Last week, Amazon introduced Halo, a wrist-worn health and fitness tracker. Along with a corresponding app and subscription service, the Halo wristband is Amazon’s most ambitious consumer health initiative to date.
Sure, Halo is Amazon’s attempt to keep pace with Apple and Fitbit in the battle for our wrist (and health data). But what does this new wearable mean for health trackers like WHOOP and the company’s push into healthcare more broadly? Let’s take a look.
Like most health wearables, Halo monitors physical activity, heart rate, and sleep. In an attempt to boost engagement, the device uses a points system. Each week begins in pursuit of 150 points. More activity, and more intense efforts, equate to more points. Unlike other wearables, though, Halo subtracts points for long stretches of inactivity.
But stripping users of their activity points is hardly the most controversial feature. Instead, the criticism was privacy-related. A red flag, Halo asks users to strip out of their clothes. And it wants to listen in on every conversation.
For its part, Body collects front-, back-, and side-facing photos to create a 3D image, complete with weight and body fat percentage. The company suggests wearing “tight, minimal clothing.”
Amazon did say voice recordings are deleted once they’re analyzed, and they won’t be used for advertising purposes. Similarly, the company said full-body photos are removed from the cloud after processing. Still, it’s cause for concern.
Odds and ends: The device is priced at $99.99, plus a $3.99/month subscription. Of note, unlike an Apple Watch, there’s no screen. In fact, Halo’s design resembles that of WHOOP. More on that in a minute…
Why a Wearable?
With Halo, Amazon will capture a piece of the wearables market and earn subscription revenue while making inroads into healthcare.
- Amazon has amassed 150M paying Prime members.
- The wearables market is expected to surpass $50B in 2020.
- Like Apple and Google, Amazon is eyeing the $3.5T US healthcare sector.
Apple’s smartwatch is one piece of the bigger healthcare puzzle. CEO Tim Cook thinks health will be the company’s greatest contribution to mankind. The Apple Watch and a suite of health-focused apps are key to realizing that vision. If brought to fruition, Apple will aggregate your health data, routing it to your personal health record, doctor, and insurance provider.
Google has a wide range of healthcare interests. Inside Alphabet, Calico is focused on anti-aging, Verily conducts life sciences research, and health data is stored in Google Cloud. And Google Ventures has invested in nearly 60 health-related companies. Add the yet-to-be-finalized acquisition of Fitbit for $2B and it’s clear: Google is honing in on health.
Amazon’s 2018 acquisition of PillPack for $750M vaulted them into the healthcare conversation. Along with making a number of key healthcare hires, the company launched Amazon Care clinics for employees. There’s also Haven, a joint venture with Berkshire Hathaway and JPMorgan aimed at lowering healthcare costs.
With Halo, Amazon signals a heightened interest in health. Looking ahead, the device could be foreshadowing of Amazon Prime Health.
With AWS housing data, Alexa serving as a personal health assistant, and PillPack prescriptions on demand, Prime Health adds a new subscription layer. Then, Amazon can partner with insurers to provide special rates or discounts.
That’s to say nothing of its employee-focused efforts, where Halo will almost certainly be the wearable provider to Haven and Amazon Care.
What about WHOOP?
Reading the press coverage of Halo’s launch, Apple, Fitbit, and Alphabet’s Google were focal points. Likewise, healthcare and privacy concerns were top of mind.
Interestingly, nearly every article left out any mention of WHOOP, which is especially curious given Halo’s resemblance.
Need-to-know: WHOOP is a wrist-worn fitness tracker and membership. In addition to activity, sleep, and heart rate, WHOOP tracks heart rate variability. With a focus on performance, WHOOP has popularized recovery and strain scoring. While the WHOOP strap is free, the monthly membership is $30.
[Editor’s note: For more, listen to WHOOP CEO Will Ahmed on the Fitt Insider podcast.]
Put simply, WHOOP wasn’t a major talking point because the company is still relatively small. Despite having raised nearly $105M to date, its core audience is athletes, CrossFitters, and other high-performers.
Loyal as it may be, WHOOP’s current membership base doesn’t make it a major player in the wearables category. By market share, Huawei (24%), Xiaomi (20.4%), and Apple (17.1%) lead the watches and wristbands sector. Fitbit (7.3%) and Garmin (4.5%) round out the top five.
While journalists who covered Halo might be unfamiliar with WHOOP, it seems like Amazon knew exactly what Ahmed and company were working on.
Writing on Twitter, Ahmed said as much: “Yes, Amazon imitated our industrial design @whoop and yes they met with us as potential investors years ago under the Alexa Fund.”
In a series of tweets, Ahmed went on to say that “health monitoring is here to stay.” And he welcomes the competition from Amazon and other tech companies. Ahmed also offered a word of caution to consumers: “Many companies will make YOU the product” while reassuring members that WHOOP won’t betray their trust.
In the end, WHOOP and Amazon are targeting entirely different populations. Halo won’t hurt WHOOP’s current position in the market. But if Halo gains hold as part of an Amazon bundle, it could keep WHOOP from reaching a wider audience.
