providers are in dire need of the right technologies and tools to help them effectively deploy and coordinate patients, personnel and infrastructure [emphasis mine].”

In other words, healthcare providers need access to better data to help patients achieve better outcomes, which is exactly why Ochsner Health System in New Orleans jumped all over Apple’s HealthKit to start treating hypertension. A sustained effort to making clinical care more effective requires better management of electronic health records, which is what Apple is aiming to provide, as seen with its acquisition of Gliimpse.

Tim Cook’s Vision

Apple’s actions follow through on Apple CEO Tim Cook’s vision for Apple as a healthcare player. As he told Fast Company’s Rick Tetzeli in 2016,

We’ve gotten into the health arena and we started looking at wellness, that took us to pulling a string to thinking about research, pulling that string a little further took us to some patient-care stuff, and that pulled a string that’s taking us into some other stuff,” he says. “When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement [from an insurance provider]. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.

And Cook has good reason to be optimistic. Apple’s ace in the hole consists of its toehold among the various players in the healthcare ecosystems, especially physicians, who prefer using Apple products. And the Cleveland Clinic recently rated the Apple Watch as having the most accurate heart-rate sensor. In 2017, I expect Apple to deepen those relationships through joint research and development (as it has done with Mayo Clinic).

And to paraphrase Steve Jobs, here’s one more thing: expect Apple to articulate a vision for integrating artificial intelligence and healthcare. The company recently joined the Partnership on Artificial Intelligence, a consortium dedicated to using AI for social good. AI, data, and healthcare are converging. I expect Apple to be at the center of that convergence.

This blog post is adapted from my ebook, Dr. Apple Will See You Now.

Apple Watch: Hot or Not?

Screen Shot 2015-12-16 at 6.48.14 PM

Adweek‘s hottest digital gadget of 2015 is also one of the most controversial. The Apple Watch has been called both a flop and a behavior-changing device. I believe that the Apple Watch is a flawed first-generation product that will ultimately take hold for these reasons:

  • The Apple Watch makes use of a natural gesture, the swiping of the wrist, to accomplish everyday tasks.
  • Businesses ranging from Target to Starwood have built a large Apple Watch ecosystem via the development of apps that support tasks ranging from shopping to checking into hotel rooms.

My new CMO.com byline discusses why any business that depends on mobile consumers needs to find a place for the Apple Watch in its customer acquisition and retention strategy. Waiting around for the Apple Watch to become mainstream will cause you to lose ground to the businesses that are already getting exploring the branding potential of the Apple Watch. Check out my new column and let me know your opinion of the future of the Apple Watch.

Apple and Disney Launch and Learn with Wearables

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Apple has some work to do with the Apple Watch. Early adopters are criticizing the new wearable for a host of problems, including limited battery life. In other words, development is progressing on schedule. Apple is breaking into a nascent market with an imperfect product just as another huge brand, Disney, did two years ago with the launch of the MagicBand wearable that manages most facets of a guest stay at Walt Disney World. Disney faced criticisms for a new device, addressed them, and is seeing strong uptake two years later. Apple will, too. The biggest challenge Apple faces is investor expectation that every new Apple product will take hold immediately like the iPhone or iPad. The Apple Watch is different: it represents an entry into an evolving market, more akin to the first Model T automobiles. (By contrast, the iPhone cracked an already established telephony industry.) As I discuss in a recently published white paper, both Apple and Disney are acting on a vision to change the way we live. Following is an excerpt discussing why I believe they will succeed.

Ease of Use

Apple and Disney designed the Apple Watch and MagicBand to look good, and they need to look good. The devices are designed to be visible extensions of you, worn prominently on your wrist instead of being tucked away in your pocket. Disney wants Disney World patrons to use their MagicBands to manage their entire stays, including checking into their lodging, buying souvenirs, reserving their ride times via the FastPass+ system, and getting their meals served — akin to using a wristband to live in a city. Apple has even grander ambitions: your Apple Watch is the key to not only buying goods and services, but also handling myriad other aspects of your life, such as managing your fitness.

Apple and Disney need you to feel comfortable about wearing your devices, and for good reason: wearables have been marred by ugly design, and who wants to wear a device that embarrasses the owner? Appearance is so crucial that Apple has departed from its usual custom of providing simple product options and instead provides 38 different Apple Watch designs, ranging in price from $349 to $17,000. Similarly, the Disney MagicBands are available in many different colors (at prices ranging from $12.99 to $29.99), and Disney makes it possible for MagicBand owners to “show off your Disney side” by customizing its look with accessories such as an R2-D2 Magic Slider.

But what makes Apple Watch and MagicBand game changers are their ease of use. Both devices eliminate an action: digging through your belongings to conduct an action. Have you ever found yourself fumbling around for your iPhone to search for a restaurant on Yelp? Dropped your Disney room key while trying to lasso your kids as you dig through your backpack? Apple and Disney just eliminated those aggravating moments and replaced them with more fluid, graceful user interfaces such as swiping, glancing, and speaking.

