Katy Huberty talks Apple on Squawk Alley (video)

Morgan Stanley’s chief tech analyst on healthcare, 5G, China and why Hollywood would want to partner with Apple.

Six minutes, seven soundbites:

  • If there’s any technology company today that is well-positioned to pull this off and build the trust of healthcare institutions and consumers it is Apple.
  • Apple has almost 60% revenue share in wearables today and we expect that to migrate not just from your wrist but to your ears [and beyond].
  • It’s important to know that Apple users spend 10 times more than Android users on services.
  • Near term, iPhone data points are stabilizing. We’ve seen the data in China improve after price decreases.
  • Longer term, we believe Apple sees 5G as a huge opportunity.
  • Apple historically has been late to market on new communications technologies because if you’re going to pass the higher cost on to consumers, the benefit needs to be there—the networks need to be built out.
  • iOS and the App Store is really the only path to market for those who want scale.

Cue the video:

Apple is well-positioned to earn the public trust in health care, says expert from CNBC.

My take: A class act.

See also: Morgan Stanley: How Apple will transform healthcare

5 Comments

  1. Robert Paul Leitao said:

    Katy a class act? Sure. Every time she talks I want to sit up and take notes.

    Health care is a huge opportunity for Apple. The company does and will spend billions developing its products and services and can leverage the existing infrastructure in the medical services industry to make it more efficient while protecting consumer privacy.

    Although pundits often claim Apple’s product prices are too high, the claims only reveal a lack of understanding of the potential of Apple’s investment in innovation and how this ongoing investment will lead to new solutions and entry into new markets.

    Apple’s gross margin as a percentage of revenue hasn’t risen in years. Innovation is expensive but innovation leads to new opportunities. Health care is among the biggest opportunities for the company but it’s not the only opportunity being created for the benefit of consumers and shareholders.

    Meanwhile, I expect more partnerships to be established with medical services providers and insurers over the next few years.

    1
    April 9, 2019
    • Fred Stein said:

      Yup. I like the way you and Katy think, and articulate.

      Agree on gross margins and prices. Apple’s GMs are not high for tech products. Clone makers whether PC or Android must keep margins low because they have no competitive advantage, with two exceptions, Samsung and Huawei who do invest heavily in R&D and manufacturing technology.

      I would also argue that iPhones ASPs are considerably lower, if we count used iPhones. Used iPhones prices and capabilities compare with the lower priced Android phones. The used iPhone market is over 130M units, which would impact ASP if it were counted. And with customers holding on to iPhones longer, the cost per month goes down linearly.

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      April 9, 2019
  2. Jerry W Doyle said:

    Ms. Huberty purports in the video that Healthcare in the USA is a 3 1/2 trillion dollar industry. That is an impressive figure. Little doubt she has access to volumes of information and data on this subject. According to my research, though, health and social care industry in the USA is the fourth largest (in dollars) with a GDP value added of $1.136 trillion and represents 8 percent of the national GDP. America’s spending on healthcare per capita is the largest in the world at $8,608. Does anyone know where Ms. Huberty is getting her data to support the industry being three times worth more than what data is supporting? In terms of workers in the industry, yes, health care is ranked number one.

    1
    April 9, 2019
    • Fred Stein said:

      I have read the $3.5T figure in CBInsights.

      The devil is in the details, or rather the definitions. Big Pharma spends $B’s on research. Once tiny sector, Clinical Trials, is $65B. Does health care include over-the-counter medications, diets, etc.?

      Apple can make money, and partner, with any form health care in any country.

      Katy’s target of $90B in 8 or 9 years is a good estimate, or good guess. I always remind people, did any of us predicted UBER in 2007?

      1
      April 9, 2019
      • Jerry W Doyle said:

        Agree, Fred!

        I’m extremely confident Apple has the ability, ingenuity, technological prowess along with the R&D resources to be an integral player in disrupting the health and social care industry to become more efficient and cost beneficial to consumers.

        As I denoted elsewhere in comments on another of PED’s blogs, with the perpetual advancements in medical science, ever more new and innovative rehabilitation technologies along with the continued proliferation in designer drugs people are living longer and more productive lifestyles. “Wearables” will become an intrinsic body part of humans doing their daily activities of living.

        I believe with deep conviction that Apple will play a premier role in health and social care by offering new, unique and innovative solutions to medical service providers, insurers and to government for finding new methods to provide higher quality of care and services at reduced costs. This new role will drive increased revenues for Apple benefiting not just consumers of its services, but shareholders too.

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        April 9, 2019

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