Six groups that will shape mHealth apps of the future

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A Special ME-P Report

The Distinct Segment Publishers

By Ralf-Gordon Jahns and Markus Pohl

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Introduction

Dr. Marcinko and ME-P Readers and Subscribers,

Did you know that mHealth app publishers can be grouped into 6 distinct segments?

Segments differ mainly by goals, business approaches and performance. Their desire to help others distinguishes them from the rest of the app community. Knowing these segments is a pre-requisite for all those who wish to successfully participate in the new mHealth app ecosystem.

The Publishers

So, who is behind the 100,000 mHealth apps published in today’s app stores? How do the publishers differ in terms of motivation, development tool usage and satisfaction about goals achieved? The mHealth app publisher segmentation distinguishes 6 groups of current mHealth app publishers. This segmentation is based on the results of themHealth App Developer Economics 2014study.

A deeper knowledge about the mHealth app publishers is essential to all health market participants who wish to successfully navigate inside the newly emerging mHealth app ecosystem.

mHealth app publishers are not like game or tool app developers. 46% publish apps, because they want to help others. They also have objectives like revenue generation or raising brand awareness, but this “altruistic” attitude clearly distinguishes them from the rest of the app economy.

Within the six mHealth app companies, publishers with a strong medical background and those who leverage existing app development tools & APIs seem to accomplish their goals better than those who do that to a lesser extent.

Traditional healthcare players like Pharma, Med-tech or insurance companies have not been able to define their role in the market yet. Established Healthcare Players are the only segment “mainly not” satisfied with their goal achievement.

These are the profiles of the 6 distinct mHealth app publisher segments:

1) Established healthcare players:

This group includes Pharma, hospitals, health insurance and Med-tech companies, representing 3.4% of the total number of app publishers. These players usually belong to the mHealth app publishers with > 5,000 employees. Their primary objective for being in the market is to raise brand awareness and they have published the largest number of mHealth apps. Nevertheless, average reach in terms of downloads is far below the market’s average. App publishers in this group are so far the least satisfied with the achievements in the mHealth app market. The usage of tools and APIs to improve the efficiency of the app development process and app monitoring as well as the value of the app is below its competitors.

2) App specialists:

App specialists are small companies, which typically hire 3-10 employees. They have entered the mHealth app market in order to benefit from its potential. They have an app developer background and are familiar with available development and support tools. The share of medical experts on board is relatively low. This group constitutes 14% of the mHealth app publisher community.

3) Helpers:

Helpers’ primary motivation for publishing apps is to help others and they are usually organized into small companies of 3-10 employees. Revenue generation is only a minor factor. Typically Helpers have already achieved or over-achieved their goals. In terms of downloads, they have the highest share of companies (61%) that achieved less than 5,000 downloads last year. Helpers represent 32% of the market.

4) Medical specialists:

Medical specialists leverage their medical know-how to develop mobile apps. Similar to the Helper group, Medical specialist have a large share of members who publish apps to help others. By far they have partly reached their goals. They have the highest share of companies, which in 2013 earned more than USD 1m with their mHealth app portfolio. They represent 20% of the market.

5) Fitness specialists:

This group of app developers represents around 10% of the total mHealth app developer community. They primarily develop fitness apps with a clear objective to generate revenue. They connect more often to medical databases and sensors and use app development tools above average. The usual company size is 11-100 employees.

6) Connecters:

This group of mHealth app publishers represents 18% of the total mHealth app developer community. Their strategy is to create value rich apps by enabling connection to other apps, sensors and databases. This group generates the highest average revenue and has the highest goal achievement level.

Apps

Assessment 

The mHealth app publisher segmentation is a snapshot of the current state of the market. It will change as segments become more important (medical specialists) or new groups appear.  One of the main questions will be if and how traditional healthcare players will be able to compete with these small and agile companies that are driving the market today.

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Conclusion

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References:

Link to blog post:

http://mhealtheconomics.com/mhealth-segmentation-of-app-publishers-business-approaches/

Link to graph:

http://mhealtheconomics.com/wp-content/uploads/2014/05/research2guidance_mHealth_6_segments_business_approaches.jpg

Link to free report:

http://mhealtheconomics.com/mhealth-developer-economics-report/

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Why m-Health App Developers Won’t Make Money with Current Pay-Per Download Business Models

A Broadening Business Model

By Markus Pohl

markus.pohl@research2guidance.com

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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.

Contact:

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+49 30 609 893 363

Conclusion

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com and http://www.springerpub.com/Search/marcinko

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