the wearable health revolution - soreon … wearable health revolution how smart wearables disrupt...

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THE WEARABLE HEALTH REVOLUTION HOW SMART WEARABLES DISRUPT THE HEALTHCARE SECTOR

October 2014

Soreon Research Report 1st edition

Report Extract Original Report with 204

pages plus comprehensive data appendixes

THE WEARABLE HEALTH REVOLUTION | 2 THE WEARABLE HEALTH REVOLUTION | 2

CONTENTS 1.0 EXECUTIVE SUMMARY 5

2.0 TOP-30 MOST DISRUPTIVE COMPANIES/PRODUCTS 8

3.0 THE HEALTHCARE REVOLUTION AND ITS IMPLICATIONS 9 3.1 SMART WEARABLES DISRUPT THE HEALTHCARE MARKET 9 3.2 WHAT IS A SMART WEARABLE? 10 3.3 VALUE PROPOSITION OF SMART WEARABLES 11 3.4 MARKET SIZE AND GROWTH OF SMART WEARABLES 12 3.5 WHAT IS THE RIGHT PLACE ON THE BODY FOR SMART WEARABLES? 13 3.6 WHERE ARE TOP 30 COMPANIES LOCATED? 15 3.7 WHAT ARE THE SUCCESS FACTORS OF SMART WEARABLES? 16 3.8 KEY CHALLENGES 17 3.9 TOP 10 RECOMMENDATIONS TO SUCCEED WITH SMART WEARABLES 18

4.0 METHODOLOGY 20 4.1 SELECTION OF PATIENT GROUPS 20 4.2 IDENTIFICATION OF BEST PRACTICE PROFILES 21

4.3 BEST PRACTICE PROFILES EVALUATION PROCESS 22 4.4 BEST PRACTICE PROFILES 23 4.5 DISRUPTIVENESS RANKING 24 4.6 MARKET SIZE AND GROWTH 26 4.7 INDUSTRY DATABASE 26

5.0 DIABETES – THE QUEST FOR NON-INVASIVE MONITORING 27 5.1 DEFINITION AND MARKET OVERVIEW 27 5.2 MARKET SIZE FOR SMART WEARABLES 28 5.3 GROWTH DRIVERS AND SUCCESS FACTORS 29 5.4 FREESTYLE LIBRE FLASH 30 5.5 BEST PRACTICE PROFILE: XXX 33 5.6 BEST PRACTICE PROFILE: XXX 36


6.0 SLEEP DISORDER – SLEEP MANAGEMENT GOING MAINSTREAM 40

6.1 DEFINITION AND MARKET OVERVIEW 40 6.2 MARKET SIZE FOR SMART WEARABLES 41 6.3 GROWTH DRIVERS AND SUCCESS FACTORS 42 6.4 BEST PRACTICE PROFILE: XXX 43 6.5 BEST PRACTICE PROFILE: XXX 47 6.6 BEST PRACTICE PROFILE: XXX 51

7.0 OBESITY – PREVENTIVE ACTION IS TAKING OVER 54 7.1 DEFINITION AND MARKET OVERVIEW 54 7.2 MARKET SIZE FOR SMART WEARABLES 55 7.3 GROWTH DRIVERS AND SUCCESS FACTORS 56 7.4 BEST PRACTICE PROFILE: XXX 57 7.5 BEST PRACTICE PROFILE: XXX 60 7.6 BEST PRACTICE PROFILE: XXX 63

8.0 CARDIOVASCULAR DISEASE – EXPLODING MARKET FOR NEW DEVICES 66

8.1 DEFINITION AND MARKET OVERVIEW 66 8.2 MARKET SIZE FOR SMART WEARABLES 67 8.3 GROWTH DRIVERS AND SUCCESS FACTORS 68 8.4 BEST PRACTICE PROFILE: XXX 69 8.5 BEST PRACTICE PROFILE: XXX 73 8.6 BEST PRACTICE PROFILE: XXX 76

