Apple
’s
AAPL
endeavors to solidify its footprint in the healthcare space have been gaining traction in the last couple of years, thanks to the integration of health features in its Apple Watch and Health Records.
Recently, Apple launched Fitness+ subscription services built for Apple Watch. Fitness+ tracks health and workout-related data from Apple Watch that users can view on their iPhones, iPads, or Apple TVs. Markedly, Apple Fitness+ workouts will include cycling, treadmill, rowing, HIIT, strength, yoga, dance, core and mindful cooldown. Each will be accompanied by music curated by trainers.
Additionally, in October, the iPhone-maker announced the availability of the Health Records feature within the Health app for users in the United Kingdom and Canada. The feature helps users view and store their medical records on their iPhone’s secured environment without compromising privacy.
Moreover, the solid adoption of Apple Watch Series 6, which features a blood oxygen sensor with additional healthcare and fitness features like Cycle Tracking, the Noise app and Activity Trends, has helped the iPhone maker strengthen its presence in the personal health monitor space.
This Zacks Rank #3 (Hold) company’s wide array of healthcare offerings in watchOS makes it a key differentiator in the wearables space. The device is expected to become major a growth driver in the long haul. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Wearables Well Poised for 2021
The spread of coronavirus has affected user spending on wearable devices. Nevertheless, the demand for wearables, particularly smartwatches and ear-worn devices, is expected to remain strong in 2021. Per Gartner’s projections,
global user spending on wearable devices
will increase 22% year over year to $62.9 billion in 2021.
Notably, per IDC’s latest report,
global shipments of wearables
grew 35.1% year over year to 125 million in the third quarter of 2020.
Apple continues to dominate the wearables market (by shipment volume) with 33.1% share in third-quarter 2020. Xiaomi, Huawei, Samsung and
Fitbit
FIT
trail with 13.6%, 11%, 9% and 2.6% market share, respectively.
Meanwhile, fitness bands are also gaining rapid adoption due to improving capabilities driven by the infusion of AI, ML and IoT technologies. Apple, Fitbit and Jawbone are key beneficiaries of this trend.
However, the loss of key features like blood oxygen monitoring system and heart rate detection through light emitters due to various lawsuits could hurt Apple’s competitive position in the wearables market against the likes of
Amazon
AMZN
, Fitbit,
Garmin
GRMN
, and Samsung in the long run.
Year-to-Date Performance
Garmin’s Strengthening Portfolio to Pose Challenge
Garmin’s solid portfolio of smartwatches include vivoactive 4 and 4S GPS, which feature advanced sleep tracking, respiration tracking, Body Battery energy monitoring, women cycle tracking, stress tracking with relax reminders and hydration tracking. These watches also provide abnormal heartrate alerts.
In October, Garmin introduced Index S2 smart scale, which synchronizes the health data of users with the Garmin Connect app so that they can access their health and fitness information easily through the app.
Additionally, the company also introduced vivomove 3/3S, vivomove Style and vivomove Luxe, which are well-equipped with health wellness features.
Further, this Zacks Rank #2 (Buy) company’s portfolio includes a GPS smartwatch with AMOLED screen named Venu that provides valuable health insights and is capable of 24/7 health monitoring.
Fitbit’s Solid Portfolio to Aid User Growth
Fitbit continues to expand its portfolio with product launches, which bodes well for the company in the near term.
The company added new features to recently released products — Fitbit Sense and Fitbit Versa 3 — as part of its
software update to OS 5.1
. Post the update, both the devices now offer Google Assistant and Alexa. In addition, both the devices can now take calls on the watch if the phone is nearby, dictate text replies from Android phones and access more health data while asleep.
Moreover, Charge 4, released in April, comes with GPS and allows users to subscribe to music streaming apps like Spotify. This also includes features from Fitbit Charge 3 that enable better healthcare management with its advanced 24/7 PurePulse heart rate technology and SpO2 sensor.
Additionally, this Zacks Rank #3 company’s Versa 2 is equipped with smart sleep features like Sleep Score, Smart wake, Sleep Mode and estimated oxygen variation graph, and other advanced health, fitness and smart features.
Google’s Fitbit Buyout Creates Potent Threat
Alphabet
GOOGL
, which is expected to emerge as the biggest challenger to Apple, agreed to buy Fitbit for $7.35 per share in cash. The integration of Fitbit devices — activity trackers, smartwatches, wireless headphones, smart scales — will expand Alphabet’s technological platform (Android, smartphone, chromecast, smart display, Nest devices).
Its Google division is also gaining traction in this particular space with its Wear OS operating system, which can be synchronized with Google Fit and other health apps.
Moreover, this Zacks Rank #3 company’s focus on infusing advanced AI and ML technologies into its platform is a key catalyst. Further, the addition of technologies (via acquisitions & partnerships) from Pebble, Misfit and Fossil is expected to provide Alphabet a competitive edge over Apple.
Amazon’s AWS Amazon HealthLake: A Game Changer
Amazon’s cloud division, Amazon Web Services (“AWS”), recently unveiled a cloud-based healthcare service called
Amazon HealthLake
. Notably, the new service is a HIPAA-eligible one, which helps medical providers, health insurers, and pharmaceutical companies in analyzing their complete data at a petabyte scale in the cloud.
It enables them to copy health data from on-premises systems to a secure data lake in the cloud. Further, the service allows organizations to store, tag, index and standardize their data.
Moreover, in a bid to fight the coronavirus, this Zacks Rank #3 company deployed clear plastic-sleeve shaped like gadgets that give off warning signals when workers violate social-distancing mandate.
With rising concerns surrounding healthcare and fitness as well as increasing chronic diseases, such diverse initiatives by the abovementioned companies are expected to intensify competition in this space.
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