Fitness Wearables Alone Will Not Solve The US Healthcare Crisis: Amazon Winds Down Halo
Amazon announced that it will wind down the Halo product line and services. The company emailed its customers, offered refunds to those who had purchased the device in the past 12 months, suggested that customers recycle their bands, and included a link to a free shipping label.
Fitness wearables such as Halo are popular in the United States: Forrester has found that 33% of US online adults owned one as of 2022. At a minimum, they help consumers track steps. At the higher end, smartwatches from Apple, Google, and Samsung might track heart rate and blood oxygen levels and be able to detect atrial fibrillation, falls, and more (these are engineering feats!).
The Fitness Tracker Market Has Limited Upside — Even If Insurers Give Away Or Bulk-Buy The Devices
Health insurers such as Blue Cross Blue Shield, Kaiser Permanente, and UnitedHealthcare offer discounts on fitness trackers, as well as incentives for using the device. For example, UnitedHealthcare members can earn up to $1,000 per year by using their wearable device to complete health goals and activities. That said, in the overall health and wellness equation, increasing one’s activity is important (say, reaching goals of walking 5,000 to 10,000 steps each day) but is only one element. Consumers also need access to affordable healthcare, food, safety, and more. They also need to be lucky.
Generating profits in the fitness tracker market is difficult because:
- Few companies other than Apple profit from selling consumer devices. Designing, distributing, selling, and supporting consumer devices is expensive: If a consumer purchases an app they don’t like, they just delete it. And consumers can (and do) return devices. It’s also difficult to differentiate fitness trackers and thereby drive margins. Apple, Google, and Samsung differentiate their fitness trackers based on design, services, wristbands, and more. Smartwatches also offer open platforms for third parties. Most fitness trackers are closed.
- Hardware on its own is not enough — the devices need mobile apps and services. Consumers buy (or are given) fitness trackers to achieve goals such as weight loss, heart health, and more. Manufacturers must pair the devices with mobile apps and services that offer insights, nudge consumers to take action, and drive customer engagement. Delivering these services effectively requires ongoing innovation and support — and continued investment for both.
Furthermore, fitness trackers have limited functionality to meaningfully change consumer health because:
- Wearables primarily help consumers, not healthcare providers. The combination of wearables and well-designed services can help consumers achieve their goals, but doctors are more likely to use these devices to suggest treatments rather than make precise diagnoses. Services fueled by algorithms can offer recommendations to consumers, but consumers must act on those. Changing behavior today impacts our wellness in the long term — but behavior change offers little to none of the instant gratification or relief of medication.
- Wearables offer insights but are not based on complete data sets. For example, my fitness wearable may tell me that I have slept poorly, but it won’t tell me why. A complete data set to determine the source of my poor sleep depends on video or processes that replicate video. Additionally, factors such as exercise, food, noise, alcohol, chocolate, stress, comfort, and more play into how well someone sleeps. These are factors far beyond the tracking and analysis capabilities of current fitness wearables.
- Too few consumers have the motivation and resources to change their behavior. Consumers buy wearables to help them make hundreds of better decisions each day to improve their health and achieve their wellness goals. Wearables offer data to help consumers track progress and keep score each day. Few consumers have the motivation to change their behavior, even with the help of data, insights, or suggestions. Therefore, only a small number of consumers will buy, use, and upgrade these devices.
Stay tuned for new research later this year that will build on previous research on wearable devices in healthcare. If you are a subject matter expert in remote patient monitoring or a medical device manufacturer, healthcare provider, or health insurer, please email us — we’d like to speak with you for this research.