Analysis: AAPL SWKS UNH CI HUM

Which is the right way to view the stock of Apple (AAPL) ? The prism of some Japanese newspaper that said Apple's cutting iPhone supplier orders again, this time by 10%? Or is it from what COULD occur with the Apple ecosystem that will make it so we shouldn't be so granular.

Yesterday I walked away from my interview with Tim Cook, the CEO, certain as ever that you should own this 11 times earnings stock because I think the company is much bigger than a given story of an order cut or a shade down of numbers by Skyworks Solutions (SWKS) this morning, a forecast cut pretty much in-line with the Japanese report.

Am I just digging in my heels on a stock that just doesn't have what it takes? Has the sun set on what was the greatest wealth creator of any company when the stock traded north of a trillion dollars -  it's now only $713 billion- and I am holding on to it like an old lovey blankie that gave me comfort for so long?

No.

Let me tell you why. I was watching CNBC this morning and heard about the 10% percent cut to the cellphone orders, something that still represents more than 60% of sales so is therefore the only fulcrum that analysts seem to focus on. So, I figure, and I think ultimately I will be correct, that at some point today Apple's stock will be down on that regardless of what Tim told me. You can add a piece by Morgan Stanley's Katy Huberty, that talked about an accounting change that shows the service revenue stream growing slightly lower than many thought.

Or, more important, to return to watching the Apple story unfold this morning, after we got the news about the cellphone supplier slash, a man, Dr. Paul Friedman, the Mayo Clinic's chairman of the department of cardiovascular medicine, came on and talked about how Mayo now has neural networks that can predict heart failure by examining an EKG.

Friedman said that, according to their data, there are seven million people who are at risk of dying of heart failure that could be avoided if their neural network breakthrough could be married to the results of an EKG.

How do you get that EKG? Well, you can go to the doctor and request one. I think that, sadly, is much too much to ask. Or, as Dr. Friedman said, you can get a smart watch that has an EKG app that can give you the read out.

And there, right there, in a span of 10 minutes, is the conundrum I find with Apple. What Dr. Friedman did NOT say is you can get an Apple watch that does an incredibly accurate EKG - better than you can get at the doctor's office because it is a better readout given its constant rest and work and run record that comes naturally because it is on your wrist. The doctor's readout ideally comes after you have done some sort of heightened activity. The watch is much more constant and efficient.

Frankly, I found it insane that Friedman didn't say "go buy an Apple watch; we can save seven million lives if you download the app."

But that's not his job. His job is to come up with the best way to read the EKG and his hospital has done so. What's needed is some sort of "handshake" between the Mayo's and the Apple's.

Why isn't there one?

Wrong question.

When will there be one is the better way to look at it. When there is one I think we will say "sure, there's an issue with how many cellphones are being made right now, but the orders for the watch will offset that." Why shouldn't it be like that. It's not like there are 7 million people who should go buy the watch. It's that there are 318 million Americans who should buy the watch to be sure they aren't part of the 7 million or if they are they can be treated effectively.

If you buy the watch, of course you buy the cellphone. If you buy the cellphone you are part of the ecosystem. If you are part of the ecosystem you will be part of the 1.3 billion people who can avail themselves - or pay for the services rendered with the ecosystem.

The problem, though, is right in front of us. Tim Cook tells us what the watch can do and how many lives it has saved. Dr. Friedman says you need the EKG from your watch, but he can't steer to the watch that works.

What's needed?

A sponsor or sponsors. You need United Health (UNH) , Aetna, Cigna (CI) and Humana (HUM) to make the linkage. But they haven't. You need the FDA to say the watch is needed. But it won't.

All we have is Apple saying it. You get that handshake you get a new narrative. Until then, though, it is all about cellphone order cuts.

Of course it's not just Mayo and EKG. There are tons of other uses. It's all about that stream.

You know what's really ridiculous? When the cellphone becomes less than 50% of the pie - even if it is because the orders are down!! -then we will care about the handshake. Until then? The orders control and Apple's stock will be mired at this level until the crossover that will ultimately occur, we just don't know when.