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Signify Premium Insight: GE Dreams Big with HealthCare IPO

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Last month GE HealthCare offered further details of its upcoming IPO with the release of its Form 10 registration statement. The document offers an overview of the vendor’s plans for the business and the strategy it will adopt after it lists publicly as a separate entity. After the spinoff GE HealthCare will be comprised of four segments: Imaging, Ultrasound, Patient Care Solutions and Pharmaceutical Diagnostics. With these segments it hopes to continue along its global path and capitalise on the current macro health trends.

This document is illuminating, offering a level of detail not before seen while GE HealthCare was part of the broader conglomerate. The Form 10 statement also offers hints as to how transformative the spin off will ultimately be to GE HealthCare.

The Signify View

There are many who will have first read the news of GE HealthCare’s spinoff, when it was first announced in November 2021, and thought to themselves ‘about time’. Before the move was announced, back before the ‘C’ of HealthCare was capitalised, there was a sense that being part of the broader GE umbrella was constraining the potential of the healthcare giant. It could, as an independent company be more focused and reactive, only concerned about the changing dynamics of the global healthtech markets, and not having to fret over the ramifications of developing trends in segments over which it has no control.

More substantially, in addition to being freed from this burden of concern, GE HealthCare will also be freed from the financial burden of supporting GE’s other businesses. In the past, the profits that have been hard won by GE HealthCare have been subsumed by the broader GE conglomerate to be frequently spent elsewhere in the wider business. Such a model meant that GE HealthCare had to adopt a more risk averse attitude when it came to investing in its own business. Freed from this obligation, one of the most exciting prospects for the vendor, and one which is mentioned throughout the Form 10, is the ability to become more acquisitive. GE HealthCare has made some moves of late, in imaging in 2020 and 2021 the vendor bought out Prismatic Sensors and BK Medical respectively. The former to secure supply of advanced sensor technologies for GE’s upcoming photon-counting CT system, and the latter to bolster GE’s already comprehensive ultrasound offering.

While sensible, these acquisitions were not strategically transformative in the way that Siemens Healthineers’ acquisition of Varian, Philips’ acquisition of Carestream or Canon’s acquisition of Toshiba Medical Systems is. GE’s acquisitions supplement and improve existing revenue streams rather than opening entirely new opportunities. Freed from the broader GE’s oversight, such significant acquisitions are now a possibility.

As detailed in the Form 10, post-IPO GE HealtCare’s business will be comprised of the below segments:

  • Imaging: portfolio of medical imaging solutions including CT, MR, molecular imaging, X-ray, women’s health, image-guided therapies, enterprise imaging software, service capabilities, and digital solutions
  • Ultrasound: ultrasound consoles and probes, handheld devices, intraoperative imaging systems, visualisation software, service capabilities, and digital solutions
  • Patient Care Solutions (PCS): monitoring, anaesthesia and respiratory care, maternal infant care, and diagnostic cardiology solutions, as well as consumables, service capabilities, and digital solutions
  • Pharmaceutical Diagnostics (PDx): imaging agents that include contrast media and radiopharmaceuticals that enhance diagnostic images

Buying Better?

GE HealthCare can now embark on such endeavours, but whether it should is an entirely different matter. This largely depends on its chosen target for acquisition. There are opportunities to make profound, if not transformative change through the acquisition of companies that plug holes in its portfolio, and better allow GE to offer solutions that address disease states and specific clinical care pathways. Such deals could make sizable progress in helping GE HealthCare achieve its headline ambition of focusing on precision medicine.

While potentially on a smaller scale, such moves would mirror some the sector’s most successful acquisitions, in which vendors have acquired companies which operate in allied areas where there are clear synergistic advantages to the combination, but with very little duplication of capability. The acquisition ideally adds something substantive and new, which sits snugly alongside existent business.

This suggests one of the pitfalls that GE HealthCare would do well to avoid; looking for a quick win by making an striking acquisition, but instead of quickly adding a standout new business and revenue stream, simply lumbering itself with significant challenges in integration and execution.

One area where this risk is particularly apparent is with regards to GE HealthCare’s digital play. In the Form 10 filing, the digital solutions were present across all business’ segments, rather than being established as a vertical of its own, hinting at how digitisation is considered by GE, as more of a “facilitator” in each business unit, than a product in its own right. While GE may be tempted to make a grand acquisition to address these limitations, such a move could offer limited benefits. GE HealthCare, after all, already harbours significant digital capability, and any sizable acquisition is likely to confuse matters and stymie successful integration and delivery, rather than immediately strengthening the company’s offering.

This is particularly pertinent given that digital solutions is one area where GE holds considerable, potential. It is a segment that brought in almost $1.2bn in 2021, a large proportion of which was derived from its imaging informatics  offering. It has worked in recent years to offer a far wider brace of tools however, with its Edison data aggregation platform and Command Centre product, for example, representing some of the tools that GE hopes will add more value across the business. Such digital tools will become increasingly critical to GE as it embarks on its drive toward a more comprehensive precision medicine offering. While incremental improvements of image quality and the use of AI to extract more data will have an impact, of far greater significance is the ability to bring data from various sources together, connecting disparate streams to offer a more complete view of an individual patient.

Digital Demands

However, at present many tools out of GE’s 200-application-strong digital portfolio are more limited in scope. Many of the tools are focused within single units or businesses, and have not made the rapid progress toward a more connected, centralised digital platform play that may have been hoped. Similarly, it also appears that GE is also facing some turbulence with the legacy components of its digital portfolio, with deals being lost and even notable scaling-back in  some markets. Both of these challenges will not easily be solved, but the financial flexibility offered by the IPO could well leave greater levels of investment for such products. With such investment, GE could expand on the strengths in its portfolio such as Command Center and use them to better bridge the individual silos.

Such a move could be particularly important amidst the growing trend for the decoupling of software and modality. While major modality vendors are making progress on the operational workflow and edge AI sides, for example, the core image management platform is now frequently being handled by an independent specialist vendor. Post-IPO investment could help stem this transition and better allow GE HealthCare to capitalise on its enormous installed base. GE HealthCare already derives most of its recurring revenues, which make up around 50% of all revenues, from its service business. Growing its digital business will bolster this recurring revenue further; an important consideration given investors’ appetites for such ongoing incomes.

What’s more, greater investment in digital capability will help GE HealthCare towards one of its other primary ambitions: margin expansion. Focus on these higher margin products also enables GE to capitalise on the high growth potential of digital tools, as well as the recurring revenues they offer. A trifecta of advantages that will be music to the ears of GE’s potential investors, and a nice complement to investment in other high margin parts of the business, such as Ultrasound.

In a similar vein, this and other investment in innovation will likely help GE HealthCare secure another key source of recurring revenues: managed service agreements with providers. Being seen as an innovator is crucial in convincing providers to enter into an extended contract, after all, a vendor is not judged solely on the competitiveness of its products available today, but also on the expected competitiveness of its products 10 or 15 years into the future. Beyond offering sustainable revenues, such partnerships also help maintain a vendors’ technical excellence. Further, vendors are not able to offer truly useful products, without first understanding what providers truly need. To understand this, close relationships with providers must be earned and maintained.

Flying Solo

GE HealthCare’s upcoming IPO will not suddenly solve all of the business’ challenges, indeed it will, in some cases, bring barriers to the company, forcing it to be more open about the particulars of its operations and removing some of the security that comes from being part of such an enormous conglomerate.

This is not expected, nor is it necessary. Despite the challenges ahead for GE, it is still among the leaders, if not the leader in many of the markets in which it operates. While there are parallels to similar moves from other vendors such as Siemens Healthineers and Philips, which were also once part of broader conglomerates, the motivations and possibilities are not directly comparable, and so it is unhelpful to try to divine its future by looking at the success and travails of those vendors. This is particularly true given GE’s comparatively greater presence in emerging markets. It is a strategy which today, amidst global economic turbulence, gives it greater exposure to risk than would have been the case a decade ago when the ambition was first conceived.

Instead, what GE HealthCare must do is focus on execution. The IPO will give it greater flexibility and financial control, enabling it, for arguably the first time, to truly chart its own course and grow into the vendor it alone aspires to be. Whether this means myopically focusing on several areas in which it aims for technical leadership, or capitalising on its strength in digital tools to become a more valuable partner to providers, or jumping headfirst into precision medicine and pin its entire strategy around that, is entirely up to GE.

All of these are possible. Now there are no excuses, and nowhere to hide from scrutiny, GE HealthCare must now not only share its vision with investors, but deliver on it as well.

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Signify Premium Insight: Vendor Financials Roundup – The Health of the Imaging Sector Q1 2022

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

One glance at a newspaper leaves no doubt about the volatility of the world’s economic health. Every day, troubling stories adorn the front pages: shocking rates of inflation, dramatic retreats for some blue-chip stocks, soaring energy costs, the ongoing defence of Ukraine from Russian invasion, continuing coronavirus restrictions in China and extended disruption to chip production and supply chains amongst others. Reading these headlines, it would be natural to assume that medical imaging vendors will be feeling bearish, shouldering the burden of a hard start to the year and preparing to dig their heels in for the long, fallow months ahead.

