Apple times release of smart watch just right

Product to prosper from rise of health enthusiasts

Apple launched the iPod in 2001. It was not the first digital music player on the market, yet no one at the time could imagine the radical change that the product would have on the music industry, and even the global entertainment industry.

Apple is now venturing into a new product category - wearable health tech - once again following several predecessors who have struggled to succeed.

The US tech giant unveiled its highly anticipated Apple Watch Tuesday in the US. The wearable gadget can record and track a user's health data, such as heart rate.

For some observers, the lackluster foray of Apple's predecessors into the world of wearable health tech spells trouble for the prospects of the Apple Watch. As they have noted, several similar products have been launched without much success.

However, the health conscious population of young adults, the satisfactory performance of sports brands and the potential benefits for medical institutions indicate there is promising future for Apple's ambition.

In May 2008, Google launched Google Health, a personal information platform that allowed users to upload their health data to create a comprehensive digital health profile. The platform did not succeed. In January 2012, it was announced that all data uploaded to the platform would be destroyed.

One thing Apple could learn from Google's failure is to target a specific group of consumers. According to a Google blog post on the subject, Google Health was adopted early by certain groups such as tech-savvy patients and their caregivers. Later, fitness and wellness enthusiasts joined. But Google couldn't find a way to translate that usage into widespread adoption.

By designing the Apple Watch to cater to young tech and sport lovers shows clear market positioning. According to a survey conducted in January by Endeavour Partners, a strategy consulting firm, there is a younger cohort of adopters of wearables, most of whom fall into the 25 to 34-year-old demographic, which account for about 25 percent of Americans who own a digital heath and fitness performance tracker. These users are focused on finding better ways to keep fit.

The trend of young adults consciously monitoring their fitness and health data bodes well for the success of wearables that focus on sports and health. A study by Nielsen Health and Wellness shows that 45.8 million US smartphone owners used a health or fitness app in February, an 18 percent increase from the same month a year ago. About 2.5 million people owned a wearable device such as a fitness tracker or smart watch in February, almost five times more than in September 2013.

The timing may be right for the release of the Apple Watch, considering the steady growth in revenue that major sports brands have enjoyed over the last few years. According to a survey by IHS Electronics and Media in September 2013, when taking into account top 20 names such as Nike, adidas and GNC, the sports and fitness industry saw revenues grow 10.3 percent over the last three years, which indicates that more partnerships like the Nike+iPod, in which there is one sensor installed in a Nike shoe and another in an Apple product to monitor fitness data, may be on the way.

Hospitals and clinics in partnership also stand to benefit from the success of wearables, which will create a better environment for the product category. According to the US Patient Protection and Affordable Care Act, hospitals that require patients to have more case reviews will be fined. Tracking patient health through data transmitted by mobile health devices will reduce costs for hospitals. In addition, the US government has been a big supporter of electronic medical records (EMRs). The US Department of Health and Human Resources will spend more than $30 billion on improving EMRs, according to a report conducted in 2013 by A.T. Kearney, a consulting firm.

When it comes to mobile devices and big data, however, the safety of personal information is a daunting issue, particularly with the leak of nude celebrity photos from Apple's iCloud fresh in the public's memory.

To guarantee the solid growth of its health-focused wearables, Apple will not only need to design product features in line with its target customers - young fitness lovers - but will also need to protect their personal data.