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While investors may disagree on AppleFrom (NASDAQ:AAPL) in the short term, the long-term vision is much more consensual. Yes, the famous giant of the mainstream technology faces serious questions, especially with regard to the "advanced smartphone" of the time. However, the constant desire of management to turn to other sectors gives a second wind to the actions of Apple.
This is especially true in the health care sector, worth $ 3.5 trillion. With the ever-growing merging of society and technology, it makes sense that an organization like AAPL is looking for opportunities for health and well-being. Specifically, the clothing technology revolution can offer an alternative revenue channel to support the highly saturated device segment.
Among the clothing rivals such as Garmin (NASDAQ:GRMN) and Fitbit (NYSE:IN SHAPE), the ultimate price is the development of high-end biosensors. Today's wearable devices are able to track their pace, heart rate and even sleep patterns. However, the shift to superior technology – such as non-invasive blood glucose monitoring systems – is the gold mine.
If Apple can get there first, the realization could explode the stock of AAPL. Morgan Stanley estimates that at the top of the hierarchy, the health division of the company could generate 313 billion dollars by 2027. As a reminder, the turnover achieved by Apple amounts to 266 billion dollars the year last.
In addition, AAPL has established relationships with health insurers. Many of them are willing to pay for at least a portion of the current generation of Apple watches issued for their customers. With future biosensor products, this partnership will likely further strengthen Apple's inventory.
Given the vast resources of society, it is a daunting challenge to beg for it. However, you must know three health-related headwinds before jumping into the AAPL stock.
Medical Tech could never catch up with the hype
Most of us know Moore's Law. Basically, advances in semiconductor performance will require more and more financial investments. In the end, you will come to a point where a computer chip can no longer be reduced due to physical constraints.
A similar principle can have an impact on portable devices. If this is the case, the case of Apple stocks – at least with regard to health care – could collapse quickly.
At this moment, the futurists are excited about the potential biosensors. However, no one has been on the cusp of developing a consistent, accurate and non-invasive platform for measuring critical health indicators.
Even worse, such technology may be impossible to achieve. Any device can measure "outside" signals, such as a heartbeat. But blood sugar levels for diabetics? It is an internal molecular dynamics that necessarily requires an intrusion to take measurements.
Please note that Intuitive surgeryFrom (NASDAQ:ISRG) The advanced da Vinci surgical system is minimally invasive and non-invasive. As I said, nobody has cracked this key yet. If Apple does, AAPL shares go to the moon. But it's an aggressive gamble.
No, privacy issues are not low winds for Apple stocks.
The AAPL management team recently boasted that they had recruited 419,000 people to participate in a health study involving Apple Watch. For many observers, this is a sign that most Americans trust Apple to treat their medical data with the utmost care.
True, it's a huge number, especially for a medical research study. However, I would not want to confuse this figure with overwhelming trust for AAPL.
As Facebook (NASDAQ:FB) various controversies have shown, Americans are rightly sensitive about their privacy. And in this case, we are talking about unimportant things. But when do you approach the subject of personal health? The walls will rise faster than a presidential tweet.
This is because disclosure of health issues can have serious consequences. For example, if you admit to having cancer, you will have a lot of trouble getting life insurance. Thus, it is really profitable for Americans to keep their medical records strictly and on the principle of the need to know.
So no, Apple stocks will not benefit from public trust.
AAPL action can suffer a "dilutive" effect
Anyone can appreciate Morgan Stanley's uptrend on Apple stocks. Thanks to its extensive network of health insurance partnerships, the company can distribute future portable devices on a large scale.
At the same time, it would dilute the Apple brand. After all, the company has carefully cultivated an image of exclusivity and the price of its products is a reflection of it. However, mbad distribution via health-related networks certainly contradicts decades of marketing.
Therefore, AAPL can find itself in a winning position one battle at the expense of another. In other words, there is a reason why airport leasing agencies generally do not offer exotic sports cars from Ferrari (NYSE:RACE). You can not lead exclusively and volume.
On the surface, it's easy to get excited about new health opportunities. However, a closer look reveals that the arguments in favor of AAPL actions are not so clear.
At the time of writing these lines, Josh Enomoto did not hold any position on any of the aforementioned securities.
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