This assumption, would however, be incorrect. While vendors have been unable to completely avoid these global headwinds, they have, as illustrated in their first quarter financials, largely been able to mitigate some of these challenges.

The Signify View

This is true, of, for example, the supply chain headaches that have been wreaked on the world primarily by the turbulence of the coronavirus pandemic and countries’ responses to it. Although these supply chain challenges have been noted by almost every vendor in their quarterly results, they have not significantly impacted revenues, with most vendors still showing year on year growth. Siemens Healthineers, for example, noted a 150 basis point headwind compared to a year earlier, up from around 100 bps in the previous quarter. However, in the vendor’s Imaging Segment, this translated to an adjusted EBIT margin of 20.2%, down from 21.1% a year earlier, but still a strong figure, particularly given the 10.7% increase in revenue.

This pattern was echoed elsewhere. GE for example saw comparative growth in its Healthcare business of 2%, although profit margin fell 260 bps to 13.6%. Philips’ also saw its EBITDA margin in its Diagnosis & Treatment segment fall, to 9.5% from 12.3% a year earlier, although the Dutch vendor didn’t enjoy the bounce in revenues, which fell 2% year on year.

How vendors have been able to cope with these difficulties in logistics and procurement has been affected by several factors. Some of these are reliant on the vendor’s management of the difficulties such as identifying new suppliers, modifying stock levels and even redesigning or reconfiguring hardware to avoid overreliance on particularly in-demand components and materials. These opportunities for leaner processes will not be able to stave off shortages indefinitely and will require time and effort to implement, but they will help mitigate difficulties in the near term, while, in many cases, also leaving businesses more efficient for the future.

Mixed Risks

Vendors have less control over other factors. One of the key differentiators are the product mixes that imaging companies entered into this period with. Vendors who are more reliant on high volume, high-profit modalities such as ultrasound and clinical care devices will have been more drastically impacted than those skewing towards lower volume, higher value modalities. This is one of the reasons for the weaker performance of Philips compared to some of its peers.

These troubles have been particularly pronounced to vendors with greater exposure to certain markets. Canon, Konica Minolta and Shimadzu, for instance, are most reliant on their home market of Japan. Canon’s Medical segment saw total sales decrease by 5%, while income before taxes plunged 45.2%. This was largely down to supplementary government spending a year earlier, diminishing provider appetite in 2022, a factor that will have been keenly felt by all Japan-centric vendors.

Of course, pressure in foreign markets will have also hit other vendors’ revenues. Group revenues for Siemens Healthineers in the quarter, for example, fell 10% on a comparable basis in China as the country continued to face strict Covid 19 regulations. It’s a similar story for GE, which also recognised the challenges the region presents in its own announcements. However, unlike the Japanese vendors, Siemens Healthineers, GE Healthcare, and others with exposure to a greater range of international markets were better able to withstand these regional challenges. This highlights a key objective for Canon and Fujifilm; namely, reducing their reliance on a single market. The vendors are already working towards such ambitions, and it is no way an easy objective, but these results highlight its importance. For example, Canon has signalled that the USA is a key growth market for the company, and it is currently overhauling its sales organisation and expanding its sales force.

Inflated Concerns

Another of the key economic concerns for many industries is the spiralling inflation that, after many years of languishing at or near record lows, has leapt dramatically. As with any broad economic change there are countless subtle and often unknowable impacts. However, in this case there is good reason to think that the increased inflation could have a positive impact for many of the large medical imaging vendors.

One of the key trends in medical imaging has been improving the efficiency of the acquisition and analysis of diagnostic images. Some products and technologies have enjoyed success on the back of this trend, with the increased requirement for some types of procedures caused by the Covid 19 pandemic, and the enormous backlog of patients it created particularly driving adoption. The dramatic rise in inflation, and in particular the increase in wages demanded by healthcare professionals means that productivity is once again in the spotlight. This emphasis is expected to drive growth across vendors’ product ranges as providers seek to add capacity. This growth could be particularly noticeable for top-tier systems, which providers could well be more inclined to consider as their features, which help increase productivity, could offset their higher price tag. Such inflationary challenges could, therefore, herald a modest, but noticeable bump for modality vendors, and in particular, those whose portfolios skew towards particularly time-consuming exam times such as MR and CT.

