With the announcement of a new health-tracking device, Halo, Amazon takes a step in the direction of probably the most disruptable marketplace, healthcare.
Last week, Amazon revealed the latest addition to its first-party-data-fuelled empire, the $100 Amazon Halo. According to a press release, it works something like this: for the initial price, plus a $4 a month membership, users will be able to track their activity and sleep patterns like other health wearables.
But what is notable, aside from the fact that Amazon’s entry into any market is notable, is its ability to analyse body fat percentage – creating a digital model based off four photos, from which it can then project how you will look with more or less fat using a slider – and tone of voice.
Given the company’s prowess in voice, a market in which it was the first major player, this feature fits into a robust back end. But this microphone exists to understand a user’s emotional state, rather than taking in commands.
“Tone complements traditional metrics like sleep and activity by helping you understand how you sound to others,” writes Dr. Maulik Majmudar, Principal Medical Officer for Amazon Halo, in a blog post explaining the feature. “It uses machine learning (ML) to analyze the positivity and energy of your voice – positivity is measured by how happy or sad you sound, and energy is how excited or tired you sound.”
Of course, this sounds like a privacy nightmare. The company has responded vigorously to suggestions that it would sell this data or combine it with existing Amazon data – Halo will use a separate account. The company has also resisted assertions that it would sell against that data.
However, customers who explicitly opt-in will be able to share their data with selected third parties such as WW (FKA Weight Watchers), John Hancock Vitality (the wellness program included with JH life insurance policies to reward healthy lifestyles), and Cerner (a provider of electronic health record systems) to give a user’s care teams a clearer picture of their health.
Those are the company’s words, but they hint at how Amazon could likely establish itself as a platform through which to carry health data capable of overcoming differences in healthcare provider or systems’ record-keeping systems and establishing a powerful global standard. Healthcare is disruptable in more than just price.
But there are several key ideas that it reveals. First, Amazon isn’t making a device for fitness fanatics, who are well catered-for and are likely seeking a higher-end product. Instead, Halo appears aimed at those looking to be just a little more active.
Second, never underestimate Amazon’s selling power. It has an immense network and it isn’t precious: if its initial offer isn’t working, it will adapt; and if it’s still not working, well, Amazon isn’t squeamish about killing off products. It is also au fait with entering a market at a low price point – early access US customers can get the band and six months of membership for $64.99.
If it succeeds, however, Amazon’s Halo could be heading to many of the company’s 150 million plus Amazon Prime subscribers around the world. Just look to the stratospheric growth of the Echo. This, too, was imperfect at first, but has now captured 70% of the US smart speaker market.
In a recent talk, prior to the launch of the Halo device, the marketing professor Scott Galloway pointed to Amazon’s vast healthcare opportunity. It’s feasible that Amazon could undercut incumbents with its signature combination of big investment and data-driven price promotions.
“They have the cheap capital and the information to do it,” Galloway points out. “They know your body-mass index, they know if you’re healthy or unhealthy.” Halo lays the foundations for such a relationship.
Beyond this, it confirms a broader idea taking root among big tech companies, as outlined by the developer and writer Can Duruk in a recent edition of his newsletter The Margins. In it, he explores the extent to which Facebook is still a social network.
Might it be better understood as a classic ideas building/buying machine where the real difference is that it builds and buys “while fighting what seems to be a never-ending, at least since 2016 or so, PR battle while not giving an inch”, he asks.
He goes on to point to the profile of Uber, which an executive once joked was not a taxi/delivery firm, but a law firm/business model consultancy. It’s arguably true, if cynical, that Uber’s real strength has been its adaptation to and vaulting of local laws. So where does that leave Amazon? What is its real strength?
Its strength lies, arguably, in the process rather than its products. Halo might survive or fail, but we’re seeing the beginnings of Amazon’s healthcare interests. They won’t be the last.