September 22, 2014

This is not a typical comparison of Apple’s AAPL +0.11% products or features compared to Google GOOGL -1.29%, but it is a comparison of the underlying operating systems ‒ and even more specifically how these relate to enterprise healthcare.

Unlike consumer health and fitness, enterprise healthcare applications are typically ones that are licensed (or owned) by the healthcare facility, provider or institution for managing healthcare data on behalf of patient populations.

While it’s tempting to say that Apple’s enormous consumer brand popularity (and loyalty) will simply transfer to healthcare, I think it’s misguided for 3 important reasons.

1) Software v. Hardware: The line here has blurred considerably since Apple first launched the iPhone in 2007. In the now famous words of Marc Andreessen, “software is eating the world” and mobile handsets are becoming commoditized. Shortly after Apple’s global event earlier this month, Tim Cook all but acknowledged this shift outright during an extensive interview with Charlie Rose (part 1 here).

Rose: Who is your competition?

Cook: Well, uh, Google ‒ clearly.

Rose: People would say Samsung instantly, because of the products. They make smartphones like this. Not like this, but they make smartphones. They have the Android operating system, which is the largest operating system in the world.

Cook: Well, but Google supplies that to them. And so, I think I would say ‒
Rose: Google is your competition.

Cook: Google would be the top and they enable many people in the hardware business like Samsung and Samsung is the best of the companies in the Android‒sphere.

According to IDC numbers for 2014Q2 Android really is the dominant (and growing) mobile operating system.


Here in the U.S., Android continues to outpace iOS by more than 2-to-1 and over the course of this last year ‒ Android increased its market share by more than 11% from the same period last year (51.5% to 62.9%).

Beyond just the mobile operating system, however, are the software applications (or “apps”) themselves. Recent estimates suggest that there are now over 1 million apps in Apple’s iStore and Google Play combined. That’s an impressive volume of apps, but on average, consumers use less than 30 each month and that number hasn’t changed dramatically for the last 3 years (Nielsen here).
In the app ecosystem, while there continues to be an increase in the amount of time we spend using apps, the capacity for either Apple or Google to make this experience unique or vastly different from each other is very limited. In fact, mobile app developers themselves are keenly focused on creating a similar end-user experience regardless of the hardware device. They often lead with development on iOS ‒ and Apple is the more lucrative source of revenue for developers ‒ but that has limited applicability on the enterprise side.

As a further indication of this shift, according to comScore SCOR -1.67% (here), Google has 5 of the Top 15 apps while Apple has 2.


2) Consumer v. Enterprise: Here again, while Apple has an envious track record for consumer engagement, Apple’s interest (and focus) has been historically low on developing successful enterprise partnerships.

Another key difference is the lack of exclusivity. During Apple’s HealthKit announcement at their Worldwide Developer Conference earlier this summer, Apple was eager to showcase the number of big healthcare institutions as “partners” for developing the consumer-facing healthcare apps for use with enterprise solutions. It’s an enviable list of large healthcare institutions ‒ some with global brand recognition.

In fact, there probably isn’t a healthcare facility or institution that wouldn’t love to “partner” with Apple, but that’s by no means an exclusive agreement. Enterprise healthcare isn’t bound by the same requirements, restrictions or revenue models that direct-to-consumer apps are. Enterprise healthcare solutions looking to engage patients aren’t looking to generate revenue with mobile apps ‒ and similarly ‒ any app development they do is an enterprise cost associated with large IT budgets. This isn’t remotely comparable to an early stage software venture eager to impress venture capitalists with simple download and usage metrics.

3) Price. There is simply no way to avoid this. On the global stage this is also much bigger than just healthcare. Apple’s latest model ‒ the iPhone 6 ‒ starts at $649 (contract free 16Gb model) and the 128Gb iPhone 6 is $849. As more consumers look to shed their long-term cellular contracts as expensive and complicated ‒ Android provides a significant advantage for the budget conscious. Smartphones based on Android’s latest operating system (KitKat) are readily available (also unlocked) for less than $200 ‒ and some are even less than $100. Here’s one with some fairly impressive specs (and 4.3 stars out of 5) on Amazon for $148.

In the end, unless healthcare providers (or payers) want to get into the business of subsidizing the actual handset, they’re simply not in a position to dictate either Android or iOS as a patient platform. While they are definitely anxious to embrace Apple’s consumer brand loyalty and cache, they are far more likely to embrace a more agnostic technical view relative to the competing mobile platforms ‒ and given the enormous strengths of both Apple and Google ‒ we are likely to have this duopoly for a very long time.


No comments

Be the first one to leave a comment.

Post a Comment