Big techs continue to make moves toward the goal of "healthcare disruption," Loup Funds co-founded Gene Munster said in a recent note.
Big Tech's Healthcare Investment Spike: Between 1999 and 2022, Amazon, Inc. , Apple, Inc. (NASDAQ:AAPL), Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) collectively acquired 22 health-related companies, Munster said.
This includes Apple's $200 million acquisition of Gliimpse in 2016, Google's $2.1 billion Fitbit buy in 2021, and Microsoft's $16 billion purchase of Nuance earlier this year, the tech expert said.
"We expect that over the next two decades, Amazon, Apple, Google, and Microsoft will play increasing roles in healthcare and will siphon sales from the industry's massive addressable market," the analyst said.
What Would Big Techs Focus On: Munster outlined the following as focus areas for each of the companies:
- Amazon: logistics, testing and primary care, with a separate ambition of providing insurance
- Apple: device layer along with data storage, leveraging on its hardware, software and services core competency
- Google: advancements in research with AI and thin device wearable offerings
- Microsoft: cloud solutions to healthcare providers
Related Link: 3 Key Building Blocks Of Apple's Health Care Quest
Healthcare Opportunity: Munster sees U.S. healthcare alone presenting a large addressable market, with annual spending of around $4 trillion. Assuming Apple and Amazon capture 2% of the annual spend, it would bring in $80 billion in revenue now, the tech venture capitalist estimates. This could grow to $125 billion in a decade, he added.
"Wellness is a big enough market to move the needle for both tech giants," he said.
Will Government Be Supportive? The government will most likely not allow Big techs to take over, Munster said. But it could allow these companies to participate, given it's a highly fragmented one, he added.
Outside of the FTC regulating competition, the industry has a maze of operational regulations., Munster said. All of those requirements make it difficult to enter and disrupt the broader healthcare market, he added.