Intel (NASDAQ:INTC) is generally known for its x86 microprocessors, which are closely tied to the fluctuations of the PC industry. Most investors generally don't think of the tech giant as a healthcare company. Yet Intel has recently made some interesting investments in wearable devices and mobile health -- two markets that are growing much faster than personal computers.
According to Business Insider, the value of the wearables market is expected to grow from $5.2 billion this year to $12.6 billion by 2018. The mobile health market, which includes fitness apps and wearables, is expected to be worth $21.5 billion by 2018, according to BCC Research. By comparison, IDC expects annual desktop PC shipments -- Intel's core market -- to fall 6% between 2014 and 2017.
Therefore, it makes sense for Intel to diversify into healthcare to find new sources of growth. Let's look at three surprising ways Intel is merging its technology into wearable and mobile devices.
Intel recently announced a partnership with SMS Audio, which is majority-owned by rapper 50 Cent, to develop BioSport biometric earbuds.
The sweat and water-resistant earbuds will use an optical sensor for continuous heart rate monitoring, and synchronize with the RunKeeper app to track distance traveled and calories burned. Like fitness bands, the earbuds will synchronize to a chart showing a user's activity levels throughout the workout.
The biometric headphones will likely use technology gained from Intel's acquisition of activity tracker maker Basis in March. Basis' fitness bands use optical and skin sensors to take biometric readings.
Intel and SMS Audio aren't the only companies working on biometric earbuds. LG Electronics announced a similar product at the Consumer Electronics Show in January, and Apple (NASDAQ:AAPL) was granted a patent for biometric earbuds in March.
Although biometric earbuds have a narrower appeal than all-day fitness bands, demand for premium headphones remains high. High-end headphones maker Beats Electronics -- which was co-founded by Dr. Dre and recently acquired by Apple -- saw its annual revenue quintuple between 2010 and 2012.
Much tinier chips
The BioSport earbuds highlight another aspect of Intel's wearables strategy -- tiny chips designed to connect to the "Internet of Things."
During CES, Intel unveiled a tiny SD card-sized computer called Edison. Edison is a full-featured 400-megahertz computer equipped with Wi-Fi, Bluetooth, and other features. Intel demonstrated that Edison could be placed anywhere -- in chairs, appliances, coffee cups, or baby monitors -- to connect them to the Internet, apps, and each other.
Rest Devices' Mimo Baby Monitor -- which consists of a water-resistant turtle (which houses Edison) attached to a baby-sized "kimono" -- can wirelessly monitor a baby's breathing, temperature, and movements and transmit them to a companion app for iOS and Android. If the Mimo Baby Monitor is scaled up for adult patients, it could connect them to the wireless grids of "smart hospitals" for continuous monitoring.
Wearable devices in clinical trials
In mid-August, Intel announced a partnership with the Michael J. Fox Foundation in a wearables study for Parkinson's disease.
Since Parkinson's is characterized by slowed movement, tremors, balance issues, and poor sleep quality, there has been rising interest in using motion sensors and accelerometers -- two standard features in smartphones -- to detect the disease.
Over the past three years, apps such as Digital Arts' Tremor-Meter have arrived on mobile devices to detect tiny tremors in a patient's hand. Other apps can detect and correct slurred speech. Intel didn't disclose which wearables and mobile devices would be used during the Parkinson's study, but it will likely use similar methods.
Since the FDA recently approved several wearable devices for clinical trials, Intel's new presence in biometric sensors and tiny computers could help grow its footprint in healthcare through clinical trials as well.
The Foolish takeaway
Intel has a few fascinating opportunities to expand into the healthcare market.
If demand for fitness trackers merges with demand for premium headphones, the BioSport headphones could become the Fitbit of the audio world. If hospitals and medical device companies come up with creative uses for Edison, it could become a valuable tool as the Internet of Things expands. That could lead to the increased use of Intel technology in clinical trials for neurological disorders such as Parkinson's and Alzheimer's disease.
However, investors should note that Intel's rival ARM Holdings also has plans to expand into wearable devices and healthcare -- which could make this the next big battleground to watch for the two companies.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel. 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.
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