What would happen to Apple’s share price if the company took its hardware and software prowess to the healthcare field?
Investors may not have to wait long to find out.
At the company’s developer conference on Monday, Apple announced GymKit. In the newest update to the watchOS, Apple is letting athletes and gym-goers sync their Apple Watches with gym equipment to more accurately track your workouts.
The technology uses the same NFC chip powering Apple Pay to let users tap their watches to compatible equipment to measure calories burned, distance ran and other metrics. This data can be used in tandem with the Apple Watch’s current capabilities to create a more holistic view of your fitness.
But, according to Macquarie Research, this is only the first move in a string of innovations that will move Apple more firmly into the healthcare industry.
Apple CEO Tim Cook was recently spotted walking around the Apple campus with a noninvasive glucose monitor, a device designed to monitor blood sugar levels without drawing small amounts of blood several times a day or inserting a probe through the skin.
Apple is reportedly working on a blood sugar monitor that would not require either of these painful methods and allow real-time constant monitoring. If the company could pull this off, it could change people’s eating habits, as results from drinking a sugary soda could be watched in real time.
In Apple’s WWDC keynote it released an application programming interface allowing developers to send data to the Apple Watch, which glucose monitor maker Dexcom has already said it will be utilising for its products.
Macquarie points out that other companies, like Google and its contact lens for monitoring blood sugar, have tried similar initiatives but failed due to the difficulty of the underlying science. It would indeed be a big opportunity if Apple has found a way to pull what its competition can’t.
The final point Macquarie makes is the rise of health and fitness apps in the Apple app store.
Apps like Sweat, Headspace, and MyFitnessPal have risen to the top of the app store, signalling consumers’ desire to monitor their well-being and receive health advice through apps. Apple said the Health and Fitness category has grown by 70% in the last year.
Subscriptions to these apps is a big source of revenue for Apple. Paid app subscriptions are up 58% this year compared to last, and all of the aforementioned apps are top grossing in the app store because of their subscription models, according to Macquarie.
The research firm has a price target of $US160 for Apple, 4.8% higher than its current price. Apple is up about 30% so far this year.