Pervasiveness

For the products to take hold, they need to be more than user friendly; they need to be pervasive. As Austin Carr of Fast Company notes, Disney designed the MagicBands to support your visit to a metropolis spanning 25,000 acres, comprising four theme parks, 140 attractions, 300 dining locations, Continue reading

How SIM Partners and Vibes Are Changing Local Marketing

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Let’s pretend for a moment that you are in Manhattan on a business trip. Just before an important meeting, you spill coffee all over your shirt. You’re too far away from your hotel to grab another one. You pull out your mobile phone and Google “shirts near me.” Lo and behold, a clothing store a few blocks away not only shows up in your search results, but the store displays an offer for 10 percent off your next purchase, with the transaction made easy via your mobile wallet. Do you think you just might be tempted to accept the offer? SIM Partners (a client) and Vibes certainly believe you will. Today the two companies announced a relationship that will combine local search and mobile technology to make it possible for businesses to make offers to consumers based on their proximity to a business. I believe the SIM Partners relationship with Vibes is changing local search by closing the gap between marketing and sales.

SIM Partners provides a software automation platform that big enterprises use to make their digital marketing more effective at the local level. Vibes is a provider of mobile marketing expertise. Both companies have something in common: they want to help businesses figure out how to capitalize on the popularity of local search. According to Google, “near me” searches have increased by 34 times since 2011 and doubled since 2014. And it’s no coincidence that smart phone usage in the United States has soared. The majority of “near me” searches occur on mobile devices. Consumers are using our mobile devices to find what we want, and when we want it, at the local level. The challenge that both SIM Partners and Vibes are tackling: how to turn local searches into revenue.

SIM Partners and Vibes are addressing a compelling issue. Local searches indicate intent to purchase. According to comScore, 80 percent of local searches on mobile phones convert to purchase — a powerful piece of data that makes perfect sense when you think about it. If you Google “pizza” on your mobile phone when you are downtown Chicago, chances are that you are looking for a place to eat pizza rather than researching the history of pizza. Big companies that operate hundreds and thousands of outlets are working with local marketing experts like SIM Partners to make sure that their names appear prominently in your search results and to ensure that it’s easy for you to find and do business with them. As SIM Partners CMO Tari Haro recently noted in a blog post, such brands have an opportunity to go beyond “being found” in search results and instead entice consumers to conduct business with them. She challenges companies to own “the next moment” of search, or the action that occurs after a consumer finds your business.

SIM Partners and Vibes took a big step in making it possible for brands to own the next moment of search. As discussed in the press release, the two companies are integrating mobile wallet campaigns with the SIM Partners Velocity platform to help national brands create online and in-store offers that convert shoppers into buyers based on a customer’s search intent and proximity.

The following graphic demonstrates how the technology works from a consumer’s point of view. In the example, a consumer uses her mobile phone or Apple Watch to conduct a “shoes near me” search in New Orleans. A shoe retailer working with SIM Partners and Vibes not only show its location in the search results, but also:

  • Displays an offer (“Get instant savings on your next purchase at Shuuz New Orleans”).
  • Allows you to download a 20-percent-off offer in your mobile wallet after you tap a “save now” button on your screen.
  • Notifies you when you are within 100 meters of the store (“Welcome to Shuuz”).

Near_Me_Search_FINAL

Once you are in the store, the merchant may also serve up more offers to cross-sell merchandise such as shoe cream. There is a lot more detail behind the scenes than I’ll explain here, but the press release contains more.

I believe the SIM Partners/Vibes relationship is a game changer for these reasons:

  • The two companies are helping brands tap into natural human behaviors such as search, mobile phone usage, and shopping. Enterprises provide the offer when it matters most to consumers, creating a more relevant experience.
  • The relationship is forward thinking, as it relies on iBeacon technology and accommodates the Apple Watch — which plays to the strategies adopted by major brands such as Macy’s (an early adopter of iBeacons) and Target (already embracing the Apple Watch to enrich the shopping experience).
  • SIM Partners and Vibes are closing the gap between marketing and sales. We’re not talking about creating targeted ads to serve up more relevant content based on your browsing history — rather, SIM Partners and Vibes are empowering companies to create a specific offer at the right place and time to drive foot traffic into a store when your purchase intent is strong.

The announcement also promises a win/win for brands and consumers. Consumers win because they not only find what they want, but they get rewarded. (Tari Haro noted in a blog post today that mobile wallet offers have a 64-percent higher conversion rate over static mobile Web coupons and a 26-percent increase in average order value over static mobile web offers.) And brands create more foot traffic and revenue at the location level. If you are a national enterprise with hundreds or thousands of locations, you win at scale, too.