So that’s interesting, Apple unveiled Fitness+ today priced at ~$10 a month or ~$80 a year. Apple has roughly 100 million iPhone users in the United States. That figure doesn’t take into account, iPad users or whether Fitness+ will work on Mac OS Safari, but let’s stick with 100 million users in the US – it’s a nice round number. If Apple can convert just 6% of their install base, that’s almost half a billion dollars of incremental and recurring revenue.

Oh and by the way, the Apple Watch Series 6 now has an oxygen sensor which is already being tested to determine whether it can be use to detect early symptoms of Covid-19:

https://www.apple.com/newsroom/2020/09/apple-watch-series-6-delivers-breakthrough-wellness-and-fitness-capabilities/

Apple Watch + iPhone = Medical Device

The key takeaway for me is that it reaffirms the idea that Apple is getting into the healthcare business. That’s probably another trillion dollars in market cap waiting to happen.

A medical device that monitors my health and well being, that could detect early symptoms of Covid or other diseases – right on my wrist and in my pocket.

It’s like living in the future.

In my humble opinion, Apple is definitely building a search engine. Much has been written about the updates to Applebot’s support page, but what I found most interesting was this job posting

Specifically, the use of the words Semantic Search and Knowledge Graph. Historically, SIRI search has more or less been a federated search engine that pulls results from other “search engines” including Yelp, Apple Maps, App Store, Wikipedia, and Google. Perhaps I’m reading too much into the job posting, but, my take is that Apple is building it’s own search index and Knowledge Graph.

Why wouldn’t Apple build it’s own search engine? Well, for starters, Google pays a TON of money to Apple to be the default search engine on iOS. But, over the past several years Apple’s services revenue and “other” revenues have significantly increased, thus making the money paid by Google, dare I say, expendable. Speaking of services…

The other interesting thing to think about is the upside for Apple. Apple wouldn’t be trying to build a search engine that competes with Google, in the sense that, Apple is not trying to sell ads. Apple makes money by selling iPhones, iPads, accessories, Macs, and services, which now include Apple Music, TV, and News. So, why does that matter? Apple doesn’t need to or want to sell your data to advertisers, which is why Apple is able to take such a strong position on data privacy. In theory, Apple’s search engine would be customized and personalized based on your search history, location history, news articles, podcasts, music, contacts, health, documents, emails, etc. and that information would ONLY be known to you and your devices – never sold to advertisers. In effect, an Apple (SIRI) search engine could make the ecosystem that much more powerful.

It’s like living in the future.

It’s no big surprise that exercise equipment companies have benefited tremendously from the pandemic. During their most recent earnings call, Peleton reported that they ended the year with 1.09 million connected fitness subscribers – who pay $39 a month. Another 316,800 people paid for Peleton’s $12.99 digital (app) subscription which offers both live and on-demand classes. And that got me thinking 🤔 why is Nike giving away it’s content on the Nike Training Club app for FREE? And while we’re at it…

• Why hasn’t Nike made a move to develop in-home exercise equipment or purchase a company like Mirror – who was recently acquired by lululemon?
• Where are the Nike “MasterClass” workouts that offer tips and instruction from notable world class Nike athletes?
• There’s a CrossFit on every corner, but, where are the Nike branded gym facilities with huge murals of Lebron and Air Jordan on the walls along with licensed and certified Nike instructors? The gyms would, of course, also double as stores to try out and buy shoes, clothing, and equipment.
• And what better way to finish a workout by drinking a Nike chocolate protein shake to help promote recovery.

Perhaps it’s a bit of a reach, but it occurs to me that Nike could send it’s stock into the stratosphere by building a recurring revenue model through content, gyms, and personal training. Shoes, Clothing, Equipment, Nutrition, why not push into every stack in the vertical? How is this not already a thing? I’m over-simplifying, but, I do think there’s a tremendous opportunity for Nike in a post-pandemic world.