9.0 IN-HOSPITAL MONITORING – VARIOUS PLAYERS PUSHING INTO THE MARKET 79

9.1 DEFINITION AND MARKET OVERVIEW 79 9.2 MARKET SIZE FOR SMART WEARABLES 79 9.3 GROWTH DRIVERS AND SUCCESS FACTORS 80 9.4 BEST PRACTICE PROFILE: XXX 81 9.5 BEST PRACTICE PROFILE: XXX 85

10.0 GERIATRIC CONDITION/PERS – PERSONAL SAFETY IN ANY PLACE 88

10.1 DEFINITION AND MARKET OVERVIEW 88 10.2 MARKET SIZE FOR SMART WEARABLES 89 10.3 GROWTH DRIVERS AND SUCCESS FACTORS 90 10.4 BEST PRACTICE PROFILE: XXX 91 10.5 BEST PRACTICE PROFILE: XXX 94


11.0 ASTHMA – NEW POSSIBILITIES FOR PRO-ACTIVE MONITORING 98 11.1 DEFINITION AND MARKET OVERVIEW 98 11.2 MARKET SIZE FOR SMART WEARABLES 99 11.3 GROWTH DRIVERS AND SUCCESS FACTORS 100 11.4 BEST PRACTICE PROFILE: XXX 101 11.5 BEST PRACTICE PROFILE: XXX 104 11.6 BEST PRACTICE PROFILE: XXX 107

12.0 ALZHEIMER’S – DIFFERENT ATTEMPTS FOR GEOLOCATION 110 12.1 DEFINITION AND MARKET OVERVIEW 110 12.2 MARKET SIZE FOR SMART WEARABLES 110 12.3 GROWTH DRIVERS AND SUCCESS FACTORS 111 12.4 BEST PRACTICE PROFILE: XXX 112 12.5 BEST PRACTICE PROFILE: XXX 115 12.6 BEST PRACTICE PROFILE: XXX 119

13.0 EPILEPSY – EARLY DETECTION AS A GAME CHANGER 122 13.1 DEFINITION AND MARKET OVERVIEW 122 13.2 MARKET SIZE FOR SMART WEARABLES 122 13.3 GROWTH DRIVERS AND SUCCESS FACTORS 123 13.4 BEST PRACTICE PROFILE: XXX 124 13.5 BEST PRACTICE PROFILE: XXX 127

14.0 OTHERS – SUCCESSFUL SOLUTIONS FOR VARIOUS PATIENT GROUPS 131

14.1 OVERVIEW OF ADDITIONAL USE CASES FOR SMART WEARABLES 131 14.2 BEST PRACTICE PROFILE: XXX 132 14.3 BEST PRACTICE PROFILE: XXX 137 14.4 BEST PRACTICE PROFILE: XXX 140 14.5 BEST PRACTICE PROFILE: XXX 144 14.6 BEST PRACTICE PROFILE: XXX 146 14.7 BEST PRACTICE PROFILE: XXX 149

15.0 INDUSTRY DATABASE 152 16.0 RESEARCH TEAM 203 17.0 DISCLAIMER 204 IMPORTANT NOTICE AND DISCLAIMERS 204


1.0 EXECUTIVE SUMMARY >> Mobile devices, smart algorithms and the existence of huge, easily accessible health databases are disrupting the health industry and shifting the balance of power. Technology is taking over the measurement of the human body with sensors that continuously, conveniently and precisely measure variables such as body temperature, pulse rate, blood pressure, ECG, blood sugar, blood oxygen, sleep patterns and many more variables. Soreon Research calls these systems (hardware with underlying software and databases) Smart Wearable Healthcare Systems. <<

In this way, smart wearable healthcare systems can determine the health situation or detect diseases/medical issues in individual patients. Even the slightest deterioration or improvement of a certain condition can be recorded, monitored and used to trigger medical interventions. The most important trends of this transformation are:

□ The focus of healthcare will shift from disease treatment to prevention, as the convenient and continuous monitoring of the human body will detect early warning signs.

□ Future medical care will be highly personalized, compared to the “one size fits all” approach we are seeing today.

□ The importance of medical standards will vastly increase, based on the intelligent interpretation of continuously measured physiological data of a large number of individuals.

