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August 11, 2014
What’s Next for the Changing Healthcare Consumer – Explosive Growth in Wearable Devices
By: Whitney Baldwin

A major factor identified in our recently published research note, The Changing Future of Consumer Healthcare, is the evolution taking place for consumers who are increasingly taking charge of their own health and wellness. In addition to the increased spending on health clubs, retail clinics and mobile Health Apps, one of the clearest signs of this ‘next wave’ behavior is the growth projected for wearable devices. The consumer market for smart wearable technology is projected to grow from $2.65 billion in 2014 to $8.75 billion by 2018, with healthcare wearables projected to grow more than four times, from $370 million to almost $1.6 billion, a compound annual growth rate of 42 percent. The healthcare ‘share’ of this market will be 18 percent, alongside other uses such as fitness & sports, lifestyle and entertainment.

Key Drivers of Growth –New Behaviors, Demographics, and Technology. As noted in our research, consumers across the spectrum have a desire to change their behaviors by taking more control of their healthcare. They are increasingly recognizing that they can use technology to actively monitor their activity, nutrition, key health markers, and health records – in addition to seeing the results in ‘real-time’ and sharing the data with their healthcare provider. Underpinning this behavior change is the well-recognized ‘grey’ population, which is projected to expand substantially in both developed and developing markets. With this burgeoning interest, the key technology players see the opportunity, and they are seizing the moment to capitalize on this new market.

The Big Players Are Creating the Market. Initially the wearable devices were in limited use by sports and fitness buffs, but now big players like Samsung, Apple, Microsoft, and other smaller players like Fitbit and Jawbone, are rapidly developing and launching new products designed to be more accessible, multi-functional and easier to use. Samsung jumped in early with the Samsung ‘gear’ wearables to gain an early lead. The market is now eagerly anticipating the introduction of the Apple iPhone 6 and iWatch, which are rumored to have significantly enhanced healthcare capabilities. Given Apple’s history of innovation, it’s hard to predict what that might look like, but it will only serve to further expand the interest and usage of wearables.

The Implications for ‘Consumer Health’ Companies. With consumers accessing more information about their health, all manufacturers that serve the consumer health industry, from traditional OTC players to new entrants, will want to marry their products and brands with the unmet consumer need for new, innovative services that reinforce brand relevance and drive better health. The availability of more data that consumers are sharing means that all companies need to harness the Big Data, and utilize it to develop sharper insights, develop personalized brand experiences via digital and social media, and create more innovative products and services.

With all these consumer and market changes, manufacturers will need to develop new capabilities and integrate them across their organization and corporate culture. The companies that embrace this new paradigm at speed and scale are poised to be the next wave of winners in the marketplace.

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