This effect will be most noticeable in acute care in private markets, notably the US, where wage inflation is more significant. In single-payer markets, where wage increases are likely to be more constrained by government policy, the demand for new systems and tools to improve efficiency and automation will be more muted.

Favouring the Familiar

These broader economic and geopolitical challenges bring other reasons for cautious optimism among the largest medical imaging vendors. In times of geopolitical stability and bullish economic outlooks, there is a greater appetite for risk among many cohorts including financial investors and healthcare providers. This readily available capital helps young disruptive companies to grow, while the boldness of providers means that they are more likely to invest in the solutions touted by these young disruptors, potentially at the expense of other longer established vendors. In times such as the present, where economic uncertainty haunts procurement discussions, providers are unlikely to turn their back on a trusted supplier in favour of one that is unproven. This preference for the familiar will provide solace to large imaging vendors, which could have otherwise been threatened in key markets by disruptive start-ups, or quickly growing foreign players such as United Imaging.

Vendors can capitalise on providers’ preference for the familiar even further and look to bolster their service deals. Providers will be increasingly open to more integrated managed service partnerships, with such deals offering them predictability from a procurement and cost perspective, but also the ability to derive more efficiencies through the fleet management and operational workflow advantages that such partnerships can unlock. In these tougher economic times, when many providers are inundated with procedures postponed by Covid, the importance of minimising downtime, and extracting maximum value from equipment and personnel is increased, all of which can be gained through managed service partnerships.

Budgeting for Service

Vendors can also use the agreements to increasingly embed themselves at providers. By offering more comprehensive packages, of which service plays an ever-larger part, vendors can look to benefit from a hospital’s broader operational budget, a fund far greater than the radiology budgets which they would have historically looked to target.

Vendors can also look to strengthen their ties to providers and effectively lock them in for longer-term deals. As well as offering efficiency and operational improvements, large vendors will also be able to leverage their size to offer flexible payment plans. Offering early upgrades or effectively financing equipment purchases for a hospital, as part of longer-term deals.

This opportunistic thinking has been seized upon by many vendors, several of which have raised their guidance for the year, in part on the back of continuing strong order intake, which, for many vendors, continues to provide support and reassurance even given some of the immediate challenges they face.

More broadly too, the largest medical imaging vendors should feel reassured by the latest quarterly figures even as the world economy looks to be stalling. They will no doubt face some challenges, and they must continue to overcome some obstacles, but that is the nature of business. In the longer term, this volatility is an opportunity which they are best placed to benefit from. They, unlike many of their smaller peers, have the scale, diversity and cash reserves to persevere and gain ground while others falter. This may mean sacrifices in the near term, accepting lower margins or sacrificing niche opportunities in the name of focus, but, if they can hold their nerve and deliver on their promises, they could position themselves perfectly to capitalise when the winds change.

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Signify Premium Insight: The Fate of the Five

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As the world emerges from the clutches of the coronavirus pandemic, the turbulence that has characterised the last few years has lingered. From supply chain headaches and shortages of critical components to the inevitable economic repercussions caused by Russia’s barbaric assault on Ukraine, stability is in short supply. While less dramatic, the medical imaging markets are also in a period of flux. Some vendors have enjoyed unexpected windfalls from Covid-related products, while others have seen sales, at times, decimated due to restrictions at providers. Furthermore, medical imaging sits on the cusp of the widespread adoption of several hugely impactful technologies, including machine learning, cloud computing and data-driven healthcare.

How vendors respond to these circumstances could define their fortunes for years to come; below is our assessment of where each of the five largest medical imaging vendors (GE Healthcare, Siemens Healthineers, Philips, Fujifilm and Canon) stand, and where their opportunities lie.

GE Healthcare

Portfolio & Portfolio Integration

From an imaging modality perspective, GE has among the broadest product portfolio of any of the top five vendors, with strength across a broad range and the ability to sell into both the wards of large academics and integrated networks, and at lower tiers and into emerging economies. Unlike some of its peers, GE has no single clinical or product sectors where it dominates, or offers products of unique quality, but as an accomplished generalist can meet the needs of a wide range of customers.

The vendor’s digital strategy, meanwhile, is less robust. While there is still the breadth of capability offered, and good coverage of the core imaging IT products, GE’s success in the integration of these separate products has been less successful. The vendor has increasingly recognised this issue, as evidenced by the release of products such as the enterprise imaging-focused Edison True PACS software, but this response has been relatively sluggish. The vendor has held a large share of the market for a long time, but that share is slowly being eroded. Whether GE can stem this customer leakage is dependent on how well it can deliver on the newer, better connected, data-driven facets of imaging IT. If it is unsuccessful, these weaknesses, which will become increasingly more important, will cause customers to look elsewhere, a concern for the division given it plans to be spun-out in 2023.

