OK, so there is a substantial subsidy in play. Whether the idea can apply or not comes down to Apple's ability to negotiate it's way on to the approved device list and getting enough subsidy so the 5%-20% an individual pays out of pocket plus the 80%-95% paid by the government or insurance = the full price including the margin Apple would want if it was selling this iWatch outright.
Negotiating with subsidy payers in many countries is exactly what Apple did/does with iphone. So can that be replicated with some kind of super health device? That's the idea.
There you imply that a dedicated diabetes tester is valued at a low price. It would be here too. But the rumors are multiple sensors. I've seen numbers like 8 or 10 or more. I've also seen price rumors of $200. $200/10 sensors = $20 each. If you government or mine values each sensor at $10, then the $200 iWatch might be sold at $100 out of pocket + $100 from those who pay the subsidy. IPhones apparently cost $600-$900 outright. But "we" think of them at $199 or $99 or free* because of the subsidy. Same idea.
If we can't imagine paying-say- $500 for this iWatch but that's what Apple wants for it, can they get a subsidy model to make it cost $199 or $99 or free*? I'm speculating maybe in the U.S. You're saying no way in Europe but then offering up subsidy examples where some things can get covered up to 95%. can Apple bundle up a number of those some things so that the cost conscious ministry will approve this iWatch for such subsidies? If so, that's how my wild idea also works in Europe.
You know the situation there better than me and I freely admit it's a wild idea, so I'll take your feedback as more likely than my guessing. For me though, no subsidy model makes the iWatch concept much harder to imagine being adopted by the masses. IPhone 1 didn't really do that well until the price that Apple wanted for it could mostly be paid via subsidy.
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No one has said why there is so much dislike for Swatch in this thread. Is it because they're low cost?
In the U.S., the Swatch brand is mentally attached to colorful, cheap, mostly kiddie watches. It's not generally known that Swatch is much more than that (for instance, behind a VERY premium brand like Omega too). So I think the perceived dislike is in the idea of "our" favorite premium brand-Apple- being associated with a (perceived) cheap brand like Swatch.
If this article had referenced partners like Omega and Movado instead of Swatch and Timex, the sentiment would probably be entirely different.