A new report from Research2Guidance estimates that the total 2011 revenues generated by mobile health apps, companion health devices and related services totaled $718 million, which marked a seven times increase over 2010’s $100 million estimate. Still, the research firm said that mHealth is still in its “embryonic state” and it could grow substantially in the years to come. Mobile health revenues will climb into the billions by 2016 when mobile health services and related device sales will each account for a couple billion dollars in revenues.
While the specific dollar amounts were withheld in Research2Guidance’s sample documents about the report, some of the trends are clear from the graphs. Revenues from paid downloads, mobile health related advertising revenue, and transactional revenue will grow considerably over the next four years, according to Research2Guidance, but device and services sales will take over as the dominant revenue streams this year, and especially in 2013. They will hold that trend in the years to follow.
Last year when ABI Research predicted that the overall market for health and fitness apps would total $400 million by 2012, most of those working in the industry sighed a collective groan: That’s it? Venture capital firm’s Psilos Group’s co-founder and Managing Member Lisa Suennen summed it up in a widely cited post on her Venture Valkyrie blog:
“ABI Research, reports that the mHealth market is growing so fast that it will more than triple to $400 million by 2016. If you are an investor like me, and I’m sorry to use such a technical finance expression, that sucks. We are trying to build companies that we can sell for $400 million. If that is the size of the whole market three to four years from now, it’s hard to see it as a good investment today.”
ABI’s numbers specifically focus on paid app downloads, while Research2Guidance includes service revenues and device revenues, which considerably boost the numbers. ABI seems to agree that these companion devices — the firm points to Bluetooth Smart-enabled fitness devices as prime examples — will drive adoption of companion mobile apps. ABI does not seem to include revenues from those devices in the mix, however. As an example of the type of devices it included in its revenue estimates, Research2Guidance points to Sanofi’s recently FDA-cleared iBGStar glucose meter.
For more details from Research2Guidance’s report, read the press release below.