New Digital Technologies

AI is set to be among the most transformative technologies in medical imaging in the coming years, and GE is treating it as such. The vendor has taken a centralised approach to AI development, using a common team and platform (Edison AI) to efficiently deliver useful AI tools to the different modality departments. This has meant it has focused less on creating stand-alone AI products per se, but instead has been able to efficiently and effectively offer AI functionality to all of GE’s imaging modality teams, while also leveraging its strong position and channel in Advanced Visualisation software.​ The company was also early to market with a radiology AI platform, Edison Open AI Orchestrator, to support the deployment of native and third-party AI applications. ​

Another of the rising trends in medical imaging and the broader healthcare sector is the adoption of cloud capability. In this regard, GE is performing very similarly to its peers in that it is offering cloud-enabled products, but does not offer comprehensive cloud-native solutions. At present this has not hindered GE Healthcare. While technological capability is one driver for cloud adoption, business model flexibility is at present a more significant driver. As such, GE, like its peers, has, for the most part been able to meet customer needs without reverting to cloud technologies. That said, recent cloud-native releases such as Edison True PACS highlight the vendor’s cloud-focused approach, which potentially gives it the edge over some of its direct competitors.

Recent Performance

As highlighted in recent Insights assessing vendors’ financial performances, GE Healthcare has arguably been adversely affected by industry-wide challenges to a greater degree than its peers. Operationally, factors such as the supply chain disruption has been more challenging for GE compared to the likes of Siemens and Philips. GE Healthcare is also more exposed to emerging markets than several of its peers. Markets which could become more challenging as the repercussions of the Covid pandemic continue to bite.


GE Healthcare is, all things considered, in good shape. It has competency across the board and scale to ride out the current headwinds. The vendor does have its weaknesses, it has gaps in its therapy range compared to Philips, and cannot match Siemens’ Varian-based oncology offering, for example. It must acknowledge these weaknesses and act accordingly. That could manifest as acquisitions to improve its digital integration or therapy offerings, greater focus on the central AI platforms that connect the predominantly distinct tools or recalculate supply routes and logistics strategy to minimise the impact of disruption – an area where the vendor has lost ground to its peers.

More pertinently, GE must continue to push forward with its longer-term aims, despite the day-to-day challenges that are impacting the medical imaging market. As well as needing to continue to integrate its digital offering to keep customers from bleeding away and invest in its AI and cloud products to ensure it remains a leader rather than a follower. The vendor also will need to navigate the complications of a spin off from the wider GE conglomerate and successfully integrate BK Medical, the fruit of a recent acquisition, into its fold. Managing these priorities will prove difficult, opening itself to bold gambits from competitors who see a distracted rival. But, over the long term, the fruits of this effort will render it a nimbler outfit, with capability among the broadest out there and the might to seal deals of any size whenever the opportunity presents itself.

Siemens Healthineers

Portfolio & Portfolio Integration

Compared to some of its competitors, Siemens Healthineers has some areas within its imaging portfolio which are not performing as strongly as the wider business. Its ultrasound business, for example, has a reasonably broad range of products, and reasonable market share, but has been losing ground for some years. Signify Research’s latest Ultrasound Equipment – World Market report highlights that the vendor had, in 2020, actually lost market share in its key radiology/general imaging and cardiology markets.

Despite this, however, Siemens has both a wide-ranging portfolio and is amongst the pinnacle of the market when it comes to the advanced imaging modalities. As well as driving forward with new technologies, having been the first to commercially offer a photo-counting CT system, the vendor is also adept at innovating further down product line ups to create and capture market share, with its recently MAGNETOM Free.Star designed to bring MRI capability to new locations.

This modality focus has, however, meant that its core imaging IT software has been slow to meet the clear trend of enterprise imaging consolidation . This has been apparent in several regions, with North America a particularly challenging market for the German vendor. More recently, however, Siemens seems to have identified and acknowledged this weakness, and has delivered several products which not only bolster the vendor’s capability (it holds strong global share in Advanced Visualisation) but brings it together into a more integrated offering. This has been effective in multiple areas, but progress in workflow and operational efficiency, have been particularly well-received.

