Digital diabetes care market will be worth US$742M in 2022

The global digital diabetes care market will reach US$742M in 2022, growing at 50% on average annually (CAGR). For digital diabetes care providers, the main revenue sources will be bundles, standalone digital coaching services, and technology licensing. These are some of the key findings from the new report “Digital Diabetes Care Market 2018–2022: Ready to Take Off, recently published by Research2Guidance. The report provides a fresh look on digital solutions for diabetes patients, healthcare professionals, and payers, analyzes historical market trends (2008 to 2017) and gives a future outlook for the market till 2022.

Diabetes is a global epidemic. Global costs to treat 425 million diagnosed diabetes patients have already passed the US$700 billion mark[1]. Digital solutions based on mobile apps have promised to reduce this enormous cost for a long time. The “Digital Diabetes Care Market 2018–22“, a new report by Research2Guidance, shows that this promise has now all chances to materialize. In this third edition of the digital diabetes care market report, Research2Guidance demonstrates how the diabetes app market has finally transformed into the market of complex digital diabetes care solutions, which can make a real difference in the diabetes care.

Since our last update in 2016, the market has significantly changed,” — says Ralf Jahns, Managing Director of Research2Guidance. “What used to be a limited digital app segment has now evolved into a complex ecosystem which includes connected devices, disposable test-strips, and coaching services. The market has expanded outside a digital app and now has more to offer to both end users and healthcare professionals.”

This expansion resulted in an impressive revenue growth: in 2017, the digital diabetes market revenue increased by a factor of three to US$98M. On the other hand, it created new revenue sources for digital publishers, allowing them to make money outside of the app stores. The evolution of the market has shaped the six major sources of revenue:

  1. Bundle sales: sales of bundled offers, which can include connected devices, supply of test strips, and digital coaching services.
  2. Service sales: revenues from app-induced sales of healthcare provider services and coaching services outside the app stores.
  3. Technology licence: revenues from app and portal technology provisioning services for B2B customers.
  4. Device sales: revenues from app-induced sales of connected devices (connected blood glucose meters, insulin pumps, and connectors) outside the app stores.
  5. App store: revenues from app downloads and in-app purchases.
  6. Advertising and promotion revenue: revenues from in-app advertisement and device promotion services for B2B customers.

In 2017, over 40% of the market’s value was generated by bundled offers, which became the main revenue source for digital diabetes offerings. In the current market, a typical bundled offer includes an app with various features and premium digital content, connected devices (mainly blood glucose meters), a test strip supply (limited or unlimited), accessories (carry cases), and coaching services.

As bundled offers cover a wide range of daily diabetes care activities, they can efficiently assist millions of type I diabetes patients in their daily battle with the disease. They include the best achievements of the current digital diabetes care and their value to customer is much higher than that of an isolated digital app. Moreover, numerous clinical trials and studies have proven that bundles help to decrease blood glucose levels and can eventually result in cost savings. Payer organizations, such as insurance companies, show an increasing willingness to include these offerings into their healthcare plans. This will drive the demand for digital diabetes care to a new level.

The increasing acceptance of digital diabetes care offers by paying organizations has also driven revenues from technology licensing, which has become the second most important revenue source. Technology licence services will preserve their importance in the future, whilst their growth will be largely driven by the improved quality and advanced integration of population management modules provided by the digital diabetes care companies.

Market players continue to add coaching services to their service offerings. In 2016, only a handful companies has offered coaching services for people with diabetes via their app channel. Today, around 5% of the total digital diabetes apps available have integrated some form of coaching for their users. As in the case with bundles, reimbursement options from insurers will drive the demand for coaching services, which will see a significant increase in both availability and quality.

In the early days of the market, the ability to connect a device to a smartphone allowed the device manufacturer to charge a premium. This made device sales the most important revenue stream in the market. Today, however, device connectivity is standard, whereas prices for connected glucose meters continue to fall. What is more important, connected devices become increasingly integrated into bundled offers. As a consequence, the sales of standalone connected devices and connectors will remain a niche segment in the future.

App store revenues, i.e. revenues which come from digitally offered content and app features, will continue to increase but at much slower a rate than other major source revenues. As in-app monetization opportunities in the digital diabetes care are rather limited, the role of the app store will also reduce to the niche segment. The same applies to in-app-advertising and promotion, which play a negligible role in the market. However, companies will continue their attempts to monetize on their large reach by offering add inventory or promotional space for relevant products.

In general, the digital diabetes care market has showed its ability to generate revenue and innovations. Market players have passed through the trial-and-error period, coming up with complex digital solutions, which now meet expectations of both B2B and B2C clients. Although the market has not yet reached a real breakthrough point, it has gained all the prerequisites of a mass consumer market and is now ready to take off.

For more information about the new “Digital Diabetes Care Market 2018–2022: Ready To Take Off” report, click here.

[1] Source: International Diabetes Federation (IDF)

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