Apple Inc
NASDAQ:AAPL 1:25:29 PM EDT
309.15
+0.33
(+0.11%)
Apple's Next Big Thing is Health Care
Date Published: 2016-08-22Author: Ophir Gottlieb
Preface
Apple Inc. (NASDAQ:AAPL) may have indicated its "next big thing," and it appears to be health care technology.
STORY
Apple Inc acquired the personal health data startup Gliimpse, according to a story from Fast Company. Here's what Gliimpse does and the role it plays in health care technology:
"
Silicon Valley-based Gliimpse has built a personal health data platform that enables any American to collect, personalize, and share a picture of their health data.
In the last three years, Gliimpse has built a secure platform where consumers can manage and share their own medical records and info.
Silicon Valley-based Gliimpse has built a personal health data platform that enables any American to collect, personalize, and share a picture of their health data.
In the last three years, Gliimpse has built a secure platform where consumers can manage and share their own medical records and info.
"
That may sound rather plain, but it is yet another sign that Apple is moving head first into this field. Apple announced its ResearchKit built for the iPhone not too long ago and for the first time ever, a clinical trial was driven by the app. The goal is simple: getting participants for clinical trials is extremely expensive and time consuming which makes the entire drug testing for approval process quite onerous.
That burden is carried by the pharmaceutical and biotechnology companies, but then it is passed down to the consumer. As a populace we pay a lot for our medicine and also often times wait much longer than absolutely necessary as the clinical trial process plays out. Apple Inc may have found a way to make that process better, and if so, it's a gigantic win.
CML Pro broke the story "Apple Goes After Enormous Medical Technology Market," in where we note that Apple Inc. (NASDAQ:AAPL) officially stepped into the Health Care Technology realm by partnering with GlaxoSmithKline plc (NYSE:GSK).
"
If the GlaxoSmithKline goes well, Apple's ResearchKit will instantly become a viable, if not preferred, apparatus for clinical trials, which are often so cumbersome and costly, that small biotechnology firms have to partner with larger ones and give up a part of their ownership stake just to get the capital to move forward.
If the GlaxoSmithKline goes well, Apple's ResearchKit will instantly become a viable, if not preferred, apparatus for clinical trials, which are often so cumbersome and costly, that small biotechnology firms have to partner with larger ones and give up a part of their ownership stake just to get the capital to move forward.
"
Source: Apple Insider
MORE THAN HEALTH CARE
This move by Apple really does go further than just health care technology, but into the wearables realm of the world where the Apple Watch caught early praise but has since seen slow adoption as the company wavers in its promise to untether the watch from the iPhone.
But, whether it’s a watch, an iRing or some other wearable, this segment is going to boom and a lot of that will be driven by added health monitoring, or in this case, collection of health care data.
If this is the case, then Apple can move further down the line of a company that sells services, a type of business that has historically received a much higher valuation than a hardware maker. As Tim Cook pointed out in Apple's latest earnings release, by 2017, Apple Services revenue alone will be large enough to be a Fortune 100 company.
With the promise of health care technology attached to some sort of wearable, or even the iPhone itself, Apple is making the necessary strides to diversify its business away from the smartphone hardware market, and turning that install base into a stream of revenue that surrounds services. Here is how large the Apple Services revenue stream has become as a proportion of total revenue (via Statista):
We can see it bulging to about 1/7th of the company's revenue base. Here is the chart of revenue.
As we can see, in some stunning context, just the Apple Services business is larger than all of Facebook's revenue. While Apple has 1000% the revenue of Facebook Inc (NASDAQ:FB) its valuation is less than 80% higher and that's the power of growth and a recurring revenue model. With health care technology comes another boost, another market, and perhaps it will be "the next big thing."
The author is long shares of Apple (NASDAQ:AAPL).
WHY THIS MATTERS
That world is changing dramatically and identifying trends and companies that allow us to find the 'next Apple' or the 'next Google' is what we do. Our research sits side-by-side with Goldman Sachs, Morgan Stanley and the rest on professional terminals, but we are the anti-institution and break the information advantage the top .1% have.
Each company in our 'Top Picks' is the single winner in an exploding thematic shift like artificial intelligence, Internet of Things, drones, biotech and more. In fact, here are just two of the trends that will radically affect the future that we are ahead of:
That chart plots the growth in 4G usages worldwide and how it will grow from 330 million people today to nearly 2 billion in five years. This is the lifeblood fueling every IoT and mobile device on the planet and CML Pro has named the single winner that will power this transformation. Then there's cyber security:
Market correction or not, recession or not, the growth in this area is a near certainty, even if projections come down, this is happening. CML Pro has named the single best cyber security stock to benefit from this theme.
These are just two of the themes we have identified and this is just one of the fantastic reports CML Pro members get along with all the visual tools, the precious few thematic top picks for 2016, research dossiers and alerts. For a limited time we are offering CML Pro at a 90% discount for $10/mo. with a lifetime guaranteed rate. Join Us: Get the most advanced premium research delivered to your inbox along with access to visual tools and data that until now has only been made available to the top 1%.