Whither Wearables

Regular listeners have already surmised this, so I’ll just acknowledge it directly: I am older than dirt. So old, I remember when transistor radios were first introduced. All of a sudden, you could carry tunes in a pocket! It was absolutely amazing!

Now don’t get me wrong. At the time, there were plenty of radios small enough to carry, and a lot of people had them, but the world was still solidly in the era when a good proportion of home electronics were actually pieces of furniture. Most radios and all television sets were still found in massive wooden cabinets.

So yeah, transistor radios were a big deal when they were introduced.

The introduction of wearables feels similarly amazing to me. There are electronic functions that used to be implemented in objects so big you had to have a pocket or a bag for them, but they can now be placed on a wrist-strap, or clip, or even a patch. Marcus Welby MD probably would not have believed it had you told him that someday in the future, doctors would not need patients to actually come in to their offices to get their heart rate or a blood pressure reading, or even more amazing, their blood oxygen level. (For you kids, there’s a link on the podcast episode web page on eetimes.com where you can find out who Marcus Welby was.)

Wearables is already a huge segment of the market, and Yole Développement, an analysis firm based in France, has just published a report that predicts that the world market for just the consumer and medical wearable market segments will keep growing at an 11 percent compound annual growth rate until 2025, when together they’ll be worth about $98 billion.

Jérôme Mouly, Yole Senior Technology & Market Analyst, wrote the report. He keeps track of sensor and actuator technology for Yole. He says smartphone makers are experiencing a slowdown in sales, and that they see wearables as a growth area they can exploit. Here’s our interview with Jerome.

BRIAN SANTO: The title says it’s “consumer and medical,” but I wanted to just ask you to break down the categories for wearables to make sure we that we know what we’re including in the conversation and what we are excluding.

JÉRÔME MOULY: Yes. Correct. You mentioned this new report we recently published, “Wearables for Consumer and Medical Market and Technology Trends.” The different categories we have in this report are first for sure the market segments for medical and consumers. But we also have segmentation by type of wearables. So wrist-worn, head-worn, body-worn and smart clothing. As well, we have the products. The main products, the main wearables existing like smart watches, fitness bands, hearing aids, etc.

BRIAN SANTO: You said there are head wearables, body wearables. You said clothing wearables? Is that right?

JÉRÔME MOULY: Yes. When we say the body wear, for example, what is body wear? Body wear means that we are talking about smart patches, mainly. Smart clothing is I think a bit different because the wearables are put into a garment.

BRIAN SANTO: All right. I think most listeners either have or have seen a FitBit or a smartwatch. When we’re talking about patches, are these mostly for medical monitoring?

JÉRÔME MOULY: Yes. What we have described is that for body patches, we are more related to medical wearables just because those body patches are used to monitor patients. And today if you’re talking about actuality COVID-19 pandemic, it’s one of the major drivers for that. Because for a patient to be monitored at home remotely, it’s key at the moment. Body patches are mainly medical. We can find them more so in consumer applications like, for example, dehydration or hydration monitoring of people doing sports. But it’s not where you have the majority of body patches.

BRIAN SANTO: I’m a little familiar with FitBits, smartwatches. Some of the people who manufacture those smartwatches and other things you wear on your wrist… one of the difficulties they have with the medical sensors that they want to include is that the contact with the person wearing it. Sometimes the sensor isn’t close enough. Sometimes the sensor ought to be in contact. Is that why you want a patch with certain sensors? So that you can actually get close to the skin?

JÉRÔME MOULY: Yes. In a way. But the answer is probably much more complex than that. You’re right about the issue related to the movement from the user on the wrist. And the fact that you use some artifacts related to the movement or the movement on the skin. A body patch could be one answer.

We have to also take into account new types of wearables like the hearables. It could be a new trend. When you think about ear buds, it’s moving less in the ear, in the ear canal, than on the wrist. So solutions are developed to be reliable to have, that can be the most accurate possible. This is one of the solutions.

FitBit, Apple and other companies are also working on how to manage those artifacts. And sensors are at the basis of this. Computing is also at the basis of this. So software is an answer. To put multi power meters and to correct this artifact.

BRIAN SANTO: One of the types of medical devices that are coming… I have heard about blood oximeters, for example, that are beginning to be included. I’ve also heard that people are trying to develop systems that can actually provide an injection, for example, for someone who has epilepsy. They’d be able to perhaps do an injections. Or perhaps if someone is allergic to something, they’d be able to inject epinephrine.

Can you talk about some of the different kinds of medical wearables that are being prepared?

