healthOS

This essay was co-authored by Rob Litterst and Nathan Baschez.

Click here for the Russian translation.

1

“What do we do with Apple,” Jim Cramer barked, sleeves rolled above his elbows, “now that it's become one of the most hated stocks around?”

It was January 2019, and AAPL was in free fall. The main concern was the iPhone. Growth seemed to be slowing, and investors were panicked.

Shares cost just $150 — 35% down from the all-time high they hit a few months prior. Things were so bad that Ben Thompson published an article that week titled “Apple’s Errors” and led with this chart:

“Now, we've heard a lot of theories about what might be going wrong here at Apple” Jim Cramer continued. “But, you know what, I prefer to go straight to the source. So earlier today we snuck out to Cupertino for a long meeting with Apple's CEO Tim Cook.”

Cut to Jim and Tim perched on stools in the middle of a crowded Apple store, customers awkwardly shuffling around in the background, sneaking glances at the camera.

Jim got straight down to business:

“You know I always say, ‘Own it, don’t trade it.’ But right now, people are saying, ‘Jim, give me the investment case for buying the stock.’”

This was Tim’s moment. Traders throughout the nation sat, transfixed in agony, fingers hovering millimeters above the “sell” button. 

“Well, you know, I never try to sell a stock. I try to sell a product. However, let me tell you the way I look at it: we manage the company for the long term.” He then went on about all the stuff you’d expect — Apple’s culture of innovation, huge install base, high customer satisfaction, etc. 

But towards the end, Tim said something important that many may have missed. Something that wasn’t built into the traders’ financial models, but nevertheless may hold the key to sustaining Apple’s growth once the iPhone matures:

“If you zoom out into the future, and you look back, and ask the question, ‘What was Apple’s greatest contribution to mankind?’ It will be about health.” 

Health?!

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When people think about Apple and health, the first thing that comes to mind is the Watch.

But the real lynchpin of Apple’s health strategy is this humble app:

Apple is building it into the OS for Health.

Specifically, they’re building a system to aggregate data from modern connected devices (like watches, scales, fitness equipment, mattresses, etc) and integrate it with traditional health records (lab results, conditions, medications, procedures) in order to unlock a new, comprehensive view of your body’s health.

Traditionally, these data sets have lived in silos. But what could happen if it all was aggregated safely in one place?

The impact on your health, and on the healthcare system more broadly, would be enormous.

For example:

• Imagine when you sign up for a new gym, you can connect Apple Health. Data can now flow in both directions. So your trainer could know you had a herniated disk, and your doctor will have access to your workout history.
• Imagine a smart toilet that can sample your stool and send the data to Apple Health. Imagine this triggers an automatic analysis by an algorithm developed by your healthcare provider, which takes into account the context of all your other health data (e.g. weight, heart rate, sleep, DNA), in order to proactively suggest you schedule an appointment if any anomalous patterns are detected.
• Imagine the healthcare system was able to operate 10x more efficiently, because continuous background data collection and analysis eliminated unnecessary visits, reduced misdiagnoses, and caught most issues early enough to be solved with simple procedures.

Of course, these stories are still just imaginary. The technology has a long way to go, healthcare is a notoriously distorted market, and Apple isn’t the only tech giant interested in becoming an aggregator of health data.