The wearable technology market is still undervalued

Growth in the wearables market has been nothing short of astounding: according to IDC, the number of shipments rose 173.3 percent last year. PwC said “there is indeed a wearable future ahead” as the adoption rate of wearables falls in step with that of tablets, investment climbs into the billions of dollars, and the industry’s combined revenue into the tens of billions.

One of the market’s major forces, Fitbit, was last year valued at $7.6bn, having surpassed rival GoPro less than a week into its initial public offering. As clear an indication as you’re ever likely to see that wearables are enjoying a surge in demand, investors are clamouring atop a wave of explosive growth and capitalising on the sector’s rich and as-yet-unrealised potential.

“The growth of the most common wearable technology devices such as smartwatches, fitness trackers, eyewear, and the like was enabled by the introduction of low energy Bluetooth in Bluetooth 4.0 and later”, said James Hayward, Technology Analyst at IDTechEx. “Products such as the smartwatch, fitness tracker, and the like had existed for many years, but never had the form factor, battery life or use case to reach mass markets. This has now changed.”

According to IDTechEx, the market for wearable technology will reach $70bn in 2016, up from an already-impressive $20bn in 2015. However, though market stalwarts such as Fitbit and Jawbone receive the lion’s share of the coverage, many have lost sight of the market’s potential, not just as a way of improving fitness, but also healthcare. By combining medical, fitness and wellness, it’s not unreasonable to suggest wearables could revolutionise the healthcare sector.

“While the smartphone remains Americans’ device of choice, the tech world is creating a future of wearable devices that promises to entertain consumers, save them money and help them live healthier lives”, said the PwC report Health Wearables: Early Days. “Technology companies’ interests in health and wellness have sparked the creation of a myriad of wearable devices, from fitness bands that monitor activity and sleep patterns to flexible patches that can detect body temperature, heart rate, hydration level and more.”

Not only could some of the market’s brightest minds improve the resiliency and efficiency of healthcare solutions, but advancements in wearable technology could also address some of the underlying issues plaguing the global healthcare technology market.

Big names, big opportunities
Fitbit’s revenues have risen tenfold in the past two years, and even President Obama was last year seen sporting a wristband of his own. Speaking to business magazine Inc, the company’s CEO and co-founder James Park said one reason for Fitbit’s success is that its mission has remained unchanged: “How do we use technology to help people get healthier and more active, specifically by giving them data and guidance and inspiration?”

Certainly, Fitbit is by no means the most advanced toolkit in the wearables market, though the health benefits tied to it serve to underline the sector’s place in realising broad-based and sustainable gains for the healthcare system. While the progress is limited in consumer products, the same cannot be said for devices made for medical practitioners.

According to Mordor Intelligence, the global market for wearable medical devices will exceed $7.8bn by 2020, up from $3.3bn in 2015, growing at a CAGR of 17.7 percent and driven by ongoing projects in the healthcare sector and rising chronic disease rates. Broadly speaking, the market is segmented into monitoring and feedback, disease management, rehabilitation, and health fitness, with the first occupying a 70 percent share of the market, split between North America, Europe, Asia-Pacific and the rest of the world. Though much of it is concentrated in the US and in the hands of major market participants (namely Fitbit, Omron, Philips Electronics, Draeger and others), the rate at which the market is growing means there is potential for greater things in the months and years to come.

Healthcare shake-up
Silicon Valley-based medical device and healthcare technology company VitalConnect, for example, uses its HealthPatch biosensors to log a range of biometric measurements. The patch, together with its companion app SweetBeatLife, allows users to monitor skin temperature, heart rate variability, body posture and a string of activities for them to pass on to a healthcare professional. “The value of multi-modal data is greater than the sum of its parts”, said the company, and the ability to monitor a patient remotely is a major leap forwards for the medical profession.

“Wearables bring many advantageous properties that can help in a huge range of disease verticals, and everyone from the smallest start-ups to global medical device giants are embracing wearables to solve problems across the industry”, said Hayward. “Whether it be improving the convenience and comfort of repeat testing and self-medication in diabetes, decreasing physician or physiotherapist visits post-surgery with active monitoring and coaching devices, or monitoring infant heartbeat and activity during pregnancy to provide peace of mind and insight to future parents, wearable technology solutions are finding their way into many aspects of modern healthcare. All of the largest players are involved, and this is a growing industry worth billions of dollars.”

HealthPatch is by no means the only device advancing the healthcare profession, whether it’s “smart textiles” (AiQ), wearable sensors (Metria), headsets (EEG) or insole sensors (Moticon). Unfortunately, these additions create a number of new problems.

“Wearables enable the collection of physiological data on an unprecedented scale. The challenge is making that data actionable in a safe, reliable and efficient way”, said Hayward. “At the moment, many are focused on improving the quality of the information provided, so that it goes beyond just data to something that is actionable and useful to the user.”

Aside from the difficulty of collating and interpreting data, there are additional challenges if users take the data into their own hands; information is often housed in silos outside the healthcare system, and users must be educated about exactly what it is they’re looking for and how they can put that data to good use. Communication between wearables companies, the healthcare system and the consumer is of the utmost importance; without that dialogue, the sector’s promise will likely come to nothing.