JÉRÔME MOULY: You mentioned something interesting. I would say new wearables, when are talking about new wearables, we are also talking about new functions. Because sometimes the wearables already exist under the form of wristbands, smartwatches, etc. The addition of function. In the medical wearables market, we see at the moment a lot of things related to Sp02 oximetery that you mentioned. Also, the blood pressure monitoring. So the idea is, how to get noninvasive, accurate information. That’s the challenge at the moment.

The new trends, for example the Samsung Galaxy Watch 3 is integrating now this blood pressure monitor that is now competing with the cuff-based systems. But more and more, we are going to electro-chemical devices, electro-chemical sensors. What is in the sweat? What type of analytes can you find in the sweat? What kind of bio markets can you find on the skin? And how to prevent. Because we have to think about the health care system and the transformation of the health care system with the requirement of the cost pressure that is also an important challenge. So to get information as soon as possible is a way to reduce the cost.

Yes, electro-chemical devices, oximetery blood pressure, more and more stress level. You heard perhaps about the emotion trackers like the Holoband. So it’s like the Holobracelet from Amazon. So it’s an emotion tracker. Okay, it’s more on the consumer side, but you have exactly the same kind of wearables for stress level, emotion level.

BRIAN SANTO: That’s fascinating. I was unaware of this. It reminds me of mood rings. Do you remember those from… maybe you’re not old enough. Back in the 1970s they had these mood rings that would turn different colors. They were just basically heat sensors.

When introduced in 1975, mood rings sold for over $100. Within a year,

you could buy one in a bubblegum vending machine for a quarter.

JÉRÔME MOULY: I didn’t know that.

BRIAN SANTO: I imagine there’s much more scientific basis for these.

JÉRÔME MOULY: Yes. At the moment, it’s clearly a consumer device for the emotion tracker. Regarding the stress level and the link to sleep activity, for example, yes. It’s much more on the medical side. The prevention of sleep apnea, for example.

BRIAN SANTO: So when you titled your report and decided to look at consumer and medical wearables, is that because the categories are blurred a little bit? We talk about a FitBit that can also take a look at your SpO2. Smartwatches are beginning to include some of those same sensors. Did you choose the category because they’re already beginning to overlap?

JÉRÔME MOULY: Yes. It’s one of the reasons. Not the only, but one of the reasons. It’s very interesting to look at these two markets that are overlapping, and a lot of questions are raised about that, because we see this overlap mentioned as the consumer health care. It’s like the pharmaceutical approach. The over-the-counter concept. How you can buy medical devices or devices that are not prescribed but that could monitor your health. And it’s a big trend that we can see at the moment. It’s a big trend because people would like to monitor their own health. It’s what we named the quantified self approach.

But people are not patient. They are users. They’re not patients really. What they want is a wearable that is an accessory. They don’t want to have the stigma. That’s perhaps a discussion about the body patches. If you put the body patch on your skin, you can see the wearable and people can ask questions, Do you have problems here with a smartwatch, a fitness band? It’s just a normal accessory. But you can prevent… you can monitor your own health with this, and people like to be part of their own health management now.

To go further, yes, we have other categories or other markets like industrial, like defense, where wearables are used. But we separate this and other reports coming at the beginning of 2021 like a solider of the future, for example. We’ll describe these other wearables.

BRIAN SANTO: Then perhaps we’ll talk to you about that in a couple of months. We’ll have you come back. Meanwhile, with the medical and consumer, as you mentioned, there’s a trend towards the quantitative self, people trying to monitor their own health. But is there a distinction between something like a FitBit or smartphone and a certified medical device? Medical devices are highly regulated, and it’s an interesting challenge for companies making these devices, right?

How does regulation affect this market?

JÉRÔME MOULY: That’s one major point. And how to work on this as this overlap is blurring lines now between medical and consumer. First of all, just to explain how we are doing this and how we took into account this in our market.

It was really important to give definitions. Our main definition: What is a medical wearable? You have in front of you a real medical device. So as you mentioned, it’s a device that is cleared by the FDA or receives the C marking as a medical device. We consider also the consumer devices that have a medical function, but the main purpose of those devices is consumer. So like the Apple watch, we decided to put the Apple watch in the consumer market, even if a function like ECG is cleared by the FDA. But the exercise is more and more challenging, because more and more devices are integrating cleared functions, FDA-cleared functions. So that’s clear.

It’s a key trend to have more and more health functions and health sensors integrated. And the device manufacturers are integrating more and more what we can name medical-grade sensors in their wearables, even if they are consumer-oriented.

