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Services are the fastest growing segment of Apple's profit and volume. Apple is in a unique position to capitalize on medical due to its relationships with TSM on the hardware side with their mems expertise and Kaiser with their large, deep, digitized data base. With the Apple watch also being another fast growing area for Apple, all these factors combine to make dominating wearable medical devices a staggeringly large, international market with the world's growing and rapidly aging population. Apple of all major companies also has the best reputation for data security, which is especially critical in medical and mandated by law in most countries. All these and many other factors make Apple the leading contender for not only medical wearables, but the platform to manage one's health. It is not a stretch to even see this mandated for many by their insurance company and maybe even Medicare and Medicaid. This is one area that would offer even a company the size of Apple, sustained, substantial growth. Apple has everything necessary to build a world wide medical platform that would feed on itself not only for Apple, but its partners. If Apple could pull this off, they could become so large they could even dwarf Amazon with their products ranging from wearables to the interface diagnostic tool for medical facilities to interfacing with medical plans, public and private. With medical a 3.7 trillion dollar market and growing in the US alone, the market is far to large to not be taken very, very seriously.
Update: Warren Buffet purchased 75M shares of Apple, Apple and Medical will be a game changer and maybe have a few surprises and unintended consequences
Both Apple and TSM are known for their ability to keep a secret, but both are known to be working in this area and with the competition this is not a market where you can wait years when their are several competitors also seeking this hyper lucrative market. Apples relationship with Kaiser is known. Medical wearables are in their infancy and with medical consuming over three trillion in the US alone, the stakes are way to high to delay. Tim Cook fully realizes he has to move into mega markets for the standard smart phone market is saturated and low growth. TSM is the powerhouse of semi fabrication and Apple the power in tying phones into an ecosystem making for a combination no one else can match.
I was at the iPhone launch last year and it was all about medical. The AI core and facial recognition is just the start. The iWatch already has wellness features. If I wore a watch I would buy one.
Check out the planned Apple Wellness center for California. The Apple employees I know have mixed feelings about this. I think it is an excellent idea, for the greater good:
The only question is who can bring the expertise and financial muscle to match the combination of Apple who is sitting on a mountain of cash and TSM with the most solid financial and technical foundation of any foundry or fab by far.
Entry barriers will actually get higher as the sophistication of diagnostics increases at a geometric rate as the data bases for physical and mental ailments get ever more sophisticated in detecting problems earlier and earlier causing an ever greater acceleration of reaching creative solutions to solve problems earlier using the results of these data bases as a guide. This will dramatically increase demand for AI/ML and the memory required. The number and cost of numerous new types of sensors will start high and then drop in the same fashion as the rest of the tech sector which has mastered lowering prices while increasing functionality at an ever increasing rate. First mover advantage as far as IP and increasing the size of your data base will be critical. The first mover with the most money, skills and relationship will win and with the stakes this high the upfront cost will be large because the size of the prize is staggering. Protecting and accumulating data and IP will be critical in winning this race and the big money and guns are going to be out from the very start. The next step will be to totally automate not only diagnostics, but surgery. If you think you can beat a machine, try to outrun your car.
