Proving the Business Case for the Internet of Things

Clinical devices to spur revenue growth in mobile health sector: Lux

Iain Morris
July 9, 2014
The market for mobile health devices is expected to generate $41.8 billion in revenues in 2023 – eight times as much as in 2013 – according to a new study from Lux Research, with demand for clinical devices surging from 2018 onwards.

Although growth in the market for consumer devices is currently stronger, the clinical devices sector is likely to emerge as the long-term winner, according to the market-research company.

Adoption of vital signs monitoring and in vitro diagnostic devices will be largely responsible for driving revenue growth in the clinical devices industry.

One reason for the current lag in the clinical devices market is the slow start caused by regulatory approval barriers, says Lux, but this sector looks set to generate as much as $16 billion in revenues in 2023, up from just $372 million in 2013.

Over the same period, revenues in the consumer market will grow from $2.5 billion to $7 billion, says Lux.

“Consumer devices have seen a lot of hype but clinical devices will surpass their consumer counterparts in revenues by 2020, helped by value-added software services and generally larger revenue streams,” said Nick Kurkjy, a Lux Research associate.

“Clinical markets will be able to pay much more for comparable services, especially if a device is able to reduce patient recovery times or readmission rates, which can lead to outsized cost savings for the health care provider,” he added.

Among the report’s other findings is that in vitro diagnostics and vital signs monitoring will account for 75% of the mobile health device market by 2023 in terms of revenues.

Lux also notes that vertical integration is coming, as large players from the electronics and medical device industries start to make acquisitions.

Covidien’s (Dublin, Ireland) purchase of Zephyr Technology (Annapolis, MD, USA) and Intel’s (Santa Clara, CA, USA) acquisition of Basis (San Francisco, CA, USA) are among the most recent moves.
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