Healthcare has been touted as the next most happening growth frontier for technology stocks. Increasing proliferation of wearables backed by virtual reality (VR) is helping to address the mounting demand for healthcare applications both from consumers and healthcare professionals.
In fact, wearables have become the most convenient way to track fitness and post-operative care of patients within a short span of time. Doctors are using wearables to keep a track of patients’ health. Moreover, smart wearable sensors not only help in health monitoring but also in data analysis.
According to Markets and Markets, the global market for medical wearable devices is projected to reach $12.1 billion by 2021.
Moreover, demand for VR-based applications is also on the rise. The technology is being used for education and training, treatment planning, diagnostics, robotic surgery, and also for curing severe conditions like phobias, autism, PTSD and addictions.
Per a report by ResearchAndMarkets.com, global VR in the healthcare market is expected to witness CAGR of 54.5% over the period of 2017-2023.
Notably, players like Apple AAPL, Alphabet GOOGL, Amazon, Fitbit FIT and Garmin GRMN, among others are beefing up initiatives in order to cash in on the growing trend.
Let’s see how these tech behemoths are resizing their portfolio to fast penetrate the healthcare sector.
The iPhone maker, with the addition of Apple Watch, is helping “customers stay connected, enhance their fitness and, in many cases, detect life-threatening conditions.” Apple Watch, built on the foundation of HealthKit and Health, enables users to track their health metrics as well as share that data with their physicians.
Increasing adoption of Apple Watch is noteworthy, which is evident from the third-quarter fiscal 2018’s results, wherein revenues grew in the mid 40% range.
Per a recent report by IDC, Apple WatchOS is expected to lead with 20.2 million shipments, representing 16.2% market share in 2018. The market share is expected to go up to 17.3% by 2022.
Furthermore, the power-packed features of its latest watchOS 5 will help the company further penetrate the health and wellness market.
Apple Inc. Revenue (TTM)
Apple Inc. Revenue (TTM) | Apple Inc. Quote
Alphabet’s Google is expected to launch a Pixel Smartwatch at its October hardware. Qualcomm also recently confirmed that it is working on a new wearable chipset for Google’s Wear OS smartwatches.
Reportedly, the company is also working on developing a health and fitness coach called Google Coach that would use AI technology to improve wellbeing.
However, IDC predicts Google to face maximum competition from Android-based smartwatches “due to the high amount of customization available to vendors and the lack of Google services in China.”
Given this, Google’s Wear OS, which “has been somewhat of a laggard recently”, is anticipated to secure the second spot with 5.4 million shipments and 4.3% market share in 2018. Nonetheless, the market share is expected to more than double in 2022.
Alphabet Inc. Revenue (TTM)
Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote
Fitbit is benefiting from the introduction of smartwatches and other products related to health and wellness. The company has teamed up with Medtronic to develop devices that can help fight diabetes.
Recently, Fitbit unveiled health partner apps and clock faces that offer new options to users with the help of which they will be able to manage their health conditions related to diabetes and some types of cancer in a better way.
Moreover, Fitbit’s popularity among teenagers is also on the rise. Per an April survey by Piper Jaffray, Fitbit enjoyed 71% of their vote as their favorite fitness band, while Apple garnered 10%.
All eyes are on its new wearable (mostly, Charge 3), which has a full touchscreen and smartwatch-like features. It is likely to be launched in the ongoing quarter.
Fitbit, Inc. Revenue (TTM)
Fitbit, Inc. Revenue (TTM) | Fitbit, Inc. Quote
Garmin is another fierce competitor in this space. Management has gradually built the product portfolio for its fitness business, through both internal development efforts and acquisitions.
Strength in this segment continues to be driven by focus on location-enabled wearables and growing engagement on the Connect IQ App store.
There has been recent news that wearables data such as steps, distance, stress levels, heart rate and sleep can now be used by third-party developers. The company is bringing Health Companion SDK for Android and Apple devices.
Garmin Ltd. Revenue (TTM)
Garmin Ltd. Revenue (TTM) | Garmin Ltd. Quote
Apple and Garmin carry a Zacks Rank #2 (Buy), while Fitbit and Alphabet have Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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