The big news this week was that Apple has acquired PHR vendor Gliimpse. This was supposedly the first acquisition by Apple’s new Digital Health team. Plus, it’s the first big news since Tim Cook commented that Apple’s opportunity in healthcare “may even make the smartphone market look small.”
Many are touting this as a the start of the move by Apple into healthcare. No doubt it’s interesting that Apple would make a vertical acquisition like this, but it’s a mistake. Unfortunately, it’s a mistake that Apple is likely to do over and over again.
Apple certainly was and in many respects still is in a unique position to be able to innovate in healthcare thanks to its massive iPhone user population. They really could do some interesting things in healthcare since so many people have iPhones and so many healthcare companies want to say they’re working with Apple. The problem is that Apple doesn’t understand healthcare.
If you think this is a small thing, you’ve probably never tried to do a healthcare startup company. Healthcare is a unique market and requires a unique understanding to be successful. All the bravado in the world will only get you so far in the world of healthcare. Then, the harsh realities set in and you realize that the current against you is a lot stronger than you first realized.
Let’s take the example of the PHR Gliimpse (and generalizing to any PHR). This is a hard market with very little consumer demand. That’s been proven over and over again by hundreds of companies who have tried. The harsh reality is that most patients don’t care enough about their health to want to aggregate their health record. It’s worth noting that aggregating your health record is hard work. I even know one company that is paying doctors to send them health records and even then it’s hard to get doctors to act. Plus, there’s little value to healthy patients if they actually did aggregate their record. This is a tough, tough business.
Certainly, a case can be made for chronic patients that it’s worth the effort to aggregate this data into a PHR. Many have been doing this out of necessity. It was happening before cell phones became ubiquitous as people carried around massive folders or binders with their health records. While this value is understood, this makes for an extremely small market. When did Apple last do good in a small market? Is Apple going to really give up iPhone real estate when only a small portion of their users can actually get value from the PHR?
It’s great to have Apple interested in healthcare. However, I think the acquisition of a PHR company is a mistake and won’t yield them the rewards in healthcare that they seek. Of course, when you have a few billion to spend, what’s a few million on a PHR company? No doubt it’s a really small bet by Apple, but one that I don’t think will pay off for them. At least now they’ll have some people with health experience on the team and maybe they can innovate something new.