GE Healthcare

GE Healthcare ($GE)
CEO: John Flannery
Based: Little Chalfont, U.K.
2015 sales: $9.5 billion
2014 sales: $9.8 billion
Change: -4%

The triumvirate of imaging giants--Siemens, Philips and GE--are all struggling to figure out how to move the needle on their massive revenues. They're big, enormous in fact, but they aren't growing very fast. That's the bad news. But what could be the good news is that these conglomerates are in the midst of a seismic shift for medical imaging.

Medical imaging is at the forefront of big data in healthcare, with a number of major deals happening in the past year as imaging companies struggle to get all their massive amounts of data in the cloud and more easily accessible.

Artificial intelligence and machine learning are coming up next to make sense of all that data. The idea is to offer radiologists and physicians more analytical context: to predigest some of the incomprehensibly large amount of data that's available to them to supplement, not supplant, their talents. Some of the first applications are starting to emerge from big players like IBM Watson--and from tiny startups such as Arterys.

GE made a big splash by partnering with cardiac startup Arterys before it had even secured a Series A. It's incorporating Arterys' machine-learning software into its existing MRIs, allowing it to leap forward rapidly with a tiny investment.

But GE Healthcare is going to have to do a lot more to secure its future in the imaging business. Not only are medical images at the heart of the big data developments stemming from AI and machine learning, but imaging is necessarily needed to be understood more in the context of the vast amounts of genomic data that's rapidly becoming available, particularly in cancer.

If GE--and the other imaging conglomerates--are unable to get ahead of these trends, it seems unlikely that they will be able to defend their market positions in the long term.

GE Chairman and CEO Jeff Immelt wasn't particularly optimistic about Healthcare's near-term prospects.

"Healthcare in 2016, this should be low to mid-single digit organic revenue grower with margin enhancement, that's what investors should expect in healthcare," he said on the year-end call.

-- Stacy Lawrence (email | Twitter)

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