Basically, iOS 8 Beta 3 flipped the switch to M7. New devices like the iPhone 5s, Aid Air and retina iPad Mini have an extra processor that is good for motion related functions. M7 can accurately measure speed, acceleration compass and gyroscope so that it knows where you are and how fast your are moving.
With this new update, all the above mentioned devices plus the iOS 8 get new native capabilities. And with them, comes responsibility to wear the device so that it will record accurate data.
So far, the M7 coprocessor has been used by 3rd party apps like Nike and Strava, but this would be the first time a native Apple app is going to taste it.
Besides the M7 integration for Steps, the Health App will also shows a new tab - "Caffeine". If you're an avid coffee drinker you can surely track how many cups you have per day and, potentially, how bad is that for your body.
The Health app has not shown its full potential just yet. Apple is making sure the Beta stays the same until everything is ready. Also, Apple may release a new iWatch this fall and that device may be connected to your phone to send or receive info about your health.
Apple has described the Health App as a way to show relevant information about your condition and gather new ones as they happen. The app can measure fitness data, track metrics or measure different other status information provided by a health band, your snicker shoes or any other wearables Apple or other companies may release over the next year.
On the official iOS 8 Health preview page, the app is said to provide inside info like blood sugar and cholesterol which are currently available only through a blood check. Apple is ready to provide a full fledged emergency card with all the relevant medical history.
Integration with other apps will be provided via HealthKit APIs. For example, a developer can create an app that will only take your blood pressure info and send it to your doctor in it goes over a certain value.
The user will be in control. As mentioned in the new Security and Privacy settings for iOS 8, Apple will only allow you, the user, to enable what you want to share with each app.