Smartphone Apps Market Model Takes mHealth Market to New Level


Will mobile apps become the killer application of the mHealth market?

By Markus Pohl                                                                                   

research2guidance / The Mobile Research Specialists

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Dear Dr. Marcinko,  

New research by research2guidance concludes that mobile applications and the new smartphone market model will help the mHealth market to reach a new level. The mHealth market will develop from a trial market to a global market, which is about to realize its full potential.

A Long Time Topic 

mHealth solutions have been discussed since the end of the 90s. There were very positive market projections indicating that the mHealth market would soon become a billion Dollar market at that time. But the market never really took off. What stopped the early mHealth market from being successful?

In the last years a new market model has been created by Apple: The mobile applications eco-system. Can this new system ignite the market development that everybody has been expecting for the last years? Will smartphone apps become the killer application of the mHealth market?

Barriers to Entry

The following list shows the main barriers which prevented the mHealth market from growing in the past and the changes the new model will bring:

1. Devices: Early solution providers had to live with limited device capabilities and in order to achieve successful market entry and profitability had to find hardware partners to develop the mobile device. Furthermore, reach was very limited for any kind of smarter phone. Many of the features that early solutions providers had to find special solutions for are now included as standard on smartphones (e.g. GPS or sensors). Reach of smartphones, although limited today, won’t be in 2 years time with the number of smartphone users projected to be 1 in 2013.

2. Distribution: In the early days mHealth solutions providers had to seek partnerships with MNOs in order to gain some support with the distribution of the service or had to do it on their own. The new market model offers global reach without having to deal with an MNO.  Still, traditional distribution channels like doctors, hospitals and health insurance providers are not being affected by the new model.

3. Patients and doctors: The awareness of mHealth solutions was very limited. The new market model offers a better user experience along the entire value chain: discovery and access, billing and usage. The hype for smartphone apps also brings mHealth apps into the spotlight of its potential users. Still, one of the biggest target groups for mHealth solutions, the elderly, will have the biggest issues with technology adoption, although they would benefit most from mHealth application usage. This mismatch will not be changed by the new market model in the near future.

4. Regulations: The new market model has only limited impact on one of the key barriers regulation. As long as mHealth solutions and services don’t get clearance from national regulators and are thus not reimbursable by health insurance providers, patients must pay expenses them-selves. Doctors won’t prescribe e.g. a pill reminder application and will have no financial incentive to propose such solutions to the majority of their patients. The market will remain a consumer driven market, which means that the full potential will remain untapped.  Another barrier remains the discussion around security and confidentiality of data. Major projects like electronic health records have been mandated a decade ago in some countries but implementation has been delayed until now mainly because of security and confidentiality reasons.

The findings are a part of a new report by market research institute research2guidance about the global mHealth market. The report analyzes in detail the impact of the new market model, the business opportunities for mHealth app publishers, and how the market will look like in 2015 and will be published at the end of October 2010


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US Budget Deficits Require Both Spending Cuts and Tax Increases

The CRFB Speaks

By Children’s Home Society of Florida Foundation

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The nonpartisan Committee for a Responsible Federal Budget (CRFB) has published a release on October 20 that discusses some of the options to tackle the federal deficit. According to a Bloomberg News poll, there are two major issues that are foremost in the minds of voters as they go to the polls on November 2nd. The first is jobs and the US economy. The second issue focuses on federal finances and the budget deficit.

CFRB Suggestions

The CFRB suggests that there are four potential options for reducing expenditures and one for increasing revenue.

1. Fraud, Waste and Abuse – A favorite comment of all political candidates is that he or she will reduce fraud, waste and abuse. While there may be some savings, this historically has been a fairly modest part of actual deficit reduction.

2. Strengthen Social Security – Congress will need to address methods for strengthening Social Security. The Social Security program used to run a substantial surplus each year. However, in 2010 the federal deficit will total approximately $40 billion. That is, the amounts received by Social Security will be $40 billion lower than the amounts distributed for benefits.

Social Security

By 2020, Social Security could be running a $100 billion deficit. Social Security Trustees have stated, “The projected trust fund shortfalls should be addressed in a timely way so that necessary changes can be phased in gradually and workers can be given time to plan for them.”

3. Healthcare – The Congressional Budget Office notes that the current healthcare programs could require nearly one-half of the federal budget by 2030 or 2040. Therefore, there will need to be further changes in healthcare in order to make the program fiscally sustainable.

4. Defense – Defense expenditures in 2010 were 4.7% of Gross Domestic Product (GDP). This amounted to $692 billion. Defense Secretary Gates has acknowledged that there may be opportunities to eliminate some weapons systems and reduce expenditures.

5. Increased Taxes – The CFRB release states, “It is very difficult to lay out a credible deficit plan that would not increase taxes. It is also very difficult to develop a comprehensive plan that would not raise taxes on families making less than $250,000 per year.” The potential for increased taxes has focused on income taxes, capital gains taxes, estate taxes and a consumption tax such as a gas tax or a value added tax.


The Fiscal Commission appointed by President Obama is expected to issue a report in December that discusses these issues.

Editor’s Note: Your editor and this organization take no position with respect to the many financial and tax options that are available to Congress. This information is offered as a public service to our readers.


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