This is the very first MobiHealthNews In-depth -- our weekly series of longer form journalism focused on industry trends, pressing issues, and important events. This week we rounded up some digital health-related takeaways from the massive International CES 2014 event that recently took place in Las Vegas. The event's original name, the Consumer Electronics Show, points to its core focus, but the rise of direct-to-consumer and not-so-direct-to-consumer health and fitness devices has slowly and surely become a dominant theme of the event. This was true for 2014 more than any other year as some pundits claimed digital health stole the show. More on digital health at CES 2014 in the pages to follow.
Wading through a saturated fitness tracker market
By Jonah Comstock
We've been referring to the activity tracker space as "crowded" for a long time. Increasingly, the space is also starting to become commoditized -- features that used to make trackers stand out, like sleep tracking, are rapidly becoming standard and expected.
At the CES 2014, the Las Vegas event formerly known as the Consumer Electronics Show, we saw a bloom of new activity trackers, something that has been going on all year but a show like CES makes very obvious. And beyond just a lot of new small players, it saw an unprecedented number of large consumer electronics companies previewing fitness trackers for 2014 release: The Sony Core, the LG LifeBand Touch, the Epson Pulsense, the Razer Nabu. That's with the Samsung S Band still to come and the Nintendo Fit Meter recently in stores.
CES and NPD show us: The tracker space is growing and booming
The recent NPD numbers have given us some idea of exactly how big the space is, and why these big players might want a piece: the digital fitness category, which includes smart pedometers and fitness trackers sold in retail technology stores is a $330 million market. NPD Group Executive Director and Industry Analyst for Consumer Technology Ben Arnold told MobiHealthNews he sees a lot of potential for growth.
"I'm fully expecting the market to double within the next year," he said. "I think it's just natural for a market this nascent to double the sales we saw in a previous year."
And three companies right now own 97 percent of that market: Fitbit, Jawbone, and Nike. At first blush, it's hard to reconcile that stratification with the sheer number of trackers MobiHealthNews is keeping track of. How are so many companies playing in that leftover 3 percent?
Here's a few points to keep in mind. One, many of these trackers just aren't in stores. Basis Band, for instance, is still a product you have to buy online. The Misfit Shine has just recently hit Best Buy and Apple Stores, but before that was in the same boat. NPD doesn't track those numbers and can't really, although they do track online resellers. It's not unreasonable to think the smaller players are still selling a lot of units themselves, but this remains a black box. The only insights would have to come from the companies themselves.
Arnold also said sports retail stores aren't necessarily being tracked as closely by NPD, a firm mostly focused on technology. So athlete-focused brands like Polar or Garmin might be being underestimated.
Second, some trackers may be falling into other categories. The BodyMedia Core device, for instance, with it's clinical bent and focus on weight loss, is more likely to be considered a health device than a fitness tracker. Nintendo's Fit Meter is likely being counted as a video game accessory, even though it functions very much like an activity tracker. And corporate wellness-focused trackers, like the Virgin Pulse Max or the Fitlinxx Pebble aren't showing up on this radar as long as employers buy them direct from manufacturers.
Finally, though, as mentioned above, the space is just growing. The demand is so high that the would-be new players are seeing that the time is right to get involved.
"If the market doubles, those three products aren't going to catch all the additive sales," Arnold said. "So I think there is room for some of these upstarts."
What will happen when CE companies crash the start-up dominated tracker space?
It's tempting to say that brand recognition will be a major boon to big names in the tracker scene, but experience doesn't necessarily bear that out. Of the big three, Nike is by far the biggest brand, not even to mention the company's close relationship with Apple. But it only has 10 percent of retail sales to Fitbit's 68. The companies have more money to pour into R&D and marketing than startups certainly, and could possibly leverage other technologies they manufacture. For instance, Samsung's S Band, if it ever launches, could connect to Samsung phones in some novel way.
But the real challenge for these companies to make progress in a space with such established leaders is to really innovate the space, something that is much harder than it sounds. Sony's approach seems to be going bigger than health -- the LifeLogger app they previewed at CES brought in all kinds of phone data onto a visual timeline with the activity data from the Core. Razer Nabu, on the other hand, is all about taking social to another level, possibly even vibrating when other Nabu users in the wearer's social network are physically close by.
These innovations (they might less charitably be called gimmicks) will sink or swim based on whether or not the value they provide is something the consumer actually wants or needs. And one consumer need that the current devices don't fulfill is invisibility -- consumers might want to track their fitness without having an additional device to charge, manage, and keep track of. With that in mind, some of the companies entering the space, like LG, Razer, and Epson are hedging their bets with smartwatches or smartwatch-like features. This takes them out of exactly the same space as Fitbit, Nike and Jawbone, but it doesn't take them out competition with those trackers.
Can fitness trackers survive the smartwatch and the M7?
