Our criticism of Apple (AAPL) and its CEO Tim Cook typically focuses on the fact that Apple does not move swiftly enough as it relates to new market opportunities. Financial Services and Healthcare are two such examples. Back in 2018 we wrote a well-received article entitled Apple Is Well-Positioned to Lead A Consumer-Driven Healthcare Revolution. Despite Apple’s massive balance sheet and operational focus, it would have made sense for Apple to have acquired a healthcare IT company to help accelerate its Healthcare effort. Cerner (CERN) and Epic (private), were two companies that we listed in our article as obvious acquisition targets for Apple given that the two companies had approximately 80% market share of the EMR (“electronic medical records”), market at that time. We advocated that Apple acquire Cerner given that Cerner was publicly-traded and therefore would be easier to perform due diligence on.
Apple partnered with both Cerner and Epic at the time our article was published, so why did we recommend that Apple acquire one or the other? Tighter product integrations is the primary reason. When you own an asset it is easier to influence the strategic direction of that asset versus when that asset exists outside of your four walls (i.e. a partnership). Technology partnerships are always less than optimal from an execution standpoint as neither company controls the other. Thus, if Company A is hell bent on making a partnership work yet Company B is less than enthusiastic, the outcome is doomed to disappoint Company A.
Cerner would have been a beautiful fit inside of Apple. Instead, Oracle (ORCL) agreed to acquire Cerner last year and received antitrust approval on June 1st 2022. Cerner will fit nicely on top of Oracle’s database business and will help Oracle compete versus the platform companies (Apple, Google, AWS, Microsoft), in the Healthcare IT space.