These 3 Tech Titans Could Revolutionize Health Care

Sony, Samsung, and Google are merging technology and medicine into a fascinating new business with revolutionary implications.

Jan 28, 2014 at 2:00PM

When most people think of Sony (NYSE:SNE), Samsung Electronics (NASDAQOTH:SSNLF), or Google (NASDAQ:GOOGL), they think of video games, smartphones, tablets, or search engines. These days, however, these tech giants are taking huge steps to expand their technological capabilities beyond the everyday consumer.

Sony, Samsung, and Google have all recently made unexpected moves into the health care industry -- a high-growth market where technology is merging symbiotically with life sciences and medicine.

Let's take a closer look at some fascinating ways that these three companies could revolutionize health care with their new investments.

Sony launches a genome information platform
Sony, the Japanese conglomerate best known for its electronics, video games, and media businesses, is now interested in genome sequencing.

Genome research, which analyzes human genetic data in comparison to other medical or scientific data, is widely believed to be the key to identifying the origins of diseases and developing personalized treatments for patients.

On January 23, Sony announced a partnership with Japanese medical portal M3 and life sciences giant Illumina (NASDAQ:ILMN) to launch a genome information company, known as P5, in Japan by the end of February. Sony and M3 will establish P5, with Illumina acting as a minority investor.

The goal of P5 is to provide a genome analysis service to medical and research institutions across Japan, with a long-term goal of the creation of personalized medicine and health care services.

The establishment of P5 comes at a time when the costs of human genome sequencing are dropping substantially -- earlier this month, Illumina broke the "genome sound barrier" with a new machine that can sequence the entire human genome for $1,000. To put that into perspective, the same process would have cost $250,000 a decade ago, and the process on current high-end machines still costs $3,000 to $5,000. 


Illumina's HiSeq X Ten system can sequence an entire human genome for $1,000. Source: Illumina.

Since Sony has partnered with M3, it's assumed that P5 will store the collected data in the cloud, which means that individual patients could eventually access their genetic records online.

Sony CEO Tadashi Saito stated that Sony was positioning the medical business as one of the company's "key growth pillars," which would be a huge change from the status quo. Today, Sony's tiny medical business is tucked away in its imaging equipment segment (including cameras), which accounts for 10% of its total revenue.

Samsung's quiet evolution into a medical giant
South Korean tech giant Samsung Electronics has similar goals, with an ambitious plan to become of the world's largest medical equipment companies by 2020.

Samsung forecast $400 billion in annual revenue by 2020, with $10 billion (2.5%) of its top line eventually being generated by medical devices. The company's big push started with its acquisition of ultrasound maker Medison in 2010, followed by health care equipment maker Nexus in 2011 and the medical imaging company NeuroLogica in 2013. All this inorganic growth culminated in the launch of GEO, Samsung's new line of digital radiology and in-vitro diagnostic equipment.

Samsung's medical device business is still relatively small -- it generated $300 million in sales in fiscal 2012, with an expectation for sales of $500 million in fiscal 2013. However, Samsung's growth plans could put it on a collision course with the Goliaths of the field -- General Electric, Koninklijke Philips, and Siemens -- which generated combined sales of nearly $50 billion in fiscal 2012.  

Samsung Electronics also owns a 40% stake in Samsung BioLogics -- a separate company that intends to become "a world leader in biologics development and manufacturing." Biologics are medicines synthesized biologically (vaccines, antibodies, proteins) and not chemically. They include some of the best-selling blockbuster drugs today, such as AbbVie's Humira, Johnson & Johnson and Merck's Remicade, and Amgen's Enbrel.

Last October, Roche signed a manufacturing agreement with Samsung Biologics to manufacture Roche's proprietary commercial biologic medicines in Incheon, South Korea. These ambitious investments in medical equipment and biologics put Samsung Electronics in a strong position to shake up the health care industry, as it has done with smartphones and tablets over the past five years.

Google's ambitious blitz on medical devices and medicine
Last but definitely not least, search giant Google's ambitious investments in health care could shake up the industry. Google Glass, which is scheduled to be released in April, has already been considered a next-generation tool for physicians, thanks to its onboard camera and Internet connectivity. Several major companies, such as Qualcomm and Phillips, are experimenting with different medical applications for Google Glass in idea incubators.

Hand Holding Zoomed In

The Google smart contact lens. Source: Google.

Google also recently announced that it was developing a smart contact lens for diabetics as a replacement for the daily pinpricks necessary for glucose monitoring. Google's approach is completely new -- it tests glucose levels through tears. If the project is successful, the lens could synchronize to smartphones or other devices, similar to newer glucose monitors like Sanofi's iBGStar, and render painful pinpricks obsolete.

In the biotech field, Google created Calico (California Life Company) last September. Calico is headed by former Genentech (now a Roche subsidiary) CEO Arthur Levinson. The company's goals are incredibly ambitious, with an ultimate goal to extend the average human lifespan by 20 to 100 years and treat age-related diseases such as Alzheimer's, cancer, and heart disease.

Google clearly isn't expanding into the health care industry because of an immediate need for profit, since its core revenue is still generated by search advertising. Yet that's what makes Google's efforts all the more fascinating. With nearly $55 billion in cash and equivalents, the sky's the limit for Google's medical ambitions.

The Foolish takeaway
Sony, Samsung, and Google only represent three companies benefiting from the convergence of the tech and medical industries could revolutionize the health-care industry.

With the increased use of medical portals, smartphones, and tablets in hospitals, it's likely that other tech companies, traditionally associated with consumer or business products, will also expand into the health-care market as well. When these top minds in tech and health care pool their efforts together, medical devices and biotechnology could improve the lives of patients worldwide.

Want to learn more about the tech and health care industries?
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Fool contributor Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Google, Illumina, and Johnson & Johnson. It owns shares of General Electric, Google, Johnson & Johnson, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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