Why Samsung Is Partnering Up with This Healthcare Company
Samsung is following Apple into the wearables market by partnering with this healthcare giant. Will the partnership move the needle for either company?
Brian Feroldi
Jun 28, 2015 at 9:43AM
Consumer electronics juggernaut Samsung Electronics Co. (NASDAQ Other:SSNLF) and medical device powerhouse Medtronic PLC (NYSE:MDT) have been in the news recently after they announced a joint partnership at the American Diabetes Association 75th Scientific Sessions. The goal of the partnership is to combine each of their areas of expertise to make it easier for people with diabetes to successfully manage their disease. The companies have stated their intentions to develop a range of future solutions that will allow for patients with diabetes to have easier access to viewing their data, with the ultimate goal of fully integrating mobile and wearable devices into a complete diabetes management system.
For Samsung, this partnership will provide a foot in the door in the important health-related wearables market, as they are desperately trying to keep pace with Apple. Apple is pushing hard to be an important player in the space, as is evident from the company's recent product launches like Health Kit, Research Kit, and the Apple Watch. Establishing a direct relationship with a medical device giant like Medtronic appears to be a sound strategy for carving out a space in the market.
This deal also makes a lot of sense for Medtronic, as Samsung is a huge player in the consumer electronics market, and it's likely that a huge number of patients using Medtronic's devices already have a Samsung device. Medtronic is currently a huge player in the diabetes device market -- the company rang up more than $1.6 billion in sales in 2014 from the sale of its insulin pump and continuous glucose monitoring devices.
In a separate but related announcement, Medtronic also stated that it received FDA approval for the MiniMed Connect. The Connect consists of a small uploader device that allows for data from Medtronic's insulin pump or continuous glucose sensor to talk directly to a mobile phone. This data can then be viewed directly on the phone itself or relayed to the cloud for viewing on a variety of Internet-enabled devices. Once in the cloud the data could then be shared with a variety of healthcare providers like family members, school nurses, or physicians.
The Minimed Connect will go on sale for $199 this fall, and will initially be rolled out on only to iOS devices like the iPhone and iPod touch in the U.S. Medtronic did mention they plan to make the device available for Android users as well, and the company is planning on taking additional steps with Samsung mobile devices specifically, which includes developing their custom own app to optimize the experience.
If this idea sounds familiar, it should, as Medtronic's smaller but faster growing glucose sensor rival Dexcom (NASDAQ:DXCM) recently launched a similar product. The Dexcom G4 Platinum with Share went on sale earlier this year, and the device allows for Dexcom's receiver device to communicate with Apple's iOS product directly. Dexcom's system doesn't require a separate uploader like Medtronic does, and Dexcom's system is already integrated into the Apple Watch as well.
However, Medtronic's device may be more useful to providers than Dexcom's currently is, as the Connect will share insulin pump related data as well. Perhaps that extra data will be enough of an advantage to entice their users to carry yet another device on them all the time.