□ New players will change industry dynamics. Software and hardware companies are playing an increasing role in the medical field, thereby challenging the established relationship among patients, doctors and hospitals.

Today, we are at the mere beginning of this deep transformation of the healthcare sector. Even as we write this report, new technologies are being developed by hundreds of start-ups and established medtech companies. However, heavy regulation of the healthcare industry and the inherent conservatism of many healthcare professionals will somewhat hinder the adoption of these new technologies. The penetration of smart wearable healthcare technology will take years, even decades in some cases. However, the ubiquity of mobile devices and networks – even in the remotest areas of the world – and consumers’ growing savviness about mobile technology are pushing the adoption of these technological innovations.


Smart wearable healthcare market growing exponentially to more than USD 40 billion

Today, the global size of this market (devices, software and directly linked services) is estimated at around USD 2 billion. By the year 2020 this market is estimated to reach USD 41 billion. This equals a compounded annual growth rate of 65%. Diabetes, sleep disorders, obesity and cardiovascular diseases are the biggest growth segments in this market. The main driver of growth is the rapidly increasing rate of these medical conditions around the world, especially in emerging markets; as the population is aging, people are reaching higher income levels and changing their diets and physical activities accordingly. A second growth driver is the availability of mobile technology itself, which is able to measure, conveniently and cheaply, many of the critical variables that are directly associated with such lifestyle-related conditions as obesity, diabetes and cardiovascular disease.

Top 30 companies that are developing the most disruptive wearable healthcare technology

Our analysts at Soreon Research cast their nets widely and analyzed more than 200 development projects/products in the area of smart wearable healthcare worldwide. Thirty companies were selected as having developed the most revolutionizing and game-changing technologies. Based on nine criteria in the areas of innovation power, market potential and enabling factors like funding and team expertise, our analysts have ranked these companies with regard to their “„disruptiveness potential“.

Worldwide the three most disruptive smart healthcare companies/solutions are:

□ Rank 1 (shared): Jawbone / Up24 (16 points out of a maximum of 25): (… more in full report)

□ Rank 1 (shared): Abbott Laboratories/FreeStyle Libre Flash (16 points): (… more in full report)

□ Rank 3: Google/Smart Contact Lens Project (15 points): (… more in full report)

The top 30 providers of smart wearables come from 10 different countries. (… more in full report)


No time to lose for the healthcare industry

Learning from these most promising and successful projects, our analysts have developed an extensive list of recommendations for companies that are planning to enter or already competing in the smart wearable markets. The following five recommendations reveal the essence of our discoveries:

□ No time to lose. (… more in full report)

□ Focus is the key to success. (… more in full report)

□ Get a cross-industry team on board. (… more in full report)

□ Clinical improvement AND cost reduction. (… more in full report)

□ Ease of use. (… more in full report)


