Medical devices: the industry is splitting in two
Medical device spending compounds at about 7% a year — but that single number hides two industries moving at very different speeds. Between now and 2033 the market adds roughly USD 830bn, and more than three quarters of it lands in just three segments. Wearables and AI-enabled devices alone account for USD 519bn of new market, from bases a fraction of the size of the mature core. Everything that follows is an attempt to work out what a board should do about that.
Investment thesis
Device spending as a whole compounds at about 7%. Inside that, AI-enabled and wearable devices are compounding at 38.5% and 29.5% — fast enough that by 2033 they are no longer niches. The board’s decision is how much of the core hardware margin to redeploy into segments that are currently a fraction of its size.
How to read this market
Grand View Research does not publish a single global medical device market figure. It publishes the industry as roughly thirty overlapping sub-market studies. That is not a gap in the data — it reflects how the industry now behaves.
- The scale anchor. The closest proxy for total device spend is the reimbursement market: USD 777.64bn in 2024, forecast to USD 1,171.72bn by 2030 at 7.07%. Read that 7% as the industry’s underlying clock speed.
- The fast layer. AI-enabled devices (38.5%) and wearables (29.5%) compound at four to five times that clock speed, from bases of USD 13.67bn and USD 54.0bn respectively.
- The service layer. Regulatory affairs, testing services and refurbished equipment all grow at 9–11.5% — faster than the devices themselves, because complexity and cost pressure are both rising.
- The mature core. Implantables (6.1%), medical electronics (6.7%) and interventional cardiology (7.3%) track roughly at or below the industry clock speed.
For the board: any proposal framed against “the medical device market” is measuring itself against a 7% benchmark. Insist that every business case names the specific sub-segment it competes in, because the growth rates differ by a factor of six.
Growth by segment
Two segments break away from the field, as the opening chart shows. Everything else sits in a 6–13% band where execution, not market selection, decides the return.
Table 1 — Growth rates and forecast windows
| Segment | CAGR | Window | What it tells the board |
|---|---|---|---|
| AI-enabled medical devices | 38.5% | 2025–2033 | Software was 51.15% of 2024 revenue — this is a software market |
| Wearable medical devices | 29.5% | 2026–2033 | Consumer-grade is 76.4% of revenue; clinical grade grows fastest |
| Smart medical devices | 12.8% | 2025–2030 | Therapeutic devices are 85.2% of the segment |
| Refurbished equipment | 11.32% | 2026–2033 | Buyer-budget driven; a second source of price pressure on new kit |
| Portable medical devices | 11.3% | 2026–2033 | Monitoring devices are 48.5% of the segment |
| Regulatory affairs services | 9.55% | 2025–2030 | Outsourced providers hold 59.1% — compliance is being bought in |
| Device testing services | 9.49% | 2025–2030 | Evidence requirements rising faster than device volumes |
| Interventional cardiology | 7.3% | 2026–2033 | Representative of the mature therapeutic core |
| Device reimbursement (proxy) | 7.07% | 2025–2030 | Benchmark: the industry's underlying clock speed |
| Medical electronics | 6.7% | 2025–2030 | Component layer; commoditising |
| Electrodes for devices | 6.5% | 2025–2030 | Consumable layer; volume-led |
| Implantable devices | 6.1% | 2024–2030 | Largest mature base; cash generative, not growth |
Market size: base versus forecast
Ranked by market created rather than by growth rate, the order changes. Wearables add roughly USD 277bn and AI-enabled devices about USD 242bn — each larger than the entire current base of any segment below them.