New Digital Technologies

Siemens Healthineers sits alongside GE as one of the vendors with the most advanced native AI offering. Unlike GE however, Siemens has taken a different approach, focusing first on the common frameworks, such as AI Rad Companion, into which further capability will be able to grow. This more integrated approach contrasts with other vendors which, for the most part, have adopted a platform plus marketplace strategy. Siemens has more closely integrated its algorithms into its broader platforms, which, for the large imaging vendors such as Siemens, appears at present to be the strategy which is delivering the most promising results.

Despite Siemens’ strategic differentiation when it comes to AI, the market is not yet mature enough for this approach to have a significant impact on sales. However, as AI use becomes more integral to medical imaging workflows, Siemens’ strategy could pay dividends.

Recent Performance

Siemens Healthineers has arguably been the strongest performer over the past year. While it has, like other vendors been affected by supply chain issues and chip shortages leading to the sacrifice of some margin in its latest quarter, it has also managed to maintain revenues and growth.

Additionally, Siemens Healthineers has also been among the vendors that have been keenest to create and nurture managed partnerships. Such partnerships have allowed Siemens to both protect market share and increase the portion of revenues which are taken on a recurring basis. In doing so, Siemens is favourably positioned to weather difficult conditions.

Further, while not directly related to imaging, Siemens Healthineers has also benefitted from what is effectively a Covid windfall, with its antigen testing bringing a one-off cash boost to the vendor and lining its coffers in readiness for offensive or defensive action.


Siemens Healthineers is going into 2022 in the best shape of any of the leading medical imaging vendors, with a slight reduction in margin the only real indicator of difficult times. Siemens also has some aces up its sleeve for the future. As time passes the vendor’s acquisition of Varian is increasingly proving its worth. With ever-increasing requirement for cancer care and Siemens’ ability to join up the diagnostic and therapeutic sides of oncology this advance is set to continue ever more effectively. This clinical integration also puts Siemens in a unique position, with no other vendor yet managing to join diagnostic imaging and therapy in quite the same way.

With its windfall from antigen tests, Siemens Healthineers is also in a strong position to make additional acquisitions. As has been achieved with Varian and to a lesser extent Medicalis, Siemens could look to bolster its offering with another sizable acquisition, further broadening the capability it can offer customers.

There are challenges; development of its digital offering and the march towards a more complete enterprise imaging solution needs to be a priority, but otherwise, Siemens Healthineers is looking strong.


Portfolio & Portfolio Integration

Philips has a full portfolio across the modalities, with everything from handheld ultrasound to MRI available from the vendor. The only significant concession it does make to any of its peers is in photon-counting CT. Philips does offer spectral CT, a tool of a similarly premium status, but at present it doesn’t yet offer commercially an alternative to Siemens’ latest innovation. The photon-counting CT market is still very small, so Philips is unlikely to miss out in the immediate future, but it will become more significant, highlighting the importance of Philips successfully commercialising its own photon-counting CT technology. For some categories, such as mammography, Philips has essentially relied on partnerships to fill its range, but for any gaps in an MRI or CT line-up, such a strategy would not fly with customers.

Unlike some of its peers such as GE Healthcare and Fujifilm, which are more generalist in their approach, Philips has worked to offer excellence in several key areas including cardiology and interventional imaging, while still offering a broad portfolio in other areas. These are set to be growth drivers over coming years, so the vendor is well placed in that regard.

Things are less rosy on the software side. While it has all the important pieces, and strength in some key areas such as operational workflow, the integration of disparate parts is proving difficult. This appears to be particularly true with regards to its Carestream acquisition. While the acquisition brought improved technology to Philips, the integration has taken longer than originally anticipated, suggesting that some expectations for the technology have been either been unmet or were more complex to architect than expected. While it seems Philips is emerging out of the other side of this process based on recent product announcements, whether customers have kept the faith will only become apparent in the next few years.

New Digital Technologies

Unlike Siemens Healthineers and GE Healthcare, which have primarily focused on developing AI tools in-house, Philips has instead chosen to partner with medical imaging AI vendors. Even on this front, however, they are somewhat behind their chief competitors, with their AI Orchestrator platform only being released at RSNA 2021. This measured schedule has at least resulted in well-executed products, somewhat making up for the slower schedule.

One of the reasons for this sluggishness is that Philips has chosen to rebuild its entire software offering. Longer-term this will arguably pay dividends, as the vendor’s entire software catalogue can be architected from the ground-up, as a broad, cloud-native enterprise imaging solution with solid AI integration. However, this is still some years off, leaving Philips in a sort of holding pattern until then, doing enough to avoid losing market share to hungry specialists, but not yet unleashing its solution’s final form. Ultimately, Philips has started to lay a lot of groundwork, but the fruits of that labour are yet to be realised.

