Connected Health and Fitness Services Market Projected to Reach $1.8 Billion in 2019, Driven by Software Innovation and Freemium Models

According to a report, the revenue of the health/fitness device connectivity services market was estimated at $320 million in 2015 and is projected to be six times that amount by 2019. Based on this, Juniper Networks Research forecasts that the market will reach $1.8 billion by 2019.

Author James Moar once wrote that the explosion of the service market is due to the fact that a successful fitness device must shift its focus from hardware alone to software and services.

He stated in a release, “Wireless connectivity allows health and fitness devices to collect biometric data without an interactive platform, but users desire interaction with their devices. As a result, the importance of sensors and hardware will decline more rapidly than in any other market segment.”

A report released last August projected that the healthcare device market would reach $3 billion by 2019. While the popularity of smartphones is expected to drive connected devices into the realm of mass-market consumer products, the report also noted that connectivity could pose a threat to these devices, as rapid updates in smart technology may lead to quick obsolescence.

Moar also stated in a white paper, “Smartphones bridge device functionality with apps, presenting both risks and opportunities for the smart wireless services market. On one hand, if a device is overly reliant on an app, it may become replaceable. However, flexible application platforms enabled by unified connectivity technologies allow consumers to easily integrate peripheral devices into their daily lives—a feat that would be impossible if users were to interact with each device in isolation.”

Juniper predicts that growth in this sector will be driven by the freemium model, which offers apps and devices at no cost but charges for access to advanced features. For example, users can track their health data for free but must pay for data processing services, such as analytics.

A research firm projected that by 2019, 12.9 million users would adopt these payment service platforms, with the majority of sales concentrated in mature markets featuring large-scale medical infrastructure.

Moar stated, “The purposeful use of data not only captures the majority of its value but also implies an uncertain future for devices that primarily track basic consumer-facing metrics.” Multiple studies have shown that rapid iterative updates and the increasing integration of essential features into smartwatches and more sophisticated fitness devices require vendors to rely on more innovative software to achieve their objectives.