Initially seen as a fashion accessory, smartwatches and fitness bands have now entered the healthcare ecosystem. By leveraging advanced technologies such as Artificial Intelligence (AI), Cloud, Machine Learning, Big Data and Analytics, these wrist-worn devices are becoming more sophisticated and relevant in the present day by providing actionable insights and prescriptive measures for end users. This has also ushered in technology giants such as Apple, Samsung and Google in the healthcare space.
Here’s a look at the fast-growing wrist-wear market in the backdrop of the digital health space
The increasing focus on personalized care, early detection, and precision medicine along with rising health consciousness is driving the demand for healthcare-related wearables and applications. A survey by Accenture shows that the use of wearable devices by consumers has nearly quadrupled in the four year period (2014-2018), from just 9% in 2014 to 33% in 2018. Further, “roughly three-fourths of health consumers view wearables — such as those that monitor glucose, heart rate, physical activity and sleep — as beneficial to understanding their health condition (75%), engaging with their health (73%), and monitoring the health of a loved one (73%).”
The smartwatch market is growing at a fast pace and is expected to reach a market value of $130.55 billion by 2024 from $48.14 billion in 2018, registering a CAGR of 18.23% during the forecast period (2019-2024).
Together, Apple, Samsung and Fitbit capture 72% of the market.
In 2018, Apple (AAPL) received De Novo classification for the ECG app and the irregular heart rhythm notification from the Food and Drug Administration (FDA). The Apple Watch is capable of generating an ECG similar to a single-lead electrocardiogram; it can check the heart rate and alert a person about any irregularities. The Apple Watch comes with a vital ‘fall detection’ feature and can even provide insight to women about their menstrual cycle. Not just smartwatches, Apple is working across the healthcare technology segment, something which has been echoed by Tim Cook in one of his interviews where he said, “If you zoom out into the future, and you look back, and you ask the question, ‘What was Apple’s greatest contribution to mankind?’ It will be about health.”
Apple’s arch rival in the smartphone space, Samsung (SSNLF) is one of its closest competitors in the wrist wearables space as well. Samsung smartwatches help track heart rate, stress levels, sleep, water intake and much more. In June this year, the Galaxy Watch Active revealed its anytime, anywhere ‘blood pressure-checking’ capability using My BP Lab 2.0.
The global smartwatch shipments grew an impressive 42% annually to reach 14 million units in the third quarter of 2019. Apple Watch maintained first position with 48% global smartwatch market share, while Samsung held second place, and Fitbit (now acquired by Google) ranks at third, according to Strategy Analytics.
Fitbit (FIT) once enjoyed being the uncrowned king of the wearable device market, controlling a major market share until the Apple Watch came on the scene, and the dynamics started to change. Fitbit sold 22.3 million connected health and fitness devices in 2016, while the same dropped to 13.9 million in 2018. The limited functionality of a fitness band when compared to a smartwatch has been a major reason for Fitbit’s shrinking market share. A CCS report highlights, “Western consumers now find less value in the simple fitness bands, even with the added convenience of long battery life, preferring to move on to smartwatches, which offer all the functionality of fitness trackers and so much more.”
Earlier this month, Google (GOOG, GOOGL) entered into a definitive agreement to acquire Fitbit for $2.1 billion. Over the years, Fitbit has sold more than 100 million devices and utilizes data to deliver unique personalized guidance and coaching to its users. While, Google introduced Wear OS by Google back in 2014, and has been making advances in medical technology but not particularly in wearables. Fitbit gives Google the opportunity to expand further into the wearables segment as well as “introduce Made by Google wearable devices into the market.” Back in 2018, Fitbit and Google collaborated to explore the development of consumer and enterprise health solutions. Last month, Fitbit announced an alliance with Bristol-Myers Squibb and Pfizer to help drive timely diagnosis of atrial fibrillation (AFib) with the aim of improving earlier detection in individuals at increased risk of stroke.
Fitbit and Google together can become a significant competitor to the existing market leaders in the wrist-wearables space. Wearables will assume a more significant role in the healthcare ecosystem and become a significant revenue generator for the technology providers. WHO Director-General Dr. Tedros Adhanom Ghebreyesus summarizes the role of digital health technologies: “Harnessing the power of digital technologies is essential for achieving universal health coverage. Ultimately, digital technologies are not an end in themselves; they are vital tools to promote health, keep the world safe, and serve the vulnerable.”
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.