A few years ago, telecom companies such as Verizon ($VZ) and AT&T ($T) made big bets on med tech. But the carriers didn't meet their goals, leaving tech giants including Google ($GOOG) and Apple ($AAPL) with ample room to charge ahead.
Verizon and AT&T targeted healthcare as a growth market as early as 2009, Bloomberg points out. The cellular business was slowing down, and big telecoms were looking for new sources of revenue.
Both Verizon and AT&T developed high-tech products for the market. Verizon launched Virtual Visits, which comprise video cameras, computers, software and data connections that help put patients and doctors together in teleconferences. AT&T created a couple of products, including slippers with sensors to monitor patients' walking and connected pill bottle caps to drive drug adherence.
But the efforts failed. Verizon lost out to smaller telemedicine companies with a narrower focus, such as MDLive and American Well, and shut down Virtual Visits after less than a year of slumping sales. And AT&T learned through its pill bottle cap "that it was better to sell through health-care providers which handled the insurance payment," company spokesman Fletcher Cook told Bloomberg.
The failures point to carriers' inability to double down on healthcare and gain ground in hospitals, Dr. Lee Schwamm, medical director of telehealth at Massachusetts General Hospital, told the news outlet. Companies such as Verizon and AT&T "haven't done a good job of moving into the hospital setting and investing the time and money to live in the footsteps of the providers," Schwamm said. "It's always been a side business to them."
As a result, the companies are losing out in a fast-growing market. The U.S. has the largest market for telemedicine, Bloomberg points out, with $14.4 billion in global business in 2015 that is expected to grow to $34 billion by 2020, according to Mordor Intelligence data cited by the news outlet.
Even though Verizon and AT&T have lagged behind in telemedicine, they aren't giving up yet. AT&T is aiming to open its first healthcare technology development lab next month in Houston. "We are taking ideas from developers to prototypes and then to hospitals with a goal of seeing it through the eyes of the consumer and the medical professional," Chris Penrose, AT&T's senior vice president of Internet of Things, told Bloomberg.
Verizon is also looking for other avenues for growth. The company is working with Visiting Nurse Service of New York, a not-for-profit home healthcare organization, to redesign its information systems to reduce costs and make technology more accessible for providers.
- read the Bloomberg story