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Here's Apple's Next Big Innovation

Updated from 10:31 a.m. to include more information in the fifth paragraph.

NEW YORK (TheStreet) -- Courtesy of some absolutely incredible reporting by 9to5Mac's Mark Gurman, we've now learned what Apple (AAPL - Get Report) is working on next and what it will look like: Healthbook.

Healthbook, similar to Passbook, is an app that Apple is building on that will store all of your health and fitness related data in one place, as Apple makes its move into wearable technology, and looks to the health and fitness market as its next big opportunity.

Of the more notable features included in Healthbook (Gurman cautions that this could be for Apple's next mobile operating system, iOS 8, but could be pushed back or canceled entirely), it tracks steps taken and calories, as well as monitoring things like blood pressure, oxygen levels, sleep activity and even monitors your breathing. There are several other features included in the app, but these are some of the most important.

Whether Healthbook is released as part of iOS 8 or as part of a new hardware (iWatch) remains to be seen, but it's obvious that the company is moving into the health and fitness market, which could be a huge market for Apple, according to Morgan Stanley analyst Katy Huberty. "Our working assumption is that iWatch will largely be adopted as an accessory device and therefore sold into the existing customer base like the iPad rather than to new customers like the iPod or iPhone," Huberty wrote in Feb. research note about Apple. "Assuming an ASP of $299 and Apple customer base penetration rate similar to the iPad, we see up to $17.5B of revenue in the first 12 months compared to $12B for the iPad and $2.5B for the iPhone."

Must Read: Apple Is Not Building a TV, Or Maybe It Is

Apple is slowly moving into the health and fitness market, be it with the iWatch, HealthBook, or whatever else Apple has up its sleeve. It currently sells fitness-related products on its website and in Apple Retail Stores, including Nike Fuel Band, Jawbone products and others. Apple CEO Timothy D. Cook in fact wears a Nike Fuel Band, having commented in mid-2013 that Nike (NKE) did a great job with its product.

It's likely that Apple will use the M7 (or perhaps M8?) co-processor to obtain some of this data, which it unveiled as part of the iPhone 5s in Sept. 2013. The M7 detects motion data constantly. When Apple unveiled the new co-processor, I said it might be the most important part of the iPhone announcement, given all the rumors we'd heard about Apple moving into health and fitness.

It appears those rumors are true, based on Gurman's reporting. Now all we have to do is sit back and wait for either the most likely reveal date, Apple's Worldwide Developer Conference (WWDC) in June, or perhaps the unveiling of the iWatch. Only time will well on that, though.

--Written by Chris Ciaccia in New York

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