Recent Performance

As detailed in Signify’s recent analysis of vendor’s latest financial results, Philips seems to be prioritising margin over the conversion of orders to sales. The vendor says it hasn’t yet lost a customer through such an approach, but this could become more difficult over time if supply chains cannot be restored, and providers are forced into long waits for their equipment. For the time being, however, Philips’ medical imaging business is performing strongly.

There are distractions elsewhere in the business. The recall of certain Philips’ ventilators (DreamStation and specific Trilogy solutions) may not immediately impact the company’s imaging business, but ventilator revenues were another of those unexpected Covid windfalls which could have left Philips ready for a large opportunistic acquisition. The recall of the ventilators could therefore limit the vendor’s ability to capitalise on potential opportunities near-term.


Philips has strength in its admirably broad portfolio. What’s more, several areas in which it is strongest such as interventional and cardiac imaging are set for above industry average growth. Further, while it may not have made any headline grabbing acquisitions in the therapeutic space on the scale of Siemens’ Varian move, it has made several smaller “tuck in” acquisitions of therapy device companies over recent years, as well as some very solid partnerships such as that with Varian rival Elekta, which have left it in a strong position moving forward.

However, it must, as efficiently as possible, fully complete the integration of Carestream. Upon which it can not only increasingly leverage the capability it gained from the acquisition, but, as significantly for the longer term, then begin to focus on its next targets. Rounding out its AI offering and re-building its core products to capitalise on the new trends of cloud capability and enterprise imaging.


Portfolio and Portfolio Integration

Canon’s combination with Toshiba Medical Systems, a deal which was completed in early 2018, has bolstered the Japanese vendor’s modality offering, with the deal bringing together two largely complementary product portfolios. With regards to the advanced modalities, the vendor arguably lags behind Siemens and Philips, lacking the very top draw innovative products that those vendors lead in. Similarly to Philips, Canon does have its strengths, with cardiac imaging capability, acquired from Toshiba, an area where the vendor stands out.

One modality in which Canon does see growth is in ultrasound. While the vendor is well represented in its domestic market, the company has recently become more aggressive on price in order to further penetrate the North American and European markets. Many vendors have comparable products in ultrasound, so price is one of the few levers Canon has at its disposal. Success will be hard to come by in this market, with there being limited differentiation between it and its immediate competitors, but if it is to enjoy the longer-term service revenues that increased footprint brings, it is a critical objective.

Canon’s digital offering is also relatively strong in places. The vendor has been trying to build on its prowess in advanced visualisation and broaden its offering into a fully-fledged enterprise imaging product. However, these efforts have not yet gained significant traction in the market, leaving the vendor with a competent core package, but without a sizable market share. Of bigger concern is the lack of operational tools, a component which is becoming increasingly important to securing larger, higher-value deals.

New Digital Technologies

While Canon offers a competent core platform, it is starting to fall behind when it comes to newer digital technologies. It hasn’t made the same progress with AI development as the standouts GE and Siemens, and lacks many of the tools those vendors offer, although is making headway with workflow tools. Across imaging IT however, the firm holds the smallest global share for imaging informatics of the “five” reviewed here. Canon has started to further address these gaps, however, responding with a new brand and AI strategy in November 2021. The Japanese firm hopes its new Altivity brand will improve efficiency and outcomes, with tools based on both clinical decision making and workflow, although the fruits of this labour are yet to be seen.

When it comes to cloud, Canon, like its peers has made progress. It is not at the same leading edge as the nimbler imaging IT specialists but will facilitate its customers’ transition to cloud should they request it.

Recent Performance

Over recent quarters Canon has performed strongly. As illustrated in Signify Research’s recent financials analysis both the vendors’ latest quarter and in particular its trailing 12 months showed solid growth. Canon is strongest in its home market of Japan, and as such will have been among the key beneficiaries of Japan’s Covid recovery spending, given its strength in modalities used in Covid care, and more internally focused procurement policies.

While this boost will end as extra funding to fight the pandemic runs out, and providers have all the systems they need, the growth in Canon’s installed base will grant the vendor opportunities for service revenue and upselling opportunities for years to come.


Canon is performing strongly in its domestic market, it has a broad, reasonably-well integrated portfolio, with competence across most modalities and core software components, and a few areas of excellence. The vendor has also performed strongly setting it up for reasonable domestic revenue growth in the coming years.

