Analyst: Apple’s iWatch May Be Subsidized by Health Insurers

Source: iWatch Concept by Todd Hamilton

Source: iWatch Concept by Todd Hamilton

Could Apple’s (NASDAQ:AAPL) iWatch encourage users to live a healthier lifestyle? In a recent note to investors, Cowen and Company analyst Timothy Arcuri argued that Apple may ask health insurance companies to subsidize the cost of its long-rumored smartwatch, similar to the way that wireless carriers subsidize the cost of a smartphone, reports Investor’s Business Daily.

“We continue to believe it is possible the product (iWatch) is backstopped by some sort of insurance subsidization model similar to the carrier subsidization model for iPhone,” wrote Arcuri in a note obtained by Investor’s Business Daily. Apple’s iWatch is rumored to include several medical sensor technologies that would allow users to monitor various biometric data related to health, exercise, and diet.

“We continue to feel this product will differentiate itself with existing wearable products primarily from a health perspective with a number of key innovations including noninvasive blood cell count and blood pressure and other more pedestrian features like heart rate,” noted Arcuri, according to Investor’s Business Daily. The Cowen and Company analyst believes Apple will launch its iWatch in September based on his supply chain checks. Arcuri predicted that the device will retail for around $250 and that Apple will sell approximately 18 million units in 2015.

Arcuri’s iWatch timeline aligns with a recent prediction made by KGI Securities analyst Ming-Chi Kuo. However, Kuo believes that Apple will launch two different iWatch models in the third quarter of this year, including a luxury model that will cost thousands of dollars, according to a research note seen by 9to5Mac.

Although Apple has not even confirmed the existence of the so-called iWatch, there have been multiple rumors and information leaks that suggest the Cupertino-based company has plans to unveil a wearable tech device with non-invasive health-monitoring technologies. Last summer, 9to5Mac cited insider sources that reported that Apple had assembled a wearable tech product development team with medical sensor experts from companies such as AccuVein, C8 MediSensors, and Senseonics. Since then, several other medical sensor expert hires have been confirmed by various media outlets.

For example, earlier this year NetworkWorld reported that Apple had hired Marcelo Lamego, a medical sensor expert who helped to develop the Pronto-7, a non-invasive medical device that can detect a patient’s hemoglobin levels, pulse rate, blood oxygen saturation levels, and perfusion index. Around the same time, the U.S. Food and Drug Administration calendar revealed that several Apple executives met with officials from the agency to discuss “Mobile Medical Applications.”

Finally, unnamed sources cited by 9to5Mac have leaked information about an upcoming fitness-tracking and health-monitoring app called “Healthbook.” The app will manage nearly a dozen different categories of biometric data, including bloodwork, heart rate, hydration, blood pressure, activity, nutrition, blood sugar, sleep, respiratory rate, oxygen saturation, and weight. Taken together, all of these rumors seem to indicate that Apple is developing an iWatch with health-monitoring functions. However, Arcuri didn’t offer any evidence to support his theory that Apple will try to convince health insurance companies to subsidize the cost of the iWatch.

Here’s how Apple closed out the trading week on Friday.

404

More From Wall St. Cheat Sheet:

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)