Apple Has Many Aces Up Its Sleeve

According to a post by ex. WSJ reporter Jessica Lessin, Apple (AAPL) recently purchased for an undisclosed amount Passif Semiconductor, a small Silicon Valley company specializing in low energy chip design. Passif develops communication chips that use very little power. Its technology, which includes a radio that works with a low-energy version of Bluetooth called Bluetooth LE, is promising for health-monitoring and fitness devices that need extra-long battery life.

The interesting thing about this company is that it was purchased some months ago under everyone's noses. That's correct, exactly when Apple made this purchase is unclear. Passif is not the only semiconductor company that has been bought by Apple. In 2008 it acquired P.A. Semi Inc., a designer of low-power processors that deliver more computing power per watt of electricity.

Naturally, what comes to mind is that Apple is interested in this technology for the iWatch. When making any type of wrist device, the most important issue is battery life. No one will buy any type of wrist device (smart or otherwise), if the user has to recharge it every now and then. So assuming that Apple has a technology that uses very little energy to emit radio Bluetooth waves, then that opens up a world of possibilities.

Obviously the iWatch is one thought, but why stop there? Imagine for example if you can implant a small device to monitor you heart or blood and send the data via Bluetooth to you iPhone and the data is automatically monitored by you doctor from his iPhone or from a desktop computer in his office.

While the idea is not new (for example here and here), all these devices require some sort of external power source. Imagine however if these devices could work for months at a time, or can even be recharged via some sort of wireless recharging technology in the future

While it is unclear what Apple is aiming to produce with such technology, we cannot rule out the medical and health devices industry. This is an extremely b! ig industry and I am surprised that Apple has not used its cash hoard to get into this sector as of yet.

Nike (NKE) for example has already devolved FuelBand. I mean Apple is a devices and gadgets company, I see no reason why it has restricted its focus to smartphones alone.

Very recently Credit Suisse issued a report on the rise of the wearable devices and personal accessories industry, that use embedded sensors, displays and other digital technology. Credit Suisse said today this is a $3-$5 billion market, but it will balloon between $30 and $50 billion in the next 3-5 years from now.

If indeed this forecast proves to be correct (and I think it will), we are talking about a lot of money to be made. And guess what, the company that has the technology to power and make these devices communicate for very long periods of time, will probably end up taking a big piece of this market.

And while we know that Apple is pushing ahead and hiring people for the iWatch, I do not think that the iWatch is the only product it is working on, or the only product we will see from Apple in the wearable devices category.

With companies like Google (GOOG), Microsoft (MSFT), Samsung (SSNLF.PK) and even Dell (DELL) all working on making small wrist like devices and bracelets, at the end of the day, success will be determined by the power source and semiconductor components that use extremely low power.

Will Apple be one of these companies that will profit in this fast growing sector? The verdict is still out, however judging from Apple's latest round of acquisitions, I think it is at least preparing the ground work for making a wide variety of devices and gadgets, and medical devices cannot be ruled out.

And while I think Google will also surprise us in the gadget business in the future, I think only Apple has the potential to come out with a gadget that will rival the success of the iPhone.

And I am not talking about the iWatch, but something else that will be really revolution! ary and m! ake our lives better.

Source: Apple Has Many Aces Up Its Sleeve

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)