Like Apple and Google, Amazon wants a piece of the healthcare pie. From Apple Watch to Fitbit and now Halo, wearables will play an important role in big tech’s vision for reinventing a trillion-dollar industry. As a result, the WHOOPs of the world will have to compete in an increasingly competitive market. But, that opens the door for WHOOP, Oura, Garmin, and others to become more specialized, distinguishing themselves from a one-size-fits-all wearable.
👤 Fitbit For Your Brain
Forget wearables — Elon Musk is working on an implantable.
ICYMI: Last week, Musk showed off his brain-machine interface startup Neuralink. About the size of a quarter, the device was implanted in a pig’s brain, where it was able to read and transmit neural activity.
What it is: According to Musk, Neuralink is like “a Fitbit in your skull.” Tiny wires connected to the center of the brain allow the device to communicate with a computer via Bluetooth.
Although Neuralink hasn’t been tested on humans, neural implants aren’t new — they’re already used in the treatment of neurological disorders like epilepsy and Parkinson’s. So it’s totally possible that Neuralink could improve the lives of people with neurological diseases and injuries.
But Musk thinks brain-computer interfaces will eventually merge human brains with artificial intelligence, mitigating the existential threat of AI in the process — something that has piqued the interest of the military.
Looking ahead: It’s still early days at Neuralink. Besides undergoing clinical trials, scientists have to create a device that lasts a decade or longer without deteriorating. Beyond that, there’s a host of ethical questions related to brain chips. For now, Musk is being criticized for “neuroscience theater”, but it’s becoming increasingly difficult to bet against him.
💵 Cashing In
The COVID-caused at-home workout boom continues.
In recent weeks, DICK’S Sporting Goods (DSG) and Nautilus, Inc. posted record Q2 results.
DSG: The retailer’s online sales, including curbside pickup, grew 194%. Net income for the quarter ending August 1 grew roughly 148% to $276.8M. And net sales increased 20.1% to $2.71B.
Nautilus: The company closed one of the “strongest quarters ever.” Net sales were up 93.5% to $114.2M. Direct-to-consumer sales rose 142%. And gross margins increased 1,200 basis points.
Zooming out: From speakeasy gyms to black market dumbbells, as well as this uptick in sales at fitness and sporting goods retailers, the shift to home workouts should be worrisome for gyms and studios. Add the surge of activity on fitness apps and the momentum behind connected fitness, and the landscape may have shifted for good.
Takeaway: DSG and Nautilus will be well served by bolstering their digital, direct-to-consumer business. This is especially true of Nautilus, who was at risk of missing out on the connected fitness boom. Now, thanks in part to a $70M credit facility secured earlier this year, the company is revamping its digital capabilities as demand grows. Next up, its very own Peloton lookalike.
📰 News & Notes
- SoulCycle is selling off its in-studio bikes.
- Peloton puts its bikes in UK department stores.
- Whole30 debuts its condiments line on Thrive Market.
- An app for psychedelic trips. [Reread: Psychedelic Wellness]
- The Great Crash Diet. [Reread: The Wellness Industrial Complex]
- Zwift to host cycling’s Esports World Championship. [Reread: The Metaverse of Fitness]
💰 Money Moves
- Bayer is buying online vitamin and supplement company Care/of for $225M.
- Laird Superfood, the plant-based food company started by big wave surfer Laird Hamilton, filed for a $40M IPO.
- Sports performance company Amp Human was awarded a $1.5M contract from the US Air Force to test its hydration-focused products on special forces units.
- Global food company Sovos Brands acquired Birch Benders, makers of better-for-you pancake and waffle mixes, for an undisclosed amount.
- Emme, creators of a birth control adherence device and app, raised $2.5M in seed funding. More from Fitt Insider: Women’s Health Revolution
- Genome Medical, a telehealth company pairing patients to geneticists, received $14M in a Series B extension led by Samsung’s Catalyst Fund.
- Denmark-based Plant Jammer, a consumer app using AI, big data, and culinary science to create plant-based recipes, raised €4 million in new funding.
- Good Karma, makers of flaxseed-based dairy alternatives, bought back its majority stake from a bankrupt Dean Foods after receiving investment from Valor Siren Ventures. More from Fitt Insider: The Quest for Cow-Free Milk
- Canadian food company Sol Cuisine added $10M in funding to expand US distribution of its plant-based frozen meals.
- Indian yoga and mindfulness startup SARVA secured an undisclosed sum from Cutting Edge Group as part of a partnership granting the wellness app access to streaming service myndstream.
- UK-based wellness app Urban raised £2 million in crowdfunding to scale its booking platform for self-care services.
- Hazel Health, a telemedicine company offering healthcare for children in public schools, secured $33.5M in a funding round led by Owl Ventures and Bain Capital Ventures.
- Food science startup Climax Foods added $7.5M in funding to create plant-based cheese with machine learning algorithms.