Apple, Samsung Pave Way For Generation of Branded Health Apps

With Its New Software, the iPhone Is Poised To Become the Hub of Digital Dollars

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Right now, health is in vogue. Millions of consumers are scooping up mobile-apps and newfangled devices that monitor and quantify their physical activity and diets.

Brands have been desperate to jump aboard, and now, thanks largely to Apple, the floodgates are opened to them.

With new updates to its iPhone software, the Cupertino company is paving the way for advertising dollars on digital health and a wave of branded health apps and services.

On Wednesday, the company teased this potential with its new ad, called "Strength," that features a host of fitness products already accessbile to the iPhone. Apple, it seems, is ready for more.

"We'll see more jump into this field and start to leverage the ability to collect data," said Geoff McCleary, VP-mobile innovation at Digitas Health. "There are a ton of marketers out there that felt limited. That need for hardware has been removed."

The reason? A pair of software tweaks Apple announced on Monday for its new mobile operating system, iOS 8, due to arrive in the fall.

iPhone users who update will see a new app, called "Health," which can display an owner's physical activity, weight, diet and blood pressure. Behind it is HealthKit, a new Apple software platform designed to pool the wealth of mobile-apps collecting personal health data into one spot.

"Until now, the information gathered by those applications lives in silos. You can't get a single comprehensive picture of your health situation," Craig Federighi, Apple's senior VP-engineering, said at the company's splashy developers conference. "But now you can."

HealthKit's potential is unlocked by the second Apple tweak: "Extensibility," a software update that allows apps to communicate with one another. If you're in Apple's Photo app on your iPhone, for instance, you can pull data from others without leaving the app. In short, Apple created a central hub for the flow of personal data -- one that can shoot out its spokes into millions of consumer's pockets.

So a company like Weight Watchers, which works with Kitcatt Nohr, a DigitasLBi agency, and manages its own health-tracking app, could nab data from other apps -- if an iPhone user allows it -- rather than rely on its own inputs or tie-ups with companies that make personal fitness devices.

A race with Samsung
HealthKit arrived a week after Samsung, Apple's handset nemesis, introduced a similar digital health platform. While both companies have tremendous scale, Apple has the edge of uniformity; Samsung relies heavily on Google's Android system, which is fragmented and diverse.

"Apple has the ability to push something out and get in the hands of far more people," said David Berkowitz, CMO of the Publicis Groupe's MRY.

By creating a central hub for personal data, Apple may unleash marketers eager to tap into a big market. The investment bank Piper Jaffray has estimated that wearable tech will grow hit $18 billion by 2016, up from $1 billion two years ago.

In 2013, sales of digital fitness products reached $330 million, according to the NPD Group.

Fashion has been the first industry to latch on as wearable technology attempts to become mainstream. In January, the luxury designer Tory Burch teamed with Fitbit to lend a haute couture touch to the personal fitness wristband. Mr. Berkowitz said he expects more similar affiliations to come.

Healthcare and fitness companies could be next in line. With HealthKit, Apple is working with Nike and the Mayo Clinic. At the Monday conference, Apple executives suggested the Health app could be synced directly to hospital apps, jettisoning a blood reading to a doctor.

Then there's pharmaceuticals. These companies haven't aggressively deployed mobile-apps yet, said Mr. McCleary. But the new iPhone features could change that, creating a world where users can share health data and then get steered toward certain drugs far more quickly.

Although Apple did stress privacy controls with its software updates on Monday, the company didn't offer details on HealthKit's potential integration with medical devices or the regulatory steps that might require. Apple did not offer further comment on HealthKit.

A push for branded apps
It's easy to imagine how a brand like Gatorade could tap HealthKit. Roping in mobile beacons, the bluetooth-based tracking devices increasingly used in retail stores, the drink company could reward its shoppers for physical feats. Finish a three-mile run, and Gatorade sends a congratulations when you pass a Walgreens -- maybe, with a discount attached.

"It's got a relatively low barrier to entry," Mr. Berkowitz added. "And there's huge potential reward."

Yet a big hurdle for all apps remains getting discovered, which requires lots of advertising. It's "not a black hole," said Thomas Husson, principal analyst with Forrester Research, "but Apple is doing little to provide marketing tools for brands."

For now, the immediate result of Apple's venture into health may be a further lowering of the barrier consumers have to hand over information digitally. And that won't stop at health, said Tim Dunn, director of strategy at Isobar U.S., a digital agency.

"We will get more confident in sharing this level of personal data," he said. "And that confidence will likely extend to our favorite services in finance, insurance, leisure and entertainment."

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