Amex Platinum, Chase Sapphire Perks Fuel Health Gadget Craze

0:00Is your multi-entity management creating more confusion than clarity? You need the Intuit ERP. Intuit Enterprise Suite. It's the AI-native ERP solution that's powerful, painless, and proven. Learn more at Intuit.com slash ERP. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. So, Carol, I don't know if you know this. Apparently, I did not know about the story to Hormuz math there. Listen, a lot of numbers come at us, okay? Let it go. Yeah, you gotta let it go. All right. But I do like when I'm right.

0:46I know. So don't let it go. He so loves it. So don't let it go, actually. It's like, hey, guys, did you see when I got right in the show? I was actually going to go to the next thing that we were supposed to talk about. Okay, okay. I wasn't going to. I know. I obviously need to let it go. Trot on that born territory. I know. I'm giving you props because you got it right. Between aura rings and whoop bands. Whoop. Whoop bands. There's a health gadget craze happening right now. We can thank those premium credit cards from Amex and Chase. Yeah, in a big way. This is a great story that's on the Bloomberg.

1:14It's, I think, among the most read or when it did cross on the Bloomberg. Cam Baker is Bloomberg News breaking news editor. He joins us from the Bloomberg News Boston Bureau. Cam, good to have you here with us. Tim, I believe, has his aura. Oh, you don't. I'm not wearing it. I wear it at night. But I have had. You've had it. I've beaten it up. It doesn't look good. Oh, because it scratches. It's all scratched up, yeah. All right. I have one, too, and I just have to put it on my finger and get it going. But I mean, but a lot of - Cam's like, I'm sitting here, guys. Can you talk to me about this?

1:42But our credit card companies are all in on these things. Tell us what's going on. Yeah, so basically a lot of the premium cards, the Annex Platinum, the Chase Sapphire Reserve, all bumped their fees earlier this year to some getting close to$1 ,000 a year. and they paired that with a bunch of perks, those being these wearable tech bands or rings and consumers to justify that higher fee have been cashing in on that benefit, which often covers a full year subscription and the band. But it's kind of genius, Cam. It seems kind of genius on the part of these companies because you get the first year free, essentially, or you get the hardware for free or a big discount for free, But then that high margin business, that subscription that they hook you on, whether it is X number of dollars per month for Aura or Whoop, that seems to be where they get you and it ends up being so good for these companies.

2:42Yeah, I think it's kind of a win-win. The customers are happy and the companies like Whoop and Aura are doing well. Chase Sapphire said this is one of their best promotions that they've had this year. Whoop also said they've had a ton of sign-ups from this. So for a band that would normally cost$400 to have that already just baked in, it's a little bit, sources and people that I talk to were like, it's a no-brainer. I don't know why I wouldn't sign up. Hey, Cam, is this just like these credit cards, whether it's Sapphire or Amex Platinum? Tim and I talk about this and different benefits that are there.

3:18And they'll be like, did you use your credit, the quarterly credit and all this stuff? Like, I mean, these are not inexpensive cards, what you have to pay the fees for the year, the yearly charges. I mean, you're talking$800 and so on and so forth. But these things start to add up, and then you can be like, eh, maybe it's not so bad. But I feel like they also are hitting a certain sector of the consumer that likes wearables. Like, you see them. We see them on a lot of people who come in. Like, they've got the right audience. They're definitely targeting a premium consumer who likes premium goods, and they're becoming, do you need to have a sleep recovery score every single morning to have a good night's sleep?

3:57Do you? Yeah. No, but it's a bit of a status symbol to be wearing your Oura Ring or your Whoop band in addition to your other watch. So they've definitely cornered the market with people who like to have these cards also like to wear these accessories. Didn't during the pandemic, because people weren't traveling Amex, right? I think it was like you could an Apple Watch or something like you could apply money like they kind of benefit or credit. I think it was pretty steep, actually, in terms of like buying an Apple Watch. So I don't know. I mean, does it make a difference, though, in terms do they see a direct correlation between this type of benefit?

4:38and people signing up for the card or staying with the card? I think it's more the other way around. The wearable companies are seeing a huge benefit. It's not a huge sweat off the card. Companies back, and they are already having to come around ways to why you should pay near$1 ,000 a year. But it's definitely for the wearable side, for Wupanora, it's been kind of a big win. And Whoop just, we reported last week, Whoop raised$575 million for about a$10 billion valuation or is about the same. So it's a good run, to say the least. Yeah, it's pretty wild. I mean, I want to say it's like 12, 13 years ago at this point I was covering technology, went out to the Consumer Electronics Show in Las Vegas.

5:34And this was before the Apple Watch came out. Apple was standing on the sidelines. They were developing the watch. But the whole focus was on wearables. And there were so many different companies. And Whoop and Aura didn't even exist at that point. But they seem to be, along with Apple and Samsung, kind of the last ones standing cam. Like, these seem to be sort of the sticky ones, the ones you talk about. Okay, well, you know, not only are they worth, like, north of$10 billion each, but also these are the companies that potentially could IPO. Like these, I think it's fair to say, these are the last ones standing, right?

6:07Yeah, I mean, Whoop said, the CEO said in a Bloomberg TV interview last week, 18 to 24 months is what they're looking for. Or has been talking to bankers. So yeah, the employees and the market is definitely awaiting them going public. I think the big question longer term is both of them have kind of flirted with payments, but the even bigger one is like, how are we incorporating AI into health tech? And who is going to be the company that is, whether it's a chip in you or a band, or who is going to be the name that basically is translating your continuous heart rate to your doctor's office? Yeah, it makes me think, you know, listen, Apple's, you know, I think increasingly moving into this space.

6:54Like you do think about some of the big tech companies that are out there. Think about the companies that used to be around, Jawbone. I loved my Jawbone. Go back. Loved it, loved it, loved it. And that was a sleep monitor. And I loved it. And it's, where is it? It went out of business. Same with Misfits, Sunnyview's company, the wearables company. Cam, you bring up a good point. Carol, you bring up a good point. Think about the most recent, the investors in the most recent round for Whoop. Abbott, a company that is in pharmaceutical space. Mayo Clinic as well. Yeah. So is that, I mean, is that the future of these companies?

7:25Is it going to be like a medical product? That's what they hope, and that Whoop has definitely had a few clashes back and forth with the FDA. It's this little bit of a gray area where, you know, are you a traditional default into, like, the pharma medical tech stack? Or are you a consumer tech company? but in order to justify valuations that are above that$10 billion mark, they're going to have to lean into integrating with some of these more longer term legacy systems, healthcare systems. You wearing one of these, Kim? Sadly, I'm wearing, not sadly, I love it. I'm wearing my older Garmin. I don't have a Whoop.

8:09I forgot to mention Garmin. I'm glad you mentioned it. Yeah. Even though they're based in, Whoop is based in Boston right behind me, so I should lock the doors they're going to be big you bring up a good point Garmin a big player there too especially with like the people who are you know the big runners or you know want that GPS compatibility too yeah and Google also has we reported that they are interested in redeveloping potentially their Fitbit portfolio alright Cam thanks so much for cool stuff joining us on Bloomberg