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Apple's quest to reinvent digital healthcare

The iPad, iPhone, and much-rumored iWatch are all part of Apple's plan to sell health and fitness monitoring tools and services to consumers and healthcare providers.

The iPad, iPhone, and iWatch all play in Apple's conquest of the healthcare business.

What will the secretive Apple do next to create a new and immensely profitable market for itself? That is the question for 2014, after several years of incremental innovation on its flagship products, the iPhone and iPad.

All the signs point to an entry into the very crowded smartwatch arena with the long-rumored iWatch. But how is the iWatch going to distinguish itself from the gaggle of smartwatches and fitness bands as the iPod, iPhone, and iPad did from antecedent MP3 players, cellphones, and tablets? Following the Apple tradition, the iWatch will likely be a combination of Patek Philippe and Swatch -- a fashionable, functional, and pricey companion to the iPhone and iPad, with unique materials and process engineering.

Designer Todd Hamilton envisions what an Apple iWatch might look like. Todd Hamilton

While a fashion-statement smartwatch could attract new customers to the iPhone and iOS ecosystem, the iWatch is part of something much bigger going on at Apple. In the 1980's Apple found its footing with desktop publishing and multimedia, and now Apple wants to make all of its mobile devices central to the digital healthcare revolution.

The company has an elite team working on wearables, with fashion designers, medical sensor wizards, sleep researchers, exercise physiologists, and fitness experts hired in recent months in its quest to redefine the smartwatch.

Given all the human capital assembled, Apple is creating a pervasive new platform with hardware and apps centered on health and fitness that cross over every Apple mobile device. Late last year, senior Apple executives met with directors at the United States Food and Drug Administration to discuss mobile medical applications.

Dentists are using tablets for dental records. Apple

According to 9to5 Mac, the next version of iOS will include Healthbook, an app that taps into the sensors on the iPhone, iPad, iWatch, and plug-in accessories for monitoring and storing health and fitness data. It could not only track steps, calories used, and other fitness statistics, but also heart rate, blood pressure, hydration levels , and other vital data.

With the FDA's blessing Apple's digital health initiative could tap into regulated markets. The big data collected and anonymized in Apple's cloud could aid health researchers. Perhaps even insurance companies, like the American Automobile Association for drivers with good records, could offer discounts to users of Apple's Healthbook app.

"Apple's business is simple: they make personal computers, small, medium and large. That's where the money is, that's what keeps them hard at work," said Jean Louis Gassée, an insightful Apple watcher and former executive at the company. "All the rest is the supporting cast, making the main product nicer, more useful and selling in higher volume and/or higher margins."

It seems that a broad focus on digital health fits that pattern of catalyzing more sales of Apple's increasingly smaller and sensitized personal computers. It's Apple's entry into Obamacare, born in the age of smartphones and the Internet, and brings a new meaning to AppleCare.