Outside app store revenue will drive the market.

There are various reasons why a company should publish mobile health applications: branding, improving patient outcome, reducing treatment costs and generating revenues.

Interviews with mHealth app publishers indicate that making money with e.g. health tracking, fitness, compliancy and monitoring apps takes much more effort than most developers expected. Mobile health applications normally don’t show up in the top ranking lists in app stores. Some app stores support mHealth or fitness apps by opening up a separate app category to provide some visibility within the crowded app landscape, but nevertheless those categories do not attract high download numbers.

Money won’t be made through app stores.
The good news is there are working business models for the mHealth applications. Within the mobile health app category money won’t be made through app stores. More and more mHealth app publishers have understood that they have to adapt their business model. Turning away from the “normal” pay-per-download models to practices like charging for medical service (call a doc) or sensor based models. Sensor based business models seem to have particularly caught the attention of more and more mHealth app publishers over the last 6 months. Apps such as iBG Star, myZeo and Withings Body Scale combine health monitor functions, easy-to-use interfaces and options for direct data sharing with fancy and attractive sensor-devices. The basic idea behind the sensor-based model is: don’t sell the app but use it to promote sales for a sensor.

The following examples highlight this new trend. Examples are drawn from four different mHealth app categories.

1) Health and Wellness Monitoring
2) Chronic Condition Monitoring
3) Diagnosis Tools
4) Educational and Motivational Tools

1) Health and Wellness Monitoring
Health and Wellness Monitoring is currently the biggest mHealth app market. Applications that monitor health and wellness combine not only fitness-related equipment to track and record pulse, calories, running speed, heart rate, etc., but also combine sensor-devices related to skin treatment, weight control, fetus observation and eye testing. Target groups for these products are fitness and health-conscious users aged mainly between 35 and 45 years. Withings, for example, has launched the first app, which connects a body scale and a smartphone. WiScale App for iOS platforms and Withings App (Beta) for Android enable users to monitor weight changes, store data, share information and connect to Google Health, Runkeeper and Calories 2. The application is free of charge and works with Withings WiFi Body Scale, sold at US$159.

2) Chronic condition monitoring
Still a small market but with probably the highest potential. These sensor devices seek to monitor health conditions like heart disease, hypertension, diabetes, asthma and obesity. The business model behind these sensor-based apps is to generate revenue from the sale of the sensor-device, whereas the application itself is for free. The products in this category are priced from US$80 to US$129. Target groups for chronic condition monitoring apps are health and wellness providers, medical personnel and users affected by chronic conditions within an age range between 30 and 50 years.

3) Diagnosis Tools
Diagnosis tool applications include dermatological evaluation, optometric tests, ultrasound checks, pneumonia and blood oxygen measurements. Most of these products are still under trial and are mainly targeted at professionals, who increasingly demand more portable and easy-to-use devices as well as faster and more direct means of communication, in order to share information with patients and peers immediately. Handyscope is a good example of a medical application, which integrates a dermoscope with an iPhone, resulting in a fancy and sophisticated mobile medical instrument. The application is available at iTunes for US$11.99, whereas the sensor is sold for US$590.

4) Educational/Motivational Tools
Amongst educational and motivational tools sleep monitor products and portable microscopes represent a growing market. These applications monitor habit patterns, in order to improve practice and avoid negative tendencies or functions as useful didactic instruments for science education. MyZeo, for example, is an application for iOS connecting to sleep monitoring equipment, which transmits data to an iPhone and gives recommendations on how to correct disorders. The MyZeo app is free of charge and the basic version of the sleep monitor equipment is priced US$199. Optionally users can purchase a subscription-based Coaching Guide for US$79.95/year and sensors replacement, available at US$14.95 (to be replaced every 90 days).

Mobile apps as promotion tools
The common ground of these examples is that they generate their revenue outside the app store. Apps work as promotion tools or differentiators. Traditional health care service providers and especially medical device manufacturers should be aware of this trend and start to connect to the smartphone world.

Find a detailed view on future mHealth business models in the Mobile Health Market Report 2010-2015.
Or get a look at the mHealth market at a glance: PPT Slides for “Mobile Health Market Report 2010-2015”.

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UPDATE: Our 4th mHealth Developer Economics survey is finished.

You can download the report for free. Just click on the picture below.

MHEALTH REPORT: The “Global Mobile Health Market Report 2013-2017 is a business guide for traditional healthcare companies as well as for mobile operators who want to successfully engage into the new mHealth market. Country mHealth market reports are available forUSA, Germany, Brazil, Japan and UK. See  report preview.

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