One question we've been asking for a while that still hasn't been answered is this: is the fitness tracker, as a dedicated, distinct device, going to persist as a category? Or will smartwatches, or even phones themselves, prove themselves adept enough at fitness tracking to make a dedicated bracelet obsolete? What makes the activity tracker category so different than the Mp3 player or the PDA when they first launched -- two devices which have now been largely absorbed by smartphones that can do everything they can do?
Apple's introduction of the M7 motion co-processor earlier this year -- and the succession of apps that have jumped on board that trend speaks to this risk. Just a few weeks ago, Fitbit itself introduced tracker-free tracking to its app, something Arnold commented on.
"To me, that is sort of a statement about the role that hardware plays in the struggle between dedicated hardware, you know sensors embedded in your body, versus a phone that has an extra accelerometer in it or you know another processor that can help you with all that information paired with an app that can make sense of it," he said. "I mean that's a huge issue that the market is going to have to deal with, this age old hardware versus software argument. And that's probably what I'll be looking for in 2014."
MobiHealthNews asked a lot of fitness tracker makers about smartwatches last year for our activity tracker podcast. A popular answer among them was that there's one thing you can only get by having a dedicated device on your wrist, and that's having a dedicated device on your wrist. The tracker itself -- wearing it, checking it, showing it off to your friends, sharing the data on social media -- is all part of what makes it work as a behavior change device. It's physicality fuels an experience that people find motivating. People look down at their wrist and think "How much have I moved today?"
Similarly, fitness bands are starting to be seen as a fashion accessory, not in spite of their fitness functionality but because of it. In the 21st Century, it's trendy to be techy, and people are proud that they're taking steps to be more active. We saw this in a Vogue piece last year, a recent piece from Refinery29, and the various color and design options the major players are releasing.
There is some evidence that fashion and reputation are driving these trends. Rashes aside, people like to wear activity trackers. But whether that's enough to save the FuelBand from the fate of the iPod remains to be seen.
The barrage of trackers we saw at CES are going to shake up the space, one way or another. But exactly what form that will take is another question. Depending on whether they can make themselves stand out, the big guns could edge out the startups dominating the market, fail to get a hold at all, or redefine the category, possibly washing away the fitness band as we know it.
Is the direct-to-consumer health mini-boom hurting 'professional' digital health?
By Brian Dolan
While CES news was in full swing earlier this month, Mobisante co-founder and CTO David Zar emailed MobiHealthNews to lament the growing number of direct-to-consumer mobile health devices.
“I don't know if you have enough data points, yet, but next year you will,” Zar wrote. “So how about a graphic showing the number of health products at CES in a given year compared to the number of those companies still in business [the following year]?”
Zar’s company Mobisante offers an ultrasound system that leverages a smartphone, an ultrasound probe, and a special imaging software app. The device is intended for clinicians, of course, and Zar has long noted how much easier direct-to-consumer digital health companies have it when it comes to raising venture capital.
“The way I see it is that consumer health is draining money from ‘professional’ health and that many (most?) of those consumer plays won't last. They may last a year or two or even three, but long term? I don't think there is a market for 100 fitness trackers,” Zar writes.
Zar worries that too many investment dollars are being sunk into short term speculation than long term investment in scientifically-proven technologies that have efficacy data to back them up.
“The consumer side is easy to invest in because it's a model most investors understand -- large volume, low margin, quick sales and out in a couple of years with a return that's nice,” Zar writes. “This does little to really innovate and change the healthcare landscape -- again, how many fitness trackers do we really need?”
Zar makes a lot of good points and raises important questions. It’s not a foregone conclusion that investors would invest in more healthcare professional-facing startups if there weren’t so many consumer health startups vying for dollars, but Zar has been in those trenches when he and his colleagues fought for their $4.2 million announced last June.
Beyond steps: The medical device scene at CES 2014
While fitness devices certainly led the charge at CES 2014, as discussed above, there were a number of medical devices on display too. The highest profile company with medical devices on display at the event was probably Mountain View, California-based iHealth Lab, which showed off three new smartphone-enabled, wearable health devices: a blood pressure monitoring vest, an ambulatory ECG device that sticks to the wearer’s bare chest, and a wristworn pulse oximeter device. The devices are not yet FDA-cleared.
“What we want to be able to do is clearly articulate that the technology has already arrived – we are here – and we are providing tools for you that you can use to focus on prevention,” iHealth President Adam Lin told MobiHealthNews. “CES is a very important forum, and we want to take it beyond steps, calories and diet. They’re very important, but blood pressure, pulse rate, pulse oximetry, blood glucose – those are critical for all of to understand too.”
While iHealth does sell a number of connected weight scale and blood pressure devices direct-to-consumer at brick-and-mortar stores like Apple’s, it is increasingly working with healthcare provider partners to bring less expensive, smartphone-enabled medical devices into clinical settings too.
