Updated from 9:06 a.m. to include revenue assumptions on iWatch from Morgan Stanley.
NEW YORK (TheStreet) -- Apple (AAPL - Get Report) unveiled its latest iPhone ad last night, targeted at health and fitness apps, showcasing all the tasks the iPhone can perform. Given the size of the health and fitness market now, it's clear investors are seeing this as the right move.
The latest ad, which shows people swimming, running, playing golf, lifting weights and other activities, shows that Apple is trying to demonstrate that its device has a multitude of use cases, particularly thanks to the App Store, of which there have been over 75 billion downloads and counting.
According to a report from research firm Research2Guidance, there are now more than 100,000 dedicated health and fitness apps on Apple's iOS and Google's (GOOG) Android platform, with the projected revenue to be $26 billion by the end of 2017. This is up from $2.4 billion this year, so it's clear the segment is exploding. Though much of the revenue is concentrated at the top with the top 5% of app publishers seeing more than 500,000 downloads, making more than $1 million a year in sales.The devices that had the most connections to APIs (Application programming interfaces) were MyFitnessPal, MapMyFitness, and EveryMove, all around 30 instances. The devices that connected to the most apps had Withings, which saw 90 app connections, and Wahoo, which connected to 70, both featured in the new iPhone ad. Also included in the ad are the Misfit Shine waterproof ring activity, the Zepp golf swing analyzer, as well as several other apps dedicated towards staying in shape.
Apple's decision to announce its Health app at its Worldwide Developer Conference shows that Apple is taking the health and fitness market seriously, both from a software perspective and, eventually, a hardware perspective, as the company gets ready to launch its long-awaited iWatch, later this year. "With HealthKit and HomeKit added to iOS 8, we believe these software features support Apple's potential hardware move into wearables such as an iWatch," noted Canaccord Genuity analyst T. Michael Walkley in a research note, following WWDC.
WATCH: More tech videos on TheStreet TV