Philips looks to ride health boom with 'ecosystem'

Royal Philips of the Netherlands is looking to roll out a personal health ecosystem in the Chinese market to seek opportunities amid surging demand for health improvement, according to Jorgen Behrens, senior vice president, business leader, Personal Health Solutions at Philips.

Behrens made the announcement during his trip to China for the launch of Philips Health Watch, a piece of upgradable hardware that helps users to better manage their health using data from sensors, smartphone app software and remote location support services.

The product is the first among a slew of products targeting China's consumers in first- and second-tier cities who are allocating more income on personal health improvement, said Behrens.

The product aims at translating the measurements from the data into healthy lifestyle choices and improved behaviors by encouraging users to take charge of their own health, said Behrens.

New users of the product－which has a starting price of 3,599 yuan ($519)－in China can have the first three-month subscription with value-added services for free. After that, the charge is 500 yuan for every three-month subscription.

The business model of the Philips Health Watch is quite different from many of the existing wristband products as it offers value-added services, said Behrens.

He said: "We regard the complete health solution not just as wearable products but all the parts in an ecosystem that gives users incentives and support to improve health."

Users can upgrade both the hardware and software of the Philips Health Watch, and have access to health tips through a smartphone app, and one-on-one telephone health consulting services through the subscription, talking to professional health experts from health centers in partnership with Philips personal health solutions arm.

A study by global management consulting firm McKinsey indicates that expenses for medical treatment have been surging in recent years, so consumers are looking for solutions to prevent disease, such as changing lifestyle and behaviors including better sleeping hours, quitting smoking and getting more exercise.

Market analysts said that the sales of wearable devices targeting consumers who wish to improve their health are booming, but they are also facing increasing competition as more players are entering the market.

According to data of the market research services provider CCS Insight, 29 million wearable devices were shipped in 2014, 85 million in 2015, and the number is expected to rise to 123 million in 2016, and reach 411 million in 2020.

Tong Wei, an analyst with Dialog, said in a research note: "Wearable devices need to seek new areas where they can play a part in people's lives. They should become more interactive, linking hardware, software and professional advice, and at the same time protect users' privacy and data security."