As Amazon.com Inc. dives into the crowded market for biometric-monitoring wearables, the company is betting that its lower cost and unique features will draw customers — and add fuel to its healthcare efforts, experts say.

The Amazon Halo band, unveiled Aug. 27, is a screenless fitness device that uses sensors to upload biometric data like heart rate and temperature. It can also track physical activity and sleep.

The Seattle-based e-commerce company says its new Halo band is powered by artificial intelligence technology that provides consumers with "actionable insights into overall wellness," part of a play to differentiate the device with features and a lower price point that will help it stand out from competitors like the popular Apple Inc. Watch and Fitbit Inc.'s suite of products.

The company is offering an introductory price of $64.99 before raising it to about $100. Halo's applications include a Labs feature that uses machine learning to determine the best workouts for users and the Body feature that allows users to visualize themselves at different body fat percentages. Additionally, the Tone feature listens to users' voices and gives them an indication of their relationship health with other people. The proprietary features like Tone and Body cost an additional $3.99 per month.

An Amazon representative declined to comment for this story. But experts say mass adoption of such a device will mean adding more functionality to the band over time and incorporating aspects of its larger ambitions in the healthcare arena into the device. Amazon's healthcare initiatives include virtual care services to employees and its Haven joint venture with Berkshire Hathaway Inc. and JPMorgan Chase & Co.. Amazon could perhaps allow Halo-wearing consumers to order medication through PillPack Inc., the online pharmacy Amazon bought in 2018, or tie in Halo with offerings of its Prime membership program, said R.J. Hottovy, an analyst with Morningstar, in an interview.

"I would be shocked if we didn’t see prescriptions from PillPack all rolled into something like that and had functionality through this device as well," Hottovy said. "That was always kind of our thought, that they would have a wearable device at some point that tracks data and from there, you could see other services."

Crowded market

Amazon is taking on companies that have already been in the wearables market for years, including Fitbit, Apple, Garmin Ltd. and Samsung Electronics Co. Ltd.

Apple released the newest version of its Apple Watch product on Sept. 15, which introduced additional health features like pulse oximetry and sleep tracking — a likely response to Fitbit's longstanding sleep monitoring feature.

Fitbit's newest device, the Fitbit Sense, includes electrodermal activity sensors that can detect users' stress levels. Google LLC recently submitted commitments to the European Commission regarding its $2.1 billion proposed acquisition of Fitbit.

Amazon is releasing its fitness tracker at a time when the market for such devices appears to be slowing down. According to a survey conducted by 451 Research LLC, a unit of S&P Global Market Intelligence, the health and fitness devices market has seen declining demand over the past several months while smartwatches have been steadily growing in popularity.

"The high-end part of the tracker market is pretty much dried up because [of] that overlap to the low end of the smartwatch market," said Christian Renaud, research director of 451's Internet of Things division. "Smartwatches are so much more feature capable for the price point."

Even so, Chris Ventry, vice president in the consumer and retail practice at SSA & Company LLC, believes that Halo still has potential. The COVID-19 pandemic has underscored the importance of recognizing underlying health conditions, according to Ventry, and Halo's price point and subscription model places it in a good position.

"It's simple-looking, it allows for temperature taking; it has a microphone. [It] does not have a screen, so [visual communication] will be done via an app," Ventry said. "It's already positioning itself very differently than, Samsung, Garmin, Apple, even Fitbit to a degree."

A benefit of many wearable health and fitness devices is that they are centered around individualized care in which vitals signs are compared with what is normal for an individual as opposed to an entire population, according to Steve Steinhubl, director of digital medicine at Scripps Research Translational Institute. Amazon has incorporated many individualized care tools into Halo from biometric data collection to the Body, Tone and Labs features.

According to Ventry, prior failed ventures, such as Google Glass, have taught companies like Amazon that wearable technology has to be "palatable" as well as functional for consumers.

"The product really needs to solve a user's problem or problems and also come at a fair price, so I think this is where Halo is. [It] tries to address some of those things that, historically, some information technology providers have failed [to address]," Ventry said.

Protecting Data

Part of the health wearable market's appeal to Amazon is the ability to access consumer data and to identify trends before competitors, according to Ventry.

While consumer data may be crucial to the company, Amazon has described privacy as "foundational" to its Halo device. Certain health data will be encrypted on the cloud while other information, such as voice recordings collected by the Tone feature, will be analyzed on the device and then deleted.

But like any digital technology handling sensitive information, the Halo device's data and privacy protections are already under scrutiny.

Concerns come from the fact that much of the data collected by Halo falls into what Paige Bartley, a senior research analyst with 451 Research, calls "a regulatory gray zone." Under the HIPAA privacy rule, a doctor would not be allowed to share information about patients' blood oxygen level or heart rate after a hospital visit, but this same information on a wearable is not considered to be traditional clinical health data, according to Bartley.

"This is potentially highly sensitive data that's being collected on a 24/7 basis that could give someone very detailed insight into your lifestyle and behavior more so than a single doctor's visit, yet it doesn't have the protections of the data that would be collected during a doctor's visit," Bartley said.

And according to Bartley, there is still plenty of information regarding Amazon's algorithms that remains unclear, including what other data may be collected and how the algorithm makes its conclusions.

"That's what we don't know when these machine-learning algorithms are opaque and proprietary," Bartley said. "There's no transparency; there's no auditability of them."