Table 2 — Market size snapshot (USD bn)
| Segment | Base yr | Base | Fcst yr | Forecast | Added |
|---|---|---|---|---|---|
| Device reimbursement (proxy) | 2024 | 777.64 | 2030 | 1,171.72 | +394.1 |
| Wearable medical devices | 2025 | 54.00 | 2033 | 330.50 | +276.5 |
| AI-enabled medical devices | 2024 | 13.67 | 2033 | 255.76 | +242.1 |
| Portable medical devices | 2025 | 85.70 | 2033 | 201.90 | +116.2 |
| Smart medical devices | 2024 | 90.50 | 2030 | 185.60 | +95.1 |
| Implantable devices | 2023 | 91.50 | 2030 | 138.10 | +46.6 |
| Refurbished equipment | 2025 | 21.30 | 2033 | 50.03 | +28.7 |
| Interventional cardiology | 2025 | 11.30 | 2033 | 19.80 | +8.5 |
| Device testing services | 2024 | 9.76 | 2030 | 16.78 | +7.0 |
| Regulatory affairs services | 2024 | 6.70 | 2030 | 11.66 | +5.0 |
| Medical electronics | 2024 | 8.30 | 2030 | 12.20 | +3.9 |
| Electrodes for devices | 2024 | 1.90 | 2030 | 2.70 | +0.8 |
The “added” column is the arithmetic difference between forecast and base values; it is calculated here, not reported. Because the horizons differ, a segment running to 2033 has two or three more years to accumulate than one running to 2030.
Growth versus scale — the bubble view
Plotted against today's base, the trade-off is stark. The two fastest segments sit at the small end of the scale axis; the largest bases sit at the bottom of the growth axis. Nothing occupies the top right.
Small and fast — where the bets go
AI-enabled devices, wearables
Entry cost is low relative to the core, and the value sits in software and data rather than in the hardware. These are also the segments where incumbency counts for least.
Mid and steady — the compounders
Portable, smart devices
Meaningful bases already (USD 85.7bn and USD 90.5bn) growing at 11–13%. Less dramatic than the fast layer but they add USD 211bn between them, and they are adjacent to existing hardware capability.
Large and slow — the funding source
Implantables, interventional cardiology, electronics
At or below clock speed. Manage to cash generation, efficiency and lifecycle extension rather than growth targets, and accept that share defence is the realistic ambition.
The empty quadrant
Large and fast
No segment in this data set is both. Any business case claiming it should be challenged on how it has defined its base year and its market boundary.
Regional position
North America leads nearly every segment on revenue share. But the compliance and manufacturing layer has already moved to Asia Pacific, and the fastest growth follows it.
North America
The revenue base, most concentrated where it is newest
52.86% of AI-enabled devices (2024), 45.71% of reimbursement with the U.S. at 93.87% of that, 43.15% of implantables (2023), 40.0% of portable devices (2025), 35.9% of smart devices and 35.2% of wearables. The newer the category, the more concentrated the region.
Asia Pacific
Growth region — and already the compliance region
Fastest projected growth in AI-enabled devices at 40.84%, and the fastest-growing region for wearables. It also already holds the largest share of regulatory affairs (38.03% in 2024) and of device testing services — the value chain arrived before the demand did.
Europe
Reimbursement-led adoption
Growth supported by healthcare expenditure and favourable reimbursement policy, with government-backed investment in at-home monitoring in markets such as Spain and Norway. Adoption here follows the payer decision, not the clinical one.
Latin America, Middle East & Africa
Early, partnership-led
Growth driven by rising chronic disease incidence and by partnerships bringing existing devices into the market rather than by local product development. Rising healthcare budgets in the Gulf states are the main funding mechanism.
For the board: the regional split argues against a single global product strategy. North America buys evidence and integration; Asia Pacific buys scale and cost; Europe buys what the payer will fund.
What is actually driving demand
The same four drivers recur across every Grand View Research report in this set. They are structural rather than cyclical, which is why the growth rates hold across long forecast windows.
- Chronic disease and ageing. The underlying volume driver in every segment. Non-communicable diseases account for roughly 71% of deaths worldwide, with cardiovascular disease alone responsible for 17.9 million annually — the demand base for monitoring, cardiac and dialysis devices.
- The shift to home and decentralised care. Home healthcare is already 51.8% of wearable device revenue. This is not a future trend; it is the largest application today.
- Remote patient monitoring as a delivery model. Providers are building care pathways around continuous real-time data, which turns a device sale into a recurring data relationship. Medtronic–Corsano and Philips–smartQare are both examples of incumbents buying this capability rather than building it.
- Value-based care replacing fee-for-service. Reimbursement is moving toward paying for outcomes rather than volumes, which rewards devices that can evidence an outcome and penalises those that cannot.
- Sensors, AI and connectivity. The enabling layer — miniaturised sensors, wireless connectivity and on-device AI — is what makes the first four commercially possible at consumer price points.