“Our focus right now is not lifestyle and fitness,” Lin said. “It is clearly health and wellness. And CES is still very important because the bulk of our model is still on the retail side, even though we are now focused on the clinical side too. At least for now, consumers still drive the bulk of demand.”
While none of the devicemakers MobiHealthNews interviewed for its CES coverage brought up the rise in the number of people in the US moving to high-deductible health plans, and the widespread prediction that this group will soon make up a majority of Americans, the shift of financial responsibility to the consumer’s wallet could help drive direct-to-consumer uptake in smart health devices, too.
The (much-needed) rise of digital health curation platforms
By Brian Dolan
By many accounts digital health was the breakout category at the International CES 2014 event in Las Vegas earlier this month. While not the most important metric, the sheer quantity of new health and fitness tracking devices at the event certainly shows how much promise companies believe this segment has. And with an influx of new devices and already impressive stable of devices available in the market, curation becomes a key issue. How can consumers sort through these offerings? Which ones are right for them? Where are they for sale?
A number of companies have begun creating platforms that help consumers suss out digital health. The newest entrant -- it launched at CES 2014 -- is Bioniq Health, which FutureMed’s Dr. Daniel Kraft co-founded.
The "first connected health pharmacy"
BioniqMD iPhone app for physicians
Bioniq aims to will help people explore, find, understand, compare, discuss and purchase technologies relevant to them and those they care about.
Kraft told MobiHealthNews in an email that figuring out “which is best” for a potential buyer is a personal question that “often depends on the needs and predilections of the individual … and increasingly based on clinical arena as we move to 'Quantified Health'. There is currently no one 'go-to' place to find and compare and discuss the increasing options.”
Bioniq is thinking beyond apps and devices, too. Its site’s “About” page notes that it is “now possible to obtain personalized ‘omics’ ranging from genetic screens to the analysis of your gut’s microbiome which can inform individual insights, and also allow participation in biomedical research.” uBiome is one such service that is featured on Bioniq in its earliest iteration.
One differentiator for Bioniq is its plans to use consumers’ genetic data – if they have signed up with a company like 23andMe, for example – to generate recommendations for digital health devices and services. Genetic data might help Bioniq users understand which conditions they may want to monitor via devices before those conditions present themselves symptomatically. Kraft called this future feature the “first genetic recommendation engine”.
Kraft told MobiHealthNews that you could call Bioniq a “connected health pharmacy” because the site is not just direct-to-consumer, but is working to loop physicians into the recommendation process too. Bioniq is launching a companion mobile app called BioniqMD for physicians that will enable a physician to “prescribe” devices, services, and apps to patients, Kraft said. He doesn’t mean “prescribe” in the adjudicated by a pharmacy benefits company and covered by insurance way. Not yet, anyway.
“Of course most of these devices don't require a true prescription, but [we’ll] make it easy for clinicians to obtain or recommend ‘exercise’ with a Jawbone UP band, for example, and a connected scale,” Kraft wrote. “Or for hypertension -- a connected blood pressure cuff.”
Bioniq is using Doximity’s MD verification service to make sure its physician users are the real deal.
Physicians recommendations and genetic recommendations are two ways Bioniq hopes to set itself apart from traditional online retail sites like Amazon, but Bioniq isn’t the first group to recognize the need for digital health curation for consumers.
The reinvention of WebMD includes digital health curation
Last year WebMD announced plans for a digital health device store built right into its flagship consumer-facing app, which already counts 19 million users. Notably, WebMD is connecting its consumer app to its clinician app, Medscape, to enable the kind of health app and device recommendation mechanism that Kraft’s Bioniq aims to add soon. WebMD’s apps are already using that feature to help Medscape physicians recommend health content to patients using the WebMD app.
WebMD CEO David Schlanger told MobiHealthNews in an interview last month that it planned to launch its in-app marketplace for buying personal health devices and FDA-cleared medical devices during the first quarter of 2014. At launch the devices will be from companies that are in the 2net ecosystem, which is managed by WebMD partner Qualcomm Life. Schlanger said WebMD is not planning to exclusively offer 2net devices – others will be added to the marketplace in the future.
Wellocracy: a healthcare system-led connected health curation effort
Another digital health curation platform, Wellocracy, came out of Partners Health Care in Boston. The website, which launched in October 2013, offers readers “1-a-Day” and “Fit-it-In” tips to help them make healthier decisions and form better fitness habits. Wellocracy experts also help users of the site decide which mobile apps, sleep trackers and activity trackers fit their life habits through tools like the Wellocracy quiz, which helps readers understand what motivation style works best for them. The website has also teased some special features coming soon like a project for brides-to-be called “Say ‘Yes’ to the Tracker”.
It’s a positive trend that a handful of curation platforms have cropped up in tandem with the explosion of health and fitness trackers evident at this year's CES event. While nearly all of these are still new efforts, their aims are especially for health-related consumer electronics where much more than wasted money is on the line.
