3 Building Blocks of a Wearable Technology Revolution

The sky is the limit for wearable medical technology, but it won't be as simple as slapping a smart watch on your wrist.

Aug 16, 2014 at 11:01AM

It isn't a surprise that technology staples Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG)(NASDAQ:GOOGL) have thrust themselves into the market for wearable medical technology -- an emerging industry at the nexus of buzzwords like The Internet of Things, Wearable Technology, and Personalized Medicine. But while consumers begin to pine for smart gadgets, demand isn't the only obstacle wearable tech makers must overcome. There are several building blocks to a wearable technology revolution that will need to be assembled for its reliable, safe, and effective use in healthcare. As the development of new devices like Google's smart contact lens progresses, we're beginning to learn more about these three pillars: technology, clinical development, and data integration.



Google's smart contact lens. Source: Google.

Google didn't wait long to one-up its own Google Glass with a new smart contact lens. Unlike Glass, however, the contacts don't appear to be meant as a mobile media device but rather as a noninvasive diagnostic tool. Using microchips and incredibly small electronics the contacts are able to measure the sugar content of tears once per second.

According to the American Diabetes Association, nearly 30 million Americans suffer from diabetes, a lack of or insensitivity to insulin that makes it very difficult to regulate blood sugar. To keep blood sugar under control, patients must adopt a daily routine of finger pricks and self-monitoring. The process is inconvenient, intermittent, and often painful, leading to sub-par patient adherence and the potential for complications. The contacts, with their noninvasive and nearly continuous monitoring of tear sugar (thought to be a surrogate measure of blood sugar), represent a solution to a serious unmet medical need in a multibillion dollar market.

Google's technology may be an ambitious example, but the contacts themselves represent the first building block of telehealth: the technology. Like its peers developing smart watches, heart rate monitors, or other remote health devices, advances in wearable tech will require substantial investment and risk taking. The devices will need to be compact enough for practical use, and engineered reliably enough to entrust one's health to. Smart contacts appear to be a step in that direction.

Clinical developement
As wearable technology advances from popular devices like FitBit and Nike FuelBand into more clinically useful tools, their use is certain to come under heightened scrutiny from Food and Drug Administration regulators. That is particularly the case for devices like Google's contacts, which serve as diagnostic tools to guide drug treatment. In fact, Apple has already engaged with the FDA over the distinction between educational wearables applications and those intended for diagnostic use. According to an FDA memorandum, there is also a distinction between the software used to analyze diagnostic data and the user-facing software that reports the data.

With an eye on these kinds of hurdles, Google has found a partner to help tackle the second building block of wearable tech innovation: clinical development. Announced in July, Google has teamed up with Novartis to undertake scientifically rigorous clinical studies of its contacts. Under the terms of that deal, Novartis will in-license the right to develop and commercialize the contacts through its Alcon eye-care division. This kind of partnership melding technological innovation with established R&D and regulatory experience is certain to play a role in the advancement of wearable technology.

Reporting the data


Apple's HealthKit. Source: Apple.

It may sound obvious, but putting the mountains of data collected by wearable devices to good use is a major logistical building block of a telehealth/medical wearable revolution. Existing mainstream wearables are excellent for patient engagement, and Google's new Google Fit platform will serve to consolidate those data into a user-friendly mobile interface. But for doctors, the data can be so much more useful when synced with patients' complete records in a private and secure way.

Data connectivity isn't only important for patient care, though. In these times of great concern over healthcare costs, you can bet that insurers will keep a close watch on the pricing of new technologies. Data integration and collection will be essential for manufacturers to collect evidence that their devices provide sustained clinically meaningful benefits to patients and are worth the investment of healthcare payers.

Several tech and health care IT providers have jockeyed for position in the market for HIPAA-compliant data exchange. Apple and electronic medical record (EMR) vendor Epic Systems inked the first major deal on this front, allowing data from wearable devices to flow through Apple's HealthKit and sync directly with a patient's EMR. Spreading its reach further, Apple is now also in talks with EMR vendor Allscripts, as well as other major health centers across the US. Likewise $27 billion consumer electronics maker Phillips linked up with cloud-computing powerhouse Salesforce.com to facilitate the exchange of data from its medical devices. Despite its cloud prowess, Google has a shaky history with EMRs, and so far doesn't have a partner for Google Fit. As it stands, that makes Apple's iOS a far more attractive platform for potential wearable tech developers seeking that kind of EMR connectivity.

What's an investor to do?
Wearable technology certainly presents an interesting investment, but the layers of complexity can make the options seem overwhelming. In emerging industries such as this, the best opportunities often lie with companies possessing the most optionality. In the context of our industry building blocks, the most optionality exists for companies that facilitate one particular step in development, rather than usher products from conception to market. Apple's HealthKit platform, for example, takes a bite out of the growing industry while distributing risk to the multitude of hardware makers developing new technologies.

Wearable technology and personalized medicine are really just budding dreams in the healthcare community, but present significant opportunities to improve patient care while cutting health care costs. Keep your eye on this emerging industry, but beware of the obstacles that face entrants into this exciting space.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Seth Robey owns shares of Apple and Nike. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Nike. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers