Wearables – Not first class

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Medical device makers have more time to save themselves

• Amid a rather muted first day at CES came the news that another class action lawsuit has been filed against FitBit alleging that its heart rate monitors are dangerously inaccurate.
• While I think that this lawsuit is somewhat capricious, it highlights accuracy as one of the most important issues that limits the appeal of wearable devices for health and sports monitoring.
• FitBit even admits this in its response to the lawsuit highlighting that its devices are not “intended to be medical or scientific devices.”
• Consequently, the medical device industry that sells products for many thousands of dollars can breathe a collective sigh of relief for now.
• While this lawsuit is unlikely to go anywhere, it creates bad PR which combined with a lukewarm reception for its new sports watch, Blaze, sets FitBit up for a difficult 2016.
• My position continues to be that inaccurate health data is bad at best and dangerous at worst.
• It also highlights that single pieces of biometric data are of little value in isolation and that a combination of measures are likely to be required to get any data that is of any real value.
• This is why Apple’s HealthKit API is so important.
• HealthKit will allow Apple to put together data from a range of wearable devices and sensors while the device makers themselves will only have the data from their individual devices.
• This is another case of the whole being much greater than the sum of the parts and I think that HealthKit is intended to be a major long term differentiator for Apple.
• However this requires for all of these devices to become much more accurate and reliable.
• Currently, wearables are good enough to monitor biometric data for recreational and basic fitness uses but nothing more.
• This makes a wearable nice to have but it still means that there is no burning reason why a user must have one of these devices.
• This has been echoed in Apple stores, where the Apple Watch tables are the least visited and the most asked question is “why should I buy one?”
• In the long term, wearables are likely to be an important part of the ecosystem once everyone has figured out a use case that makes them a must have.
• Until then they are a solution looking for a problem and likely to remain in the realm of early adopters, techies and the Apple fan base.
• Hence, I don’t see wearables having a meaningful financial impact on any of the ecosystem players in 2016, although it is clear that all players are preparing for a time when they will.