With sales down in the health devices category, this company is seeking to stand tall.
Wearable health care devices were all the rage not too many years ago.
But sales are down, and many companies that soared are experiencing trouble. The writing was on the wall when the explosion of devices between 2012 and 2014 started to drop off or stop being supported. I have a Misfit Shine that barely exists on the market these days. Nike got rid of Feulband, and others have fallen by the wayside. Some players survived by finding a niche, such as Fitbit and Withings, though both companies now have their own troubles.
Take Withings, a French-based startup. It was purchased by Nokia in April 2016 for $191 million, which then rebranded it Nokia Health. Nokia had been aiming to get into the digital-health market and was hoping to take the suite of devices that Withings had to a broader market. Withings had several wearables to track activity, including a Bluetooth blood pressure cuff, a temperature measurement device, and a weight scale. However, sales did not take off, and there were rumors that the division was losing money. That brings us to the beginning of May, when Nokia said it planned to sell the technology back to Withings' former co-founder.1
This was not exactly a big success story, especially for a technology suite with approval from multiple health agencies that has been used in several clinical studies to some success. But, like all things in the digital health market, many companies that were once big are now struggling.
Back to Fitbit. The company has come far for a hardware company that was originally focused on the consumer market. Known for its fitness trackers, the company filed for an initial public offering in 2015 and had been treading water. But the stock has fallen to about $5 a share from $50 a share in 2015. Fitbit has been trying to lock down the wellness market and persuade employers to use its devices and platform to increase health and wellness at their companies, but even that has been a struggle.
Recently, Fitbit said it is partnering with Google's new Cloud Healthcare application programming interface to get the data collected from the company into health care professionals' hands.2
As Gregory Moore, MD, PhD, vice president of health care at Google Cloud put it, “At Google, our vision is to transform the way health information is organized and made useful ... By enabling Fitbit to connect and manage key health and fitness data using our Google Cloud Healthcare API, we are getting 1 step closer to this goal. Together, we have the opportunity to deliver up-to-date information to providers, enhancing their ability to follow and manage the health of their patients and guide their treatment.”
It would be novel if clinicians could track patient activity via electronic health records. Imagine, for instance, that practitioners could see how well patients were sleeping and use that data for sleep therapy (eg, prescribing medications or other intervention?) or for diseases that rely on health modification for treatment, such as diabetes. It is a nice thought, and Fitbit is trying to make that case.
Would Google acquire Fitbit if this pans out? Google has not exactly been a hardware company, but if this works, it could empower the company in the health market. But there are other considerations. The wearable-tracker market is quite siloed. Why have an activity tracker, when we can get a smartwatch that does the same thing? This is especially true when it comes to companies such as Apple that are pushing the health limits of its devices. This includes tracking heart rhythms to spot arrhythmias and possibly monitoring blood glucose or pressure in the future. If that pans out, Fitbit and any other device company with fitness as its sole business model may stand to fail.
1. Vincent J. Nokia is selling its digital health business back to the co-founder of Withings. The Verge. theverge.com/2018/5/2/17310378/nokia-selling-withings-digital-health-business-eric-carreel. Published on May 2, 2018. Accessed May 15, 2018.
2. Fitbit and Google announce collaboration to accelerate innovation in digital health and wearables [news release]. San Francisco, California: Fitbit; April 30, 2018. investor.fitbit.com/press/press-releases/press-release-details/2018/Fitbit-and-Google-Announce-Collaboration-to-Accelerate-Innovation-in-Digital-Health-and-Wearables/default.aspx. Accessed May 15, 2018.