Autor: Adam Vranka | 5 min. čítania

If a friend told you that a watch worth a few hundred euros saved his life, would you believe him? Nowadays, this is also a reality and thanks to various wearables, as accessories (e.g. watches, headphones, bracelets, rings) that a person can wear as a useful electronic accessory.  These products have various functions, including those that help us to monitor and improve our health. There have been several cases where these accessories have literally saved the life of the user. To give you an idea, here are some examples.  A Kansas resident's smartwatch measured her heart rate at 120 beats per minute (for a healthy person, it should be in the range of 60 to 100 beats per minute). She thought the watch was measuring wrong because she didn't feel it herself. The next morning, when the watch kept alerting her to the high heart rate, she saw a specialist. They diagnosed her with hyperthyroidism (a condition in which the thyroid function is increased), which if left untreated can lead to life-threatening complications. Another example is a resident of Norway whose blood pressure suddenly dropped in the middle of the night and fainted in the bathroom. This fall triggered a fall detection function that automatically alerts emergency services. After being alerted, the police contacted the wife, who gave them the address where her husband was staying. This allowed paramedics to locate him, who immediately transported the man to the hospital.

Health is one of the most important things we cannot buy. However, with proper care and prevention, we increase our chances of making our health last as long as possible. We take care of our health in different ways - by eating healthy, taking different supplements and vitamins, exercising, having different treatments and cures, etc. In recent years, we can see a number of new aforementioned wearables, apps and services that help us monitor and take care of our health. This fact is confirmed by the following images.

In Figure 1 we can see the number of wearables devices sold per year. Smart watches and fitness bracelets are shown in dark green. In light green are other wearable health devices or sensors. We can see that a total of 380 million devices were sold last year and further growth is expected in 2024. (Note: CAGR- Multi-year average annual growth rate).

 

Source: Loucks, Jeff and Stewart, Duncan and Bucalle, Arlane and Crossan, Gillan, Wearable technology in health care: Getting better all the time (December 1, 2021). Deloitte. Available at Deloitte: https://www2.deloitte.com/us/en/insights/industry/technology/technology-media-and-telecom-predictions/2022/wearable-technology-healthcare.html

 

In Figure 2 we can see the number of health apps released each year (in thousands) that users can download on the Apple Store or Google Play. Dark blue shows the apps that are still available and light blue shows the ones that are no longer available. This chart only shows data up to 2020, but according to the latest information, more than 400,000 health apps are already available on the Apple and Google app stores. 

 

Source: Apps interpreting data from wearable devices are helping people to live better (May 2, 2022). Economist, IQVIA Institute.  Available at Economist: https://www.economist.com/technology-quarterly/2022/05/02/apps-interpreting-data-from-wearable-devices-are-helping-people-to-live-better

 

Healthcare is not free everywhere, as it is in Slovakia; in some countries it can be very expensive. In the USA, prices for procedures or medicines can be in the hundreds or thousands of dollars. Because of this, various companies see opportunity in the healthcare sector that few would have associated with the healthcare sector a few years ago. We are thinking of so-called 'big tech' such as Apple, Google or Amazon. These companies have been among the biggest investors in the healthcare sector in recent years and have been trying to position themselves in the best possible position in the market with their products and services.

The fact that healthcare is really expensive in the US is confirmed by the graph below, where we can see the increasing proportion of people who have skipped a visit to the doctor because they could not afford it over the last three years. 

 

Source: Fleck, Anna. Americans Are Skipping Doctor Visits Due to Costs (December 12, 2023). Statista, FED.  Available at Statista: https://www.statista.com/chart/31421/share-of-us-adults-without-medical-care-due-to-costs/ 

 

Apple

For Apple, the Apple Watch is clearly the most important product in healthcare. This smartwatch has been gaining more and more fans every year since its introduction in 2015. They have various features that can make it easier for users to carry out their daily activities, but also ones that take care of their health. Over time, Apple has tried to turn its watches into something like portable patient health centers. The watch records a variety of data that users can view in more detail in the Health app. With each new generation, different sensors are added to the watch to monitor the health status of users. Some of the most important health-related features include ECG measurements, irregular heart rate alerts, or fall detection. Analysts estimate that Apple Watch sales account for approximately 6% of Apple's total revenue.

Microsoft

Microsoft is avoiding consumer products in healthcare, and is trying to penetrate the healthcare sector mainly through its Microsoft Cloud for Healthcare. With their cloud, they can enable healthcare providers, hospitals and clinics to store and share data. With its tools and applications, Microsoft then seeks to connect this data, streamline workflows, increase productivity, increase healthcare team collaboration, and help them improve their overall outcomes. With this product, doctors can also monitor their patients remotely and conduct virtual check-ups.

Alphabet (parent company of Google)

When it comes to healthcare, Alphabet relies on multiple products. Among the physical ones, Google's Pixel Watch and Fitbit smartwatches and sensors in particular are among them. But it is also developing various apps and services, such as DermAssist, which helps users find out more about the state of their skin and then tries to detect various problems or ailments by analysing it. Like Microsoft, Alphabet is also trying to improve and simplify the work of healthcare providers through its cloud.

Amazon

Amazon, like Microsoft, is trying to penetrate the world of healthcare through services rather than physical products. On its website, it offers the One Medical service for $9 a month, making virtual healthcare available to users 24/7. Another service worth mentioning is RxPass. With this service, users have access to the most common generic medications for a monthly fee of $5. The RxPass subscription includes more than 50 generic medications covering many common conditions. Amazon claims that the average member saves 47% on medications through this service.

 

Conclusion

The importance and size of the healthcare services and wearables sector is likely to grow. As we have seen from the charts, more of these products are being sold every year and more health-related applications are being created. It would be difficult to predict with certainty which company will be successful in the long term in developing and selling its products and who will be the leader in this field. What we can say, however, is that the companies mentioned in this article are well on their way to being the leaders. Shares in these companies can also be found in our various funds, such as the Fond reálnych aktív or the Fond maximalizovaných výnosov. 

 

Disclaimer: This document is a marketing communication and is intended as a supplementary source of information for investors and is based on the best sources of information available at the time of its production. The analyses and conclusions presented are general in nature and do not take into account the individual needs of investors in terms of yield, taxation and level of acceptable risk. The information has been prepared without taking into account the personal circumstances of the potential recipients and their knowledge and experience in the field of investment, does not constitute the provision of investment advice or investment research, is not a proposal for the conclusion of a transaction by the management company and does not imply any commitment. Past returns from an investment in mutual funds are not a guarantee of future returns. The source of the information used is Erste Asset Management GmbH, with registered office at Am Belvedere 1, 1100 Vienna, Austria, registered in the Commercial Register of the Commercial Court of Vienna under registration number 102018 b, doing business in the Slovak Republic through the organizational unit Erste Asset Management GmbH, branch office Slovak Republic, with registered office at Tomášikova 48, 832 65 Bratislava, ID No.: 51 410 818, registered in the Commercial Register of the Municipal Court of Bratislava III, Section: Po, Insert No.: 51 410 818, registered in the Commercial Register of the Municipal Court of Bratislava III, Section: Po, Insert No. 4550/B, unless otherwise specified. The information contained herein may not be further disseminated without the prior consent of Erste Asset Management GmbH, Branch Office in the Slovak Republic.