Tag Archives: Clarius

Signify Premium Insight: Clarius Encourages its Customers to Speak Up

Earlier this month, handheld ultrasound specialist Clarius Mobile Health announced it would be bringing a capability dubbed Voice Controls to its ultrasound scanners.

The new feature, which is available to all customers on Clarius’ Membership subscription service, allows users to control a number of imaging parameters with only their voice, enabling their hands to remain free to perform imaging examinations. The tool, which is powered by AI, allows users to adjust settings such as gain and depth, freeze images, switch imaging modes and to capture images and videos.

It is not the first time voice control capabilities have been offered on ultrasound devices, but does it make sense for Clarius’ customers, or is it just a gimmick?

Signify Premium Insight: Clarius gets a Handle on Ultrasound AI

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Handheld ultrasound vendor Clarius recently announced the launch of an AI marketplace. Clarius says the platform has been established to enable algorithm and software developers to bring their solutions to market more efficiently thanks to integrations with Clarius’ wireless ultrasound systems.

The marketplace is launching with six partners, including ThinkSono, DESKi and Deepecho, and is available to users who have subscribed to Clarius’ Membership programme. As competition hots up in the handheld ultrasound market, will Clarius’ new marketplace enable it to stand out?

The Signify View

The potential AI holds to improve patient care means that it is among the most eagerly watched areas of medical imaging technology. In radiology settings, where many of medical imaging AI’s vendors are focused, algorithms have been used to increase the efficiency of performing imaging procedures and delivering the diagnoses, or as a way to avoid invasive diagnostic procedures, improving  clinical workflows. In ultrasound, however, and particularly handheld ultrasound, there are other more pressing clinical priorities.

Chief among these is enabling less experienced ultrasound users to effectively make use of the growing abundance of handheld ultrasound systems. While there are numerous tools that can fulfil this role, solving the last-mile challenge of making them accessible to ultrasound users is one that is yet to be conclusively solved. Clarius’ platform seeks to make great strides in this regard. While handheld ultrasound vendors have sought to add image guidance capabilities to their products through bespoke AI partnerships, such as that agreed between Butterfly Network and Caption Health, Clarius has sought to offer a more open approach.

There are advantages to the partnership model. There can be more information sharing between partners, and solutions and hardware can be better tailored to one another. However, such advantages come at a cost. Creating such partnerships and ensuring tight