A rant about the Internet of Things hype.
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The Wireless Health market is ginormous -- so forecasters say
Our bodies, our forecasts. It's exciting. Mythical John X Wannabe will soon go to market with a wearable device – the “XLife Preserver” – designed to lower hospital costs, improve health, and entertain. It looks a bit like a Fitbit and mini television combined, and is worn clipped to a waist band or belt. It beeps every time a vehicle John is driving exceeds the lowest-available regional speed limit. It chirps when John steps off the curb to cross the street, screeches when John’s shoes are untied, and mumbles "Uh, oh" when he forgets to eat breakfast. When no one is looking, he can even unclip it and watch past episodes of House of Cards, read his e-mail, or check into Foursquare.
It’s just the tip of the Wireless Health synonym groundswell. Warning John to avoid life-threatening situations and to eat properly will help prevent ER visits (not to mention limit his endless snacking). The video screen helps keep him occupied during lunch and afternoon breaks. So naturally the "XLife Preserver" is classified as a Wireless Health/Digital Health/mHealth/HIT device – investors are wowed. The market for Wireless Health, after all, has just been sized (see 25 different sightings) at a cool $59.7 billion by 2018. That is 5 long years away -- and as the tech industry well knows, it's like dog-years -- in five years, it will be tough for Google to locate that number in a page view near you.
The Wireless Health market sizes may mean something -- even if the year is wrong. Thirteen years ago, Forrester Research sized the B2B eCommerce market to grow to $2.7 trillion by 2004 from $43 billion in 1998. That’s a big number and no one, including me, could really grasp it. Like other forecasts, it was built up through a spreadsheet model that included some prior year actual revenues, added percentage growth rate assumptions based on interviews, verified publicly available data, and voilà – a forecast was born. As with all forecasts, however, subsequent oops-what-we-really-meant mea culpas have been exceedingly rare – even when forecasts turn out to be wrong. In 2012 Forrester revised its sizing of B2B eCommerce sales in a new report, saying that it was now anticipated to be $559 billion by the end of 2013. The earlier optimism in 2000, happening alongside the dot-com boom and bust, powered interest and big investment in now defunct companies -- like Chemdex, Commerce One, and Purchase Pro, for example. Today, B2B commerce deployments are still hamstrung by channel conflict and process issues.
So which comes first – the forecast or the offering? Back to mythical John and the "XLife Preserver." Along with his future board members, he reads voraciously. He had previously perused the MarketResearch.com wireless health projection of $38 billion by 2016, and even the March (2013) Research2Guidance forecast of $26 billion by 2017. He was briefly concerned about a low-ball figure of a mere $6 billion market for wearables from IMS Research. But no matter. Any of these flights of imagination is big enough for John to receive $3 million in startup funds from Head, Clouds, Smoke and Vapor (HCS & V) Venture Capital – an early-stage investment firm based on a steep hill next to a winery in Napa Valley. With his new funds, he will hire his engineering team, develop his prototype, and bring a non-working version to the mHealth Summit. Will the XLife Preserver be a hit – or will it hit the market like the Samsung Smartwatch (check out that last picture)? Will it validate the market sizing forecasts or will it be a Version 1 dud quickly forgotten? Forecasters, naturally, will not say.