2.0 TOP-30 MOST DISRUPTIVE COMPANIES/PRODUCTS

Rank 2014

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1 Jawbone UP24 16 …

1 Abbott Laboratories

FreeStyle Libre Flash

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3 Google

Diabetes Contact Lens

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4 … … 14 2 2 1 1 2 2 2 1 1

6 … … 13 2 1 1 1 2 2 1 2 1

6 … … 13 3 0 1 2 1 1 2 2 1

6 … ... 13 2 0 1 1 2 2 2 2 1

6 … … 13 2 2 1 1 1 2 2 1 1

10 … … 12 2 1 1 1 1 2 1 2 1

10 … … 12 3 0 1 2 1 1 1 1 2

10 … … 12 2 1 1 2 2 2 1 1 0

13 … … 11 3 0 1 2 1 1 1 1 1

13 … … 11 2 1 0 1 1 1 2 2 1

15 … … 10 3 0 0 2 0 0 2 2 1

15 … … 10 2 0 2 0 1 0 1 2 2

15 … … 10 1 2 1 0 1 2 1 1 1

15 … … 10 1 2 1 0 1 1 1 2 1

15 … … 10 1 1 1 2 1 1 1 1 1

15 … … 10 1 1 1 1 1 1 1 2 1

15 … … 10 1 1 0 1 2 2 1 1 1

22 … … 9 1 1 1 0 1 2 0 2 1

22 … … 9 1 1 0 1 1 0 2 2 1

22 … … 9 2 1 1 1 2 0 1 1 0

22 … … 9 2 0 1 1 0 0 3 2 0

22 … … 9 1 1 0 0 2 2 1 1 1

27 … … 8 2 1 0 1 1 0 1 1 1

27 … … 8 1 1 1 1 1 1 1 1 0

27 … … 8 3 0 0 1 1 0 1 1 1

30 ... … 6 1 0 0 1 1 0 1 2 0 AVERAGE 11.0 1.9 0.8 0.7 1.1 1.3 1.2 1.5 1.6 0.9


3.0 THE HEALTHCARE REVOLUTION AND ITS IMPLICATIONS

3.1 SMART WEARABLES DISRUPT THE HEALTHCARE MARKET

The current pace of technical innovation is unprecedented. Within two decades, virtually everybody in the world has come to own a mobile phone, even in rural areas of developing countries. Leading companies such as Blackberry and Nokia imploded within short periods of time, as they failed to anticipate new technologies. Major improvements in sensor technologies, continuous access to the Internet and big data analytics are now transforming many aspects of our lives.

This trend will hugely impact our healthcare systems: (… more in full report)


3.2 WHAT IS A SMART WEARABLE?

Wearable technologies in medicine are nothing new: eyeglasses were invented in the 13th century, and millions of people around the world are wearing hearing aids. Smart wearables build on these technologies. However, unlike conventional wearables, many of them include physiological sensors and are connected to the Internet. This connection opens up a wide variety of use cases, based on large databases and almost unlimited processing power.

While smart wearables are hardware-based, they include a software-based back-end. In fact, this is where the value is created. Connection between the device and the back-end is frequently made via mobile phones. In some cases, smart wearables access the Internet directly via mobile phone or Wi-Fi technology, while in other cases they require a dedicated device for data upload.

(… more in full report)


3.3 VALUE PROPOSITION OF SMART WEARABLES

Smart wearables have four key benefits for patients, healthcare professionals and the wider health system:



3.4 MARKET SIZE AND GROWTH OF SMART WEARABLES

The annual market volume for smart wearables will grow from USD 2 billion in 2014 to USD 41 billion in 2020 (compound annual growth rate (CAGR) of 65%).



3.5 WHAT IS THE RIGHT PLACE ON THE BODY FOR SMART WEARABLES?

There are various places on the body where smart wearables can be placed:



3.6 WHERE ARE TOP 30 COMPANIES LOCATED?

The top 30 providers of smart wearables with the highest potential for innovation were selected as best practice profiles by our analyst team (see chapter 4.2) and come from 10 different countries.



3.7 WHAT ARE THE SUCCESS FACTORS OF SMART WEARABLES?

Various factors will contribute to the future success of smart wearables in the healthcare space:



3.8 KEY CHALLENGES

Despite the outlined future growth potential of smart wearables, there are considerable challenges to overcome:



3.9 TOP 10 RECOMMENDATIONS TO SUCCEED WITH SMART WEARABLES

Soreon Research has analyzed more than 200 development projects in the field of wearable technologies, both in the start-up scene as well as with big corporates. As tech giants like Apple and Samsung, as well as hundreds of nimble start-ups, are gearing up their efforts in smart wearable healthcare, this opportunity must be high on the agenda of every healthcare executive. Bystanders and laggards will be steamrolled by a wave of technological innovation as never witnessed before. The following list of recommendations provides the essence of our learnings with regard to making smart wearables a success:



4.0 METHODOLOGY 4.1 SELECTION OF PATIENT GROUPS

This study analyzes the development and evolution of smart wearable technology in healthcare for ten patient groups. The ten selected patient groups represent the largest such groups in the context of smart wearable healthcare systems.

Each patient group is discussed separately in this report, which presents a working definition, market overview, market size 2014-2020, growth factors and three best practice profiles for each patient group. The patient groups included in this report are:

□ Diabetes

□ Sleep disorder

□ Obesity

□ Cardiovascular disease

□ In-hospital monitoring

□ Geriatric condition/ PERS

□ Asthma

□ Alzheimer’s

□ Epilepsy

□ Others

‘In-hospital monitoring’ is not a medical condition in itself but rather a major field in healthcare in terms of cost factor and the excellent opportunity for smart wearables to be a game changer. To represent the breadth of available solutions, one group was labelled ‘Others’- where we included all solutions that do not fall within the other segments.

Within every patient group our analysts researched the most relevant use cases. Use cases are defined as possible applications of smart wearables within a patient group. Use cases can be monitoring, diagnosing or treating a medical condition with a smart wearable. Examples are detection of asthma through acoustical monitoring of wheeze (one of the major symptoms of an asthma attack), where the monitoring is the use case and wheeze is the proxy for the asthma attack.

The majority of applications fall in the category of monitoring, followed by diagnosing and treatment as the least represented group. In some cases one product may cover more than one use case, for example Pancreum, a wearable artificial pancreas (see chapter 7.5) that integrates both a sensor for monitoring blood glucose levels and an insulin pump for the treatment of low level blood glucose.

In the best practice profiles this report presents example products for the different identified use cases.


4.2 IDENTIFICATION OF BEST PRACTICE PROFILES

Our main focus in the identification of best practice profiles is threefold: giving an overview of the available applications on the market, identifying the most innovative players in the industry and providing a truly global picture of vendors of smart wearable tech in healthcare. We have applied the following definition criteria for smart wearables:

□ Wearable device: the device should be wearable on the body, in terms of size and supportive material. Small portable devices may be included if they can be worn in a pocket near the body. The device is therefore neither bulky nor implanted into the patient’s body.

□ Continuity of wearing: the device can be used over a longer period of time, for continuous measurements. Singular applications, such as taking a single sample, are not included.

□ Medical purpose rather than lifestyle: the product is for a clear medical purpose rather than for wellness or fitness needs.

□ Connectivity: the device is connected to the Internet, cloud or software that enables the analysis of measurement data in real time or once connected to the receiver device.



4.3 BEST PRACTICE PROFILES EVALUATION PROCESS

Once the best practice profiles were selected, they were integrated into a profile and ranked against a set of criteria. The evaluation of the wearable healthcare solutions chosen for inclusion in this report took place in August and September 2014.

Each best practice profile was analyzed independently by two analysts, and the analysis and evaluation were repeated after an interval of six weeks. Given the quantity of information that had to be analyzed, the possibility of overlooking some information in individual cases cannot be ruled out.

The initial information gathering phase of our research included data sources like the company website and reports, user guides as well as secondary data such as newspaper reports, specialist publications and professional reviews of wearable healthcare technology. Our analysts have reviewed all written material as well as images and video files, and last but not least clinical studies that were publicly accessible. The bulk of the information gathered was provided by the company or specific product websites. Marketing materials and product videos were subjected to careful analysis to elicit as much ‘hard’ data about the solutions as possible.

All the companies in this report were provided with a questionnaire one month in advance of the publication of the report in order to further clarify all aspects of their products. The questionnaire is accessible in the data appendix of this report.


4.4 BEST PRACTICE PROFILES

Each of the best practice profiles consists of these building blocks:

□ Company profile: basic data such as founding year and headquarters and a brief descriptive company profile

□ Key product information: price, use case and required regulatory approval as well as unique selling proposition

□ Use case: table listing criteria connected to use case and user experience

□ Hardware: table listing all hardware data

□ Software: table listing all software data

□ Review: discussion of the main benefits and market position of the product

□ Future potential improvements/key challenges: bullet points presenting the most important challenges for the future of product development and market entry



4.5 DISRUPTIVENESS RANKING

The disruptiveness ranking aims to rate all best practice profiles in three core parameters: innovation, enablers and market potential. All best practice profiles were tested against nine criteria in these core parameters. They could achieve up to a maximum of 20 points. Whether a best practice profile achieved a higher or a lower score for one criterion depended on the degree to which it fulfilled the criterion as described. For each criterion a description of the different valuation and its meaning are available.