The affordability ceiling
The most important constraint in this data is not regulatory. It is price. The economics of continuous monitoring are hostile in exactly the markets with the fastest projected volume growth.
Grand View Research cites continuous glucose monitoring at roughly USD 59.70 per sensor with a quarterly subscription near USD 476.47, and notes that premium consumer wearables carrying ECG, blood pressure and sleep apnoea features face the same limit among price-sensitive buyers. Annualised, a single chronic-disease monitoring relationship can approach USD 1,900 per patient.
This matters more than it first appears. The wearable segment is 76.4% consumer-grade, meaning most of the revenue is paid for out of pocket rather than reimbursed. The fastest-growing sub-segment within it is clinical-grade — which depends on reimbursement existing. The growth case therefore rests on a transition from consumer wallets to payer budgets that has not yet happened at scale.
Challenge question for management: for any device in the connected portfolio, what is the annual cost of ownership to the patient, and which payer has agreed to carry it? A cleared device with no reimbursement pathway is a stranded asset.
The value chain is shifting outward
A quiet pattern in the data: the services around the device are growing faster than the mature devices themselves, and they are increasingly bought rather than built.
Compliance is being outsourced
Regulatory affairs — 9.55%, USD 11.66bn by 2030
Outsourced providers already hold 59.1% of this market, and Asia Pacific holds the largest regional share at 38.03%. Regulatory capability is becoming a purchased input rather than a fixed internal cost.
Evidence is being industrialised
Testing services — 9.49%, USD 16.78bn by 2030
Growing faster than device volumes because approval standards are tightening. Biocompatibility alone accounted for USD 4.84bn of the USD 9.76bn 2024 market.
Capital equipment has a secondary market
Refurbished equipment — 11.32%, USD 50.03bn by 2033
Driven by hospital cost pressure, by demand in rural and underserved regions, and by sustainability rules encouraging reuse. Either a new channel or a competitor to new equipment sales, depending on whether you participate.
The implication
Fixed-cost base is becoming variable
Compliance, testing and second-life equipment can all now be bought. That lowers the barrier for the specialist entrants competing in the fast segments — and removes some of the scale advantage incumbents have relied on.
Competitive landscape
The device incumbents now share the fastest-growing segment with consumer electronics companies. That is the single most consequential change in the competitive set.
Device incumbents
Medtronic, Abbott, Philips, GE HealthCare, Boston Scientific, Fresenius, Dexcom, OMRON, Insulet
Strengths: regulatory approvals, payer relationships, broad portfolios, R&D depth. Weaknesses named in the research: slow decision-making on emerging technology, and high operational and regulatory cost bases that compress margin flexibility.
Consumer technology
Apple, Samsung, Google, Garmin, and low-cost entrants
Competing on ECG, heart rate, blood pressure, sleep and blood oxygen tracking with brand recognition and distribution no device maker can match. Lower-cost manufacturers take the price-sensitive emerging markets. Ecosystem integration, not sensor accuracy, is the differentiator.
Specialist innovators
AliveCor, VitalConnect, iRhythm, Withings, Oura, Ultrahuman
Agile on AI and cloud analytics, focused on narrow clinical applications. Constrained by capital and distribution — which is precisely what makes them acquisition targets. VitalConnect raised USD 100m in February 2025; Oura acquired Sparta Science in October 2024.
What this means
The moat has moved
In the mature segments the moat is still regulatory and clinical. In the fast segments it is distribution, ecosystem and data. Those are different assets, and the incumbent balance sheet does not automatically buy them.
Strategic priorities
Priority one
Treat software as the product
Software is 51.15% of the AI-enabled device market, the fastest-growing segment at 38.5%. An AI capability bolted onto a hardware roadmap will not capture it; the software has to be the thing being sold, priced and updated.
Priority two
Buy the connected position
Organic entry against Apple, Samsung and funded specialists is slow. Partnership or acquisition of focused analytics and sensor players is the realistic route to a position inside the 2033 forecast window.
Priority three
Build the reimbursement case first
Engage payers before design freeze and fund real-world evidence as a launch condition. In a value-based world the evidence package, not the clearance, is what unlocks the revenue.
Priority four
Participate in the secondary market
Refurbished equipment grows at 11.32% whether or not we participate. Running a certified refurbishment channel captures the cost-sensitive account and controls the pricing of our own installed base.
Priority five
Run the mature core for cash
Implantables at 6.1% and electronics at 6.7% should be managed to margin and lifecycle extension. Holding them to growth targets produces value-destroying investment in categories the data says will not deliver it.
Priority six
Differentiate the geographic model
Evidence-led and integrated in North America; cost-optimised platforms and local partnerships in Asia Pacific; payer-led product design in Europe. One global product strategy will underperform in all three.
Risk radar
Reimbursement gap in connected devices
The clearest risk in the data. Consumer-grade is 76.4% of wearable revenue while the fastest sub-segment is clinical grade — a transition from patient wallets to payer budgets that is assumed rather than demonstrated.
Mitigation. Make payer commitment a stage gate. No connected product proceeds past design freeze without a named reimbursement pathway and an evidence plan to support it.
Consumer electronics entrants
Apple, Samsung, Google and Garmin compete in the fastest-growing segment with distribution and brand advantages that cannot be matched through the medical channel.
Mitigation. Compete where clearance and clinical validation are required rather than head-on in consumer wellness; partner on ecosystem integration instead of building a rival platform.
Margin compression in the mature core
Implantables and electronics grow at or below clock speed, while a USD 50bn refurbished market applies downward pressure on new equipment pricing.
Mitigation. Shift mix toward software, services and consumables; participate in refurbishment rather than ceding the channel.
Data privacy and cybersecurity
Named as a restraint across the connected-device reports. A continuously monitoring device is a continuously transmitting device, and the regulatory exposure scales with the installed base.
Mitigation. Treat security as a product requirement with board-level reporting, not an IT function. Assume a breach in a connected portfolio is a recall-class event.
Regional concentration
Over half of AI-enabled device revenue sits in North America, and the U.S. is 93.87% of North American reimbursement. A single policy change in one market moves the forecast.
Mitigation. Build the Asia Pacific position now, while the growth rate is still ahead of the revenue — including local manufacturing and regulatory presence.
Recommended next steps — 90 days
- Map the portfolio against these segments
Assign every product line to a segment in Table 2 and calculate what share of revenue sits above and below the 7.07% clock speed. This single number frames every subsequent decision. Owner: strategy. Due: day 30.
- Run a reimbursement audit of connected products
For each connected or monitoring product, document the payer pathway, the annual patient cost of ownership, and the evidence supporting it. Flag anything without a named payer. Owner: market access. Due: day 45.
- Short-list three to five targets
Focused analytics, sensor or clinical-grade wearable players, with indicative valuations and an explicit view on whether we are buying technology, distribution or an evidence base. Owner: corporate development. Due: day 60.
- Test the secondary market
Pilot a certified refurbishment channel on one equipment line to understand margin, cannibalisation and account access before committing at scale. Owner: commercial. Due: day 75.
- Define the Asia Pacific plan
Regulatory presence, local manufacturing or partnership options, and a cost-optimised portfolio definition for volume markets. Owner: regions. Due: day 90.
Decision requested: approval of steps 1–5, and release of the corporate development mandate at step 3 with an indicative capital envelope.
Method and caveats
All market sizes, CAGRs, regional shares and segment splits are from Grand View Research industry reports, accessed September 2026. Grand View Research states that its estimates are built from bottom-up country modelling, parent-market analysis and commodity-flow analysis, using proprietary databases, executive interviews and regulatory analysis with internal peer review.
Three caveats the board should hold in mind. First, base years and forecast horizons differ across reports — 2023, 2024 or 2025 bases running to 2030 or 2033 — so cross-segment comparison is directional, not precise. Second, the segments overlap: a continuous glucose monitor can sit simultaneously inside wearables, portable devices and AI-enabled devices, so these figures cannot be summed to a market total. Third, the “added” column in Table 2 and the clock-speed comparison are calculated here for framing; they are not published figures. Forecasts at these growth rates carry wide confidence intervals and should not substitute for diligence on any specific transaction.
Medical Device Industry — Board Briefing, September 2026. Source: Grand View Research segment reports. Prepared for discussion; figures are third-party forecasts and carry estimation uncertainty.