A Broadening Business Model
By Markus Pohl
markus.pohl@research2guidance.com
Despite the hype around mobile health applications and big market projections mobile health app developers will not be able to create big revenues with a pay per download business models. But how will mHealth apps generate enough sustainability to meet the rising expectations during this hype phase? And how will mHealth business models evolve in the next five years?
The Hype
Mobile health applications are experiencing a second hype phase after first enthusiasm in the early 2000s. By looking back a few years we can see how the business will evolve in the future. Business models of traditional mHealth solutions which long existed before the smartphone app market hype already showed the revenue sources which will become important in the future. Traditional mHealth solutions from 2000-2008 have typically been sold in bundles, which include connectivity charges, a device, and the application and/or service charge. In the more sophisticated traditional mHealth solutions the price for the application and the application sales revenues were minor contributors to the total revenue generated by the solution. Frequently the price for the app was not even disclosed.
First Gen
The first generation of mHealth solutions in the new smartphone applications market have adopted a narrow range of business models, concentrating on revenues generated from application download sales, and subscriptions for content access over a period of time; average of 4-8 USD per download depending on the app store. In a very few cases publishers have linked the application to a device/sensor or service, such as the WiThing Scales Sync which provides a free application for use with a scale which is sold through the publisher’s website.
Broadening Business Model
The business model will broaden once more when the enabling technology becomes sufficiently advanced. Sensors and special devices that are designed to take advantage of the smartphone interface will facilitate more advanced applications, and at the same time healthcare industry players with the capability of providing complex service offerings will enter the market. These factors will allow revenue generation through multiple sources apart from application downloads including for example through service charges for HCPs remotely monitoring patients’ health condition, or through product sales for special devices and sensors that relate to an application’s functionality.
As the market develops, applications will facilitate the sale of products and services such as medications through a compliance application or a mobile pharmacy application. These device and service sales will become the major revenue source for mHealth application providers by 2015.
Advertising revenues will become a revenue stream, as it will across the smartphone application market and will add to the mHealth providers’ income but only to a little extent.
Assessment
As opposed to the traditional model, connectivity will not be part of the bundle, as most smartphone users will already have some kind of data plan.
Today’s dominant pay per download business model will give way to those other revenue stream. Developers of mHealth applications should be aware of that and adopt their products and service accordingly.
To see more details on the future trends in mHealth business models please have a look at the “Mobile Health Market Report 2010-2015”.
About research2guidance:
research2guidance is a Berlin-based market research company specialized in the mobile industry. The company’s service offerings include comprehensive market studies, as well as bespoke research and consultancy.
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Filed under: Information Technology | Tagged: m-Health, mobile health applications, smart phones |
UPDATE: The Market For MHealth Applications Reached $US 718 Million In 2011
2011 was the first year of substantial business in the market for mobile health services delivered via smartphone applications.
The smartphone application market for mobile healthcare increased by a factor of 7 to reach $US 718 million in 2011. Nevertheless, the mHealth market is still in an embryonic state. Theoretically the market potential is enormous given the overall worldwide healthcare market size of US$ 6 trillion (WHO estimate) and the potential use cases and benefits for mobile patient healthcare support.
Within the last year, the growth in the mobile healthcare market has greatly accelerated. The main drivers for this growth have been the increase in the smartphone user base on the demand side, and the doubling of the number of mHealth applications on the supply side. These findings are part of research2guidance’s new Mobile Health Market Report 2011-2016.
A majority of the big healthcare companies have discovered mHealth applications as an innovative way to promote and deliver healthcare services and products. A testament to this is that a number of these large players published mHealth apps in 2011 that go far beyond a simple allergy tracker or pill reminder, e.g. Sanofi Aventis’ sensor-based iBGStar Diabetis monitoring app.
Link: High res picture: http://www.research2guidance.com/wp-content/uploads/2012/01/chart-mHealth-1.2012.jpg
Markus Pohl
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Cam m-Health improve perioperative services?
The National Science Foundation has awarded $797,066 to three Clemson University professors to research how mobile technology can improve coordination in perioperative services.
http://www.clemson.edu/media-relations/4505/nsf-funds-clemson-research-of-mobile-technology-for-perioperative-services/
The project, detailed in an Oct. 9 Clemson announcement, will include the development of a smart app to assist data gathering and create artificial intelligence that runs mobile applications in hospitals.
Eldridge
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