In the final category of the ranking criteria, our analysts estimated the market potential of each best practice product. Market potential was estimated based on the number of patients in a specific area, multiplied by the annual cost of a suitable smart wearable and available income/number of people who can potentially afford it.

INNOVATION

Novelty/disruptive potential of idea


Degree of implementation (… more in full report)

Decrease of cost (… more in full report)

Protection from competition (… more in full report)


ENABLERS

Team (… more in full report)

Financing (… more in full report)

MARKET

Market potential (… more in full report)

Market growth (… more in full report)

Ease of market penetration (… more in full report)



4.6 MARKET SIZE AND GROWTH

For each patient group our analysts estimated the potential size of the market for the period 2014-2020. The starting point is an in-depth study of today’s market size for each specific patient group. Based on this, our analysts calculated projections on growth and market development. This was done considering the specific patient group, evolution of available technologies, reimbursement in key markets and other relevant input factors (see appendix “Market Sizing Model”, Excel spreadsheet).


4.7 INDUSTRY DATABASE

The initial long-list of companies from which our analysts chose the best practice profiles integrates a large number of smart wearable manufacturers, research projects and vendors. The complete list with company headquarters, description of the core business, website and patient group has been integrated into the industry database. This database concludes the report and can be found in the last chapter of this paper. Additionally, the database is accessible in an ‘Industry database’ file that is included as a data appendix for this report.



16.0 RESEARCH TEAM Koenig, Pascal

- Research Director -

Pascal is responsible for medtech industry insights and market sizing. He has more than ten years of experience in the field of wearable health technologies. In the past, he built up a company offering a wrist-based emergency system, a telemetry company, and a research company in the field of smartwatches. Before focusing on wearable technologies, he worked as a product manager at medtech company Synthes (now part of Johnson&Johnson) and as a business consultant at McKinsey. Pascal has studied at the University of St. Gallen / Switzerland and Columbia Business School in New York.

Elsler, Laura

Analyst -

Laura has researched the industry landscape of wearable health technology. She contributes to this report with analytical experience and knowledge of disruptive technologies. Generally her research focus lies on the disruptive impact of wearable technologies in the health sector. She specializes in wearable technologies, eHealth and medtech industry developments. Prior to this, she worked in research for a financial research company, a non-profit organisation in Asia and in communication strategy development for a German accountancy office. She holds a B.A. in Asian Studies and Management from University of Applied Science Konstanz (Germany).

Binder, Steffen

- Research Director -

Steffen has provided strategic and methodological guidance throughout this report. He contributed with knowledge about new and disruptive technologies for the consumer markets. In his daily work he is responsible for creating and developing powerful concepts, methodologies and relevant content to help our clients navigate a rapidly changing digital environment in the health care sector. Prior to this, Steffen was Managing Director of Forrester Germany, Switzerland and Austria, responsible for leading all analyst teams and setting the research agenda with a focus on the impact of disruptive technologies on various industry sectors.

-


17.0 DISCLAIMER IMPORTANT NOTICE AND DISCLAIMERS

Soreon Research

Soreon Research is a Trade Mark of MyPrivateBanking GmbH, Switzerland. All rights to this report are property of MyPrivateBanking GmbH.

Disclaimers

There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth in this report. MyPrivateBanking GmbH will not be liable to you or anyone else for any loss or injury resulting directly or indirectly from the use of the information contained in this report, caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in this report.

Conflict of Interest

Research Director Pascal Koenig has been involded in establishing and building up Limmex AG. The company is featured as best practice case study in this report. To ensure the unbiased and objective evaluation of the product and the company, an independent analyst has been responsible for profile and benchmarking of Limmex.

Copyright

MyPrivateBanking GmbH’s Products are the property of MyPrivateBanking GmbH, Switzerland, and are protected by Swiss and international copyright law and other intellectual property laws. Customers are prohibited to copy, forward or store MyPrivateBanking Products outside of the legal entity that has made the purchase.

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