The desire to track and record behavior is nothing new. Journals logging human activity date back to the dawn of the printing press. In the mid-1900s, enhancements to audio recording technology allowed for new forms of data capture, giving rise to tomes of information on figures like Andy Warhol—who recorded more than 4,000 hours of random walks, talks, and art parties—and President Nixon—whose White House tapes created the most comprehensive record of any administration to date (recordings that would, ironically, lead to his impeachment).
The dawn of the digital age has brought the next evolution of self-tracking; one that quantifies human activity and produces more detailed and organized data. Over time, the hope is that systematic analysis of this data will provide insights that improve health outcomes. Wearable devices will play a key role in this effort.
The wearable market today
A vast majority of wearables sold directly to consumers (D2C) are focused on tracking basic physiological metrics for fitness purposes (e.g., heart rate, steps taken). Demand has soared in recent years, with global shipments growing 40% each year since 2015. According to the IDC, almost 400 million individual devices* will be shipped in 2020—the equivalent to more than one device for every human in the U.S.
Leading consumer technology companies have met the bulk of consumer demand. Wearables (and home accessories) accounted for roughly 11% of Apple’s revenues this past quarter—approximately $25 billion on an annual basis. Google acquired Fitbit for $2.1 billion in late 2019, and Amazon launched Halo—their version of a Fitbit—in August 2020. Chinese technology companies Huawei and Xiaomi have also made rapid inroads, accounting for roughly 20% of global shipments by the end of last year.
While the wearables space has witnessed both incredible successes and notable hiccups, the landscape of major players and marquee devices is stabilizing. The underlying technology housed in each device, however, is still developing rapidly.
What’s on the horizon?
While fitness trackers have historically fallen into the lifestyle category, these devices are increasingly being seen as a form of preventative healthcare. This makes sense: if you exercise, track your heart rate, and record your diet regularly, you are arguably less likely to develop chronic medical conditions. However, for the millions of Americans already suffering from illnesses like heart disease, obesity, or diabetes, a fitness wearable becomes less of a lifestyle accessory and more of a necessity.
“A big theme for us is going to be the inclusion of more advanced sensors. So you can envision in the future what really we want to do is get to the point where not only are we addressing lifestyle conditions but more chronic conditions.”
James Park, Fitbit CEO
The cross-pollination between medical-grade devices and fitness wearables is well underway. If you are tracking certain biomarkers for critical medical reasons, there is a minimal incremental cost for a company to let you track the same thing for fitness. For example, glucose levels are an important biomarker for diabetes patients, but they also play a role in stamina for long-distance runners. A wearable that once served as a tool for diabetic patients to monitor critical health information suddenly became a fitness tracker for endurance athletes. Abbott Labs, a maker of diabetes monitoring equipment, followed this route, launching its first glucose monitoring device for athletes in September of this year.
In the wake of the pandemic, social distancing and remote health monitoring have helped expedite the adoption of consumer wearables by medical providers. In June 2020, the U.S. Food and Drug Administration (FDA) released guidance under which the Apple Watch’s electrocardiogram (ECG) app could be used to remotely monitor patients suffering from heart conditions. The app, which received FDA clearance as a medical device in 2018, allows patients to send ECG recordings as PDFs to their health providers.
As “Big Tech” expands the universe of things to track, healthcare systems are gradually catching up. We seem to be approaching a period of hyper-personalized healthcare. The fusion of better hardware and digitization of medical records has the potential to create a seamless transition from an all-in-one device to a cloud data storage system, accessible to you and your medical providers. Of course, regulatory and logistical challenges remain, and privacy and security concerns loom large, but the future of healthcare is looking increasingly customized.
There’s a start-up for that
Early-stage companies are playing a pivotal role in developing new technologies for the wearables industry. We counted 49 private companies that received some form of funding over the past two years.** These companies can be divided into two groups: D2C (selling directly to the consumer) and Enterprise (selling directly to healthcare providers).
Among D2C wearables, most have focused on differentiation within the “General fitness/vitals” categories. Fitbit and Whoop, for example, offer devices for your wrist, whereas Nanowear places sensors in the fabric of your clothes. Some are experimenting with new biomarkers: Nix uses sweat to measure hydration levels, and others are trying to replace the painful pin-prick of blood samples with data from your tear ducts. On the Enterprise side, companies have largely focused on optimizing data analysis, although some are trying to fundamentally alter form factor (e.g. ingestible sensors).
What’s most interesting to us at Allergy Amulet is the long tail of companies tackling more specific conditions with nuanced technology.
Outside of “general fitness/vitals,” the most common focus areas for D2C companies are “mental health” and “sleep quality”: two ailments that rely more heavily on self-reporting. On the Enterprise side, even before the pandemic, companies were focused on cardiac and respiratory issues, as well as diabetes. These areas are indeed critical; heart disease is the number one cause of death in the United States, while respiratory disease ranks fourth, and diabetes seventh.
Owlet is a good example of a company that leveraged new medical technology to alleviate problems related to infant care. Founded in 2012, the company was inspired by a dad’s concern for his family’s history of congenital heart defects and passing the condition on to his newborn. Around the same time, a technology called pulse oximetry emerged and was nearing the end of clinical trials. A pulse oximeter is a clip-on device that hospitals put on a patient’s finger which uses wavelengths of light to measure heart rate and blood oxygen levels. Owlet leveraged this new technology to create an infant sock that doubled as a pulse oximeter. The company has since expanded into other product areas, offering a comprehensive infant monitoring system.
These companies are just the tip of the iceberg when it comes to the future of wearables.
The largest companies in the world are incubating and acquiring technologies at a rapid clip to optimize health outcomes and save lives. Wearables play an important role in that effort. For our part, Allergy Amulet counts itself among the nimble start-ups housing scientific breakthroughs in user-friendly devices, helping to solve painful problems and addressing a huge source of anxiety for millions.
We have come a long way from journaling on parchment paper, and we’re excited to participate in the future.
– Ben and the Allergy Amulet Team
*IDC shipment data includes Apple AirPods
**Based on publicly-available data and desktop research