This has been a year marked with pessimism about the future of biosensing wearables. We’re not buying it.
For the past 15 months, Rock Health has been conducting industry research on the growing wearables and biosensors market, and we mean growing. Venture funding of biosensors and wearable technology increased 5X from 2011-2013—more than double the growth of digital health overall during the same period. The merging of these two spaces into a singular category—biosensing wearables—is where we see the most potential to impact healthcare.
Today there are an overwhelming number of trending wearables, but not all of them are capable of measuring or telling us something about our health. Similarly, there are plenty of biosensors that measure physiological inputs but do not have a wearable form factor. That’s why biosensing wearables are exciting: they allow for continuous physiological monitoring in a wide range of wearable form factors.
ABI research predicts that in 2014, 90 million wearable computing devices will be shipped, of which approximately 74 million will be biosensing. However, the purchase of a biosensing wearable device does not currently equate to long-term usage. According to a survey by Endeavor Partners, the rate of engagement for activity trackers drops below 50% within 18 months. To combat this phenomenon and scale beyond early adopters, we identified three axes—functionality, reliability, and convenience—on which companies should innovate in order to provide consumers with high utility. Moreover, as biosensing wearables advance across all these three axes, there is significant potential to disrupt not only the consumer electronic markets but also the healthcare markets.
It’s a crowded market, but there’s a growing tail of opportunity for biosensing wearables. We’re also pretty confident this space will continue to develop as tech giants like Apple, Samsung, and Google start playing in the sandbox.
Today, most biosensing wearable companies are responsible for both the hardware and software components of their product, which has created a siloed ecosystem. And it can be daunting for a startup team to master the entire stack. The solution? A platform (though we’re not quite there yet). While a few data aggregators have attempted to become the platform that increases data liquidity, we seem to have simply built more fragmentation on top of the universe of devices.
This is where the tech giants come into play. Both Apple and Samsung have announced health platforms designed to capitalize on their existing consumer scale to attract industry players. If there is a successful scaled platform, this can help overcome the current software challenges associated with fragmentation. Pure software players could define valuable use cases without worrying about choosing a specific type of biosensing wearable. Similarly, hardware companies could build for a specific use case and be able to connect to multiple endpoints through the scaled platform, thereby eliminating the current challenge of having to be a “full stack” company (owning and having to be exceptional at hardware, software, and integration).
Hopefully, this means biosensing wearables will leverage their consumer learnings and evolve into highly functional and accurate devices with applications across the industry. We’re just at the beginning stages.
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