After Fitbit held an explosive IPO last week, some observers asked if the wearable health movement is sustainable, or just a flash in the pan. I've been studying the market for some time, and I believe most signs point to wearable health tracking having serious long-term potential. In 2014, 90 million of the devices were sold, and demand continues to be strong. The folks at eMedcert have collected some more interesting data points as well:
- The annual smart wearable healthcare market volume will grow from $2 billion in 2014 to $41 billion in 2020, a compound annual growth rate of 65%. (CDW Healthcare)
- Over 80% of consumers said an important benefit of wearable tech is its potential to make healthcare more convenient (PwC)
- 68% of consumers would wear employer-provided wearables streaming anonymous data to an information pool in exchange for lower health insurance costs. (PwC)
- The wearable band market grew by 684% on a worldwide basis in the first half of 2014 compared with the first half of 2013. (Canalys)
- Today, 1 in 5 American’s own some type of wearable technology. (PwC)
When Fitbit, Jawbone and other health wearables came out, many viewed them as passing fads. But they struck a real chord not only with those who regularly exercise, but mainstream consumers too. In a recent New Yorker article by author and humorist David Sedaris, he chronicled his love/hate affair with his Fitbit. His tongue-in-cheek commentary chronicles his obsession with having to continue to beat his step record:
“I look back on the days I averaged only thirty thousand steps, and think, Honestly, how lazy can you get? When I hit thirty-five thousand steps a day, Fitbit sent me an e-badge, and then one for forty thousand, and forty-five thousand. Now I’m up to sixty thousand, which is twenty-five and a half miles. Walking that distance at the age of fifty-seven, with completely flat feet while lugging a heavy bag of garbage, takes close to nine hours—a big block of time, but hardly wasted.”
Perhaps the most important thing that Fitbit and other wearables have done is bring the importance of physical activity to the forefront. Using a Fitbit or similar device makes monitoring one’s health part of a lifestyle. My Apple Watch, for instance, has a feature that reminds me to stand up and walk around once an hour. Doing so is becoming second nature to me now, while in the past I would sit and write for hours on end, never even leaving my chair unless I had to use the restroom.
Dedicated health wearable devices that monitor your steps, calories burned and more have become cheap enough — under $100 in many cases — that many more people can now afford them. Smartwatches, meanwhile, are on track to become an even more important category, as they include health-monitoring features while adding more versatility to the overall wearables market. However, it will be the health industry that makes wearables go truly mainstream.
According to Orange Healthcare, 88% of physicians want patients to monitor their health parameters at home. Health insurers, meanwhile, are making wearable health monitoring a key tenet of their plans. As one HMO executive told me, it's much cheaper to keep a person healthy then it is to make them better once ill. By 2018, 70% of healthcare organizations worldwide will invest in consumer-facing technology, an IDC Health Insights report found. And CDW Healthcare says wearable technology could drop hospital costs by as much as 16% over the course of five years, while remote patient monitoring technologies could save the healthcare system $200 billion over the next 25 years.
Lowering health care insurance premiums and cutting hospital costs will provide the real fuel for health wearables' fire. Obamacare has put healthcare on the front page, insuring that people, at least in the U.S., will become more health conscience. And if health wearables are prescribed or recommended by people's doctors or health insurers, more Americans will start using them. That's why the health wearable tracking market is here to stay.
Tim Bajarin is recognized as one of the leading industry consultants, analysts and futurists, covering the field of personal computers and consumer technology. Mr. Bajarin is the President of Creative Strategies, Inc and has been with the company since 1981 where he has served as a consultant providing analysis to most of the leading hardware and software vendors in the industry.