However, despite this strength the vendor finds itself in a sort of stasis. There is limited opportunity for growth at home, which means the vendor needs to look further afield, but without a unique selling point it could struggle to gain traction. Without an area in which it is the hands down leader or can quickly grow its enterprise imaging platform share, it is hard to see what is going to entice North American and European providers to go with the Japanese vendor instead of one of the better-established alternatives.


Portfolio and Portfolio Integration

Like Canon, Fujifilm has recently closed a major portfolio acquisition of Hitachi’s diagnostic imaging group. This has bolstered its portfolio bringing Hitachi’s capabilities in MRI, CT and diagnostic ultrasound alongside Fujifilm’s range of X-ray and point of care ultrasound systems. The combination leaves a large vendor with a breadth of portfolio that will enable it to compete for the larger network-wide imaging deals that are increasingly defining the market. However, this joined-up approach is yet to be fully leveraged, leaving Fujifilm with what is effectively several disparate product sets.

As with GE, Fujifilm leans toward being a more generalist, and although there are some smaller niches in which it excels, such as mobile X-ray, it doesn’t stand out in any single category, offering a safe, rather than revolutionary option for providers. Fujifilm is however aggressive on price, allowing providers to amass capability for a competitive outlay. Other vendors, such as Siemens Healthineers, are also releasing lower-cost MRI systems. While this will increase competition for Fujifilm and threaten the legacy Hitachi MRI portfolio, it will also increase the interest in MRI in non-traditional settings, a dynamic which Fujifilm could arguably use to its advantage.

This hardware portfolio is also backed up by a solid core imaging IT package, while the vendor has made good headway in its transition to enterprise imaging. As with its competitors, it has lost out to the likes of Sectra, Mach7 and Visage for large academics and IDNs in the US market of late, but this has not yet been a significant issue to seriously erode market share. Moreover, the firm has a dominant position in the Japanese domestic market for imaging informatics.

New Digital Technology

Fujifilm has invested in its AI offering, and it shows. Its ReiLI brand is competent and represents the vendor’s effort to enhance its diagnostic imaging products, with a particular focus on supporting the diagnostic imaging workflow, leveraging the combination of its deep learning innovations and utilising its expertise in image processing. Like Siemens, Fujifilm has also adopted a more integrated approach to AI, choosing to develop algorithms in-house on an integrated framework, rather than overly relying on external partners and AI marketplaces as has been the choice of some of its competitors. Over the longer term, this will likely prove a smart choice. Where Fujifilm falls down, however, is in execution. These foundations have been laid for some time, but there has, so far, been a lack of progress to highlight that Fujifilm is realising its vision.

Recent Performance

Fujifilm’s recent performance is difficult to accurately ascertain, with the acquisition of Hitachi’s imaging business and the restructuring of its business units making it hard to contextualise its filings. That said, the vendors’ strength in mobile X-ray systems and ultrasound systems will have stood it in good stead over the course of the Covid pandemic. This performance, will, like Canon, also have been bolstered by the substantial government support given in the vendor’s largest market, its home market of Japan. Further aiding Fujifilm over the pandemic is the vendors’ aggressive pricing, making it an attractive proposition for providers who have reined in budgets because of the coronavirus pandemic.


Whether Fujifilm can continue to capitalise on these recent advantages remains to be seen. As with its peers, any additional sales during the pandemic leave Fujifilm with solid up-selling and servicing opportunities which could help to bolster growth.

More broadly, if Fujifilm is set to achieve the ambitious growth targets it laid out in its VISION2023 plan, released in April 2021, it must look to utilise its newly found breadth of offering to secure the larger, longer-term deals that its most successful competitor’s relish. It does, on the face of it, appear to be making substantial progress. In its strategy announcement it targeted revenues of 750bn Yen ($6.5bn) for its healthcare segment in FY2021. After three quarters the vendor is now offering guidance of 790bn Yen ($6.9bn) for the year, well on its way to the 860bn Yen target it has set itself for FY2023.

As with Canon, for continued growth Fujifilm must look for opportunities outside of its home market. Unlike Canon, however, which has made plain its designs on the US market, Fujifilm may look to carve out its own territory in emerging markets. With a strong network of distributors and subsidiaries, Fujifilm’s competence and price competitiveness could see it replicate the large managed service deals that Siemens Healthineers, GE Healthcare and Philips have prioritised in other markets, including India, parts of the Middle East and South-East Asia.

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