mHealth app market 2016: Top 10 changes and reasons to be optimistic for the years to come

Another year of fast mHealth app market growth lays behind us. 2016 has seen a rush of companies entering into the market of fitness and medical apps.   Established players are still struggling, but there is light at the end of the tunnel.

To get the full picture of what happened in 2016 and what are the major trends for the next years, download the mHealth Economics 2016 report. The report is based on the largest annual study about the current status and key trends of the mHealth industry globally.

Here are ten changes and trends that have shaped the mHealth publishing industry in 2016:

1. The mHealth app market is getting crowded: Almost 100,000 mHealth apps have been added since the beginning of last year, amounting to 259,000 mHealth apps currently available on major app stores. In addition, 13,000 mHealth publishers entered the market since the beginning of 2015, totaling 58,000.
2. The growth of the demand side has slowed down: Growth rates of mHealth app store downloads are estimated to be only +7% in 2016 after +35% from the previous year, reaching a total of 3.2B in 2016.

1. 3. Multi-platform publishing on iOS and Android has become the norm. 75% of today’s mHealth publishers develop for both platforms.
   4. Unlike the previous years, publishers now use APIs to connect their apps to third party apps, sensors or data aggregators. Apple HealthKit is by far the most commonly used API. 58% of publisher now use APIs, compared to 42% from the previous year.
   5. mHealth app publishers are becoming more experienced with developing: Developing an app involves using tools to develop, test, market and monitor performance. 72% of mHealth app publishers have used analytics, testing, storage or cross platform tools.
   6. mHealth app  market companies are getting smaller again: Last year saw a wave of new market players, which are the “Garage” type of start-ups. The share of this category increased from 8% to 13% in the last year.
   7. It is still not a money printing business for all: 78% of mHealth app publishers report to have made less than US$100,000 from their entire mHealth app portfolio business. 60% make less than US$10,000 per year. Traditional app store revenue sources like IAP, paid app download or IAA are the main income source for only 4-10% of today’s mHealth app publishers. Rather, they license technology (15%), and even offer third party development services (14%).
   8. Reducing hospital readmission rates and non-adherence to treatment costs remained the most important cost levers for mHealth apps: More than 60% of market players believe that the greatest cost saving benefit from mHealth apps will be in reducing hospital costs by decreasing hospital readmission rates, length of stay as well as assisting with patient compliance to medication plans.
   9. US$10 has developed to be the threshold for which a patient is willing to pay out-of-pocket for mHealth app services: There is a strong market belief that patients/app users would spent no more than US$10 (or US$9.90) on, for example, a monthly subscription for a health chat, a one-time download of a diet plan or one-time expert feedback.
   10. Health insurance companies (HIC) started to become a key player in the market: The majority (85%) of companies in the market assume that patients would be willing to share their health data with HICs in return for a cheaper plan, health recommendations or research purposes. Only 17% of mHealth practitioners rate the app portfolio of health insurance companies to be above average in quality.

   Overall, 2016 was a good year for the mHealth app market. Mobile Health remains on an upward trajectory. Future growth in the digital market is deeply intertwined with how traditional healthcare players co-operate with mHealth tech and start-up companies. The increasing number of accelerator and incubator programs, as well as one to one partnerships are good indicators that this need is understood by the industry.

   As always, we welcome you to share your thoughts, comments and insights. We love to hear from you!

   … and get your copy of the mHealth Economics 2016 report here.