BRIAN SANTO: You mentioned some of the vendors now. How do you break down the vendors in your report? Do you break them down by the companies that make the final product? And do you also break down their suppliers, the sensor manufacturers, those that make the components?

JÉRÔME MOULY: Exactly. We did both exercises. First, the end systems. So the OEM manufacturers of wearables. From medical to consumer markets. And we also have the sensor players. So the companies that are providing the sensors integrated in wearables.

BRIAN SANTO: Do you identify any of the companies that are best positioned to take advantage of these markets?

JÉRÔME MOULY: Oh clearly. First, the consumer electronics manufacturers. But there are very large numbers of companies. And I would say especially the smartphone companies. Smartphone companies are really well positioned in this market.

Most of them are already now developing the next solutions for wearables. First of all, we are at a level of certain maturity in the smartphone market. And now we have to think about the wearable market that we forecast at nearly $100 billion. It’s more than an 11 percent growth rate in the next five years, compound annual growth rate. So it’s much more than the two to three percent of the smartphone market. So it’s really leveraging their market at the moment, their revenues.

If you look at the trends… I mentioned hearables. Hearables is the new wave of wearables. And all the smartphone makers are now in the hearable market with ear buds. And that’s why, in our top three or four, we have smartphone manufacturers in the ranking. Apple leading this with about 40 percent of the market share.

BRIAN SANTO: Is there opportunity for companies that make traditional medical equipment? Are those companies likely to prosper in the wearables market?

JÉRÔME MOULY: I would say until two or three years ago, yes. Some companies were competing on the same type of wearables like smartwatches, coming from really the medical device market, really medically oriented. At the moment it’s quite clear that the consumer market is gaining share in this market because of what I explained before, because most of the users are not patients but more users taking care of their own health.

However, we can see a trend. All those manufacturers I mentioned, companies like Medtronic, Philips, Omron, Dexcom. Those companies working on different kinds of wearables. For example, Medtronic and Dexcom on the continuous glucose monitoring. They are really on the side of the medical market, because their wearables are vital for people. So keep the clinical markets in their hands. And probably it’s where the consumer market will not go. Because you are going to very strict regulations where consumer players will not go, or few of them could go. But not all of them.

BRIAN SANTO: So there are strict regulations in terms of medical devices. There are also some jurisdictions, some places have concerns and regulations about the privacy of the data itself. Do those concerns affect the market? Do they play into the projections that Yole developed about the wearables market?

JÉRÔME MOULY: Regarding the process, we are doing analysis. We are interviewing different companies from the sensor to foundries and system makers. This never came to us as a possible bottleneck. And if you refer to the information we have published regarding the last report we get on wearables in 2015. And now we can see that this wearable market is growing by 20 times. So it does not appear that wearables or privacy, etc. issues are a challenge for the wearable markers.

BRIAN SANTO: Do you have any wearables yourself? What electronics do you wear?

JÉRÔME MOULY: I don’t have my smartwatch on my wrist at the moment, but I have a FitBit and also you probably know the history with Nokia, so those kinds of smartwatches or fitness bands. I get it. Now with things, for example, yes.

BRIAN SANTO: So are you prepared to start monitoring your own blood oxygen levels?

JÉRÔME MOULY: Not with what I have at the moment, but yes. Why not? It’s clear that more and more wearables are not just giving users raw data, but data that are processed and data that you can use like coaching or alerts. More and more, those data are accurate and reliable. It’s perhaps not a real medical device, but what you know is, if you see some difference coming from your monitoring, something that attracts your attention, you can’t say that you’re sick or that you have an issue, but it’s just an alert to say, Hey, Go to the doctor! It’s time to go. So that’s why it’s interesting.

BRIAN SANTO: It was a pleasure speaking with you today. Thank you very much.

JÉRÔME MOULY: Thank you, Brian.

BRIAN SANTO: That was Jérôme Mouly, Analyst at Yole Développement. Yole’s report on wearables is called, “Wearables in Consumer and Medical Applications 2020,” and it is available from Yole.

We didn’t get into this in our conversation, but the consumer and medical markets that Yole tracks in its report includes smart clothing. Ten years ago, that was mostly about musicians on stage wearing costumes that lit up. These days, you’re more likely to hear about “e-textiles” that incorporate biometric sensors.

Other applications might include controlling heating elements in winter wear.

Some companies are looking into weaving antennas for local area networking directly into the fabric of your clothing.

And of course, no one’s given up on clothing that simply lights up, and hooray for that. I would buy a Jenny Holzer tee-shirt. For you kids, there’ll be a link on the web site that should explain that one, too.