A recent market forecast on wearable devices and smart glasses, coupled with 2012 venture capital investments in mHealth at nearly $908 million, indicate the market is hot and likely to get hotter. 

The wearable devices market, including smart glasses, will be worth more than $1.5 billion by 2014, up from just $800 million this year, according to Juniper Research. The market will be dominated by North America and Western Europe, representing more than 60 percent of the global wearable device sales, the research finds.

Juniper foresees significant adoption toward the end of the forecast period, driven by the launch of augmented reality glasses and similar products from Google, Microsoft and Apple.

Juniper’s report, “Smart Wearable Devices: Fitness, Healthcare, Entertainment & Enterprise 2012-2017,” indicates that fitness and sports wearables, followed by healthcare devices, are forecast to dominate the market with a combined market share of more than 80 percent in 2017.

However, even though the number of fitness and sports devices bought per year is higher than the number of healthcare devices sold, the health sector will be slightly larger in terms of retail value due to higher price points.

The report finds that the development of an app ecosystem for wearable devices is essential to create a platform for further broadening the role of wearable devices similar to the smartphone app ecosystem.

“The development of the smartphone/app store model has opened up new avenues for other segments within the market, such as the wearable device market, by combining mobility with an efficient method of software delivery,” report author Nitin Bhas said in a news release. “The simultaneous development of app-ecosystem and wearable devices will integrate technologies, such as augmented reality, into human life more seamlessly.”

“We are just getting started with what’s going to be possible through mobile technology,” Patty Mechael, executive director of the mHealth Alliance, told Healthcare IT News Senior Editor Diana Manos.

Mechael anticipates an increasing use of mechanisms for smartphones, including sensor technology, apps, the wearing of remote sensors and the use of biometrics.

“We will all likely be interacting with the health system through a mobile device of some sort, whether from a positive perspective – such as fitness and well-being – or to manage some sort of chronic health condition,” Mechael said.

Venture capitalists apparently agree, though observers note they are investing with caution. 

“Investors are exhibiting caution when it comes to putting money into products and services that directly impact patient care,” said Alpidia Barraza, research director, Mobile Health Market News, in a news release. “Of the 120 disclosed investments in 2012, 50 percent were $5 million or under, hence I suspect they are keeping their investments in these companies smaller while they test the waters and wait out the regulatory uncertainty,” Barraza said, commenting on the findings of a new report released by Mobile Health Market News.

In 2012, the mHealth sector saw venture capital investments reach $907.7 million. Q3 and Q4 saw significantly lower financing than the first two quarters, according to the report. The biggest mHealth deals of 2012 include Insight Venture Partner’s $40 million Series A financing to Austin, Texas-based Kinsser Software, which creates Web-based software and healthcare applications for the home health industry, in March; and Qualcomm’s $25.5 million investment in mobile health company Telcare in August, the report shows.