Contributed Commentary by Melissa Campos

July 3, 2018 | A number of issues dogged Fitbit’s early steps. There were reports of wild data inaccuracies, device discomfort, and poor durability. 

Negative user experience was also a significant factor. Users complained they gained weight instead of losing it. JAMA (doi:10.1001/jama.2016.12858)  and The Lancet (doi: https://doi.org/10.1016/S2213-8587(16)30284-4) published back-to-back basic studies in 4Q16 which confirmed fitness trackers’ ineffectiveness. The co-author of The Lancet study equated fitness trackers “…to a bathroom scale. They tell you something but don’t give you a strategy for how to change it”. But, even if Fitbits were competent, they still likely would have struggled.

The devices were so unengaging, users took them off and forgot they owned them. About 40% of users abandoned the products within six months. This issue was compounded when multi-functional smartwatches became available, completely overshadowing simple fitness bands.

The overpromises and underperformances of early wearables were quickly reflected in the market. Fitbit’s gross income shrank by 26% in 2017 while one of its main competitors, Jawbone, was completely liquidated in the same year.

Graph 1

The New mHealth Market

Fitbits clearly failed to improve the health of fitness beginners. Initially, however, the devices were marketed to fitness enthusiasts. Though simple fitness bands are essentially obsolete, there is great value in Fitbit’s original intuition—that active people are pre-disposed to integrate health trackers into their daily lives. But a re-examination of the market reveals they aren’t the only ones. Chronically ill users are emerging as the drive behind an mHealth revolution.

The most common and lucrative chronic condition in the mHealth market is diabetes. There are two clear reasons for this. Firstly, diabetes is increasingly prevalent. The World Health Organization estimates there are at least 422 million diabetics worldwide. But more importantly, diabetes is almost exclusively managed through numbers. Every day, diabetics track measurements including blood sugar levels, minutes of exercise, grams of carbs, and units of insulin. The sheer volume of personal data can be daunting to remember, let alone interpret. This is where mHealth can step in.

The mySugr app is the clear leader in diabetes mHealth. It was bought by Roche for reportedly as much as $100 million and is currently the third highest grossing medical app in the Google Play Store.

The app uses a number of tactics to elevate itself beyond its competitors. With an easy-to-use interface, mySugr applies gamification to tasks like data entry, exercise, and glucose monitoring. Fitness apps have also embraced gamification and use it extensively to engage their users. 

But gamification and the recognition chronic illness mHealth don’t tell the whole story. The other major force in the mHealth market is Big Pharma.

Initially, mySugr is a free app. But with the mySugr Bundle, a $40/ month subscription, users are provided with a personal diabetes educator, a new Accu-Chek glucose meter (made by Roche) and unlimited blood test strips (This is a key selling point given that a month’s limited supply of test strips is at least $50 retail.). Finally, the subscription enables the user’s glucose meter to sync data directly to the mySugr app—data which Roche can collect and study.

Where is the mHealth Market Headed Next?

Big Pharma isn’t just influencing changes in mHealth apps. It may reshape the wearables market itself.

This may seem surprising. At first glance, interest in wearables appears to be waning. The global wearables market only grew 10.3% in 2017, significantly down from the 27.3% growth of 2016. But Ramon T. Llamas, research director for IDC’s Wearables team doesn’t see this as a decline. In fact, he sees the opposite. This view makes sense when comparing the 4Q numbers from 2016 and 2017. 37.9 million wearable units were shipped in 4Q17 versus the 35.9 million from the same period of the previous year. Llamas believes that the lower yearly growth percentage is due to the fact that, “…vendors, relying on older models have exit[ed] the market altogether.” Meanwhile, the remaining companies have replaced basic devices with smartwatches that offer more features and are “more integral in people’s lives”.

Fitbit has hung on and adjusted its products and services accordingly. It just released its first smartwatch, the Ionic. This health and fitness centered watch propelled Fitbit’s market share into second place behind Apple.

Graph 2

Top Three Wearables Competitors Successive 4Q Comparison

Apple is clearly dominating the overall smartwatch market. But the mHealth market may be more competitive than the wearables market shares indicate.

The Rise of Fitbit 2.0

Like mySugr, Apple has also partnered with Big Pharma, in this case, DexCom. The DexCom G5 continuous glucose monitor (CGM) uses Apple’s Core Bluetooth to sync data to the Apple Watch via a phone. But, naturally, that phone must be an iPhone.

Enter Fitbit.

They, too, are working with DexCom to sync CGM data to their smartwatches. But this arrangement won’t be exclusive to the iPhone; Androids will also be compatible. This could give Fitbit a considerable edge. Though iPhones are greatly favored in the US, Android phones have upwards of 80% of the market share worldwide. The Fitbit/DexCom system will be available “as soon as possible” in 2018. Initially, CGM data will need a phone to sync to the Ionic. The ultimate goal, however, is to connect the CGM and the watch directly, bypassing phones entirely.

Fitbit may be surging but Apple is determined to stay ahead. They, too, are developing a CGM system with DexCom that won’t require a phone. Apple is also working on a CGM that, unlike current devices, won’t require a subcutaneous implant. But the company acknowledges that these options are years from market.

Going Beyond Glucose

Using mHealth to manage medical conditions isn’t just limited to diabetes. Pacemakers, sleep monitors, and even defibrillators can also sync to phones and smartwatches.

Bluetooth-enabled medical devices also have significant implications for research and diagnostics. Can Bluetooth-collected data provide insights into medication efficacy and drug interactions? Could researchers cross-reference information from multiple platforms to better understand disease comorbidities? The ability to send data out of the body and onto a smartwatch is an important step in individualized patient care. But it could also be a wave of change in how medicine is studied and understood.

Fiona Mischel is the author of this article. Melissa Campos provided additional commentary and editorial guidance.

Melissa Campos is a Senior Associate at DeciBio Consulting. She has served as a strategic adviser to numerous diagnostics and health technology companies ranging from cutting edge start-ups to multi-national industry leaders. She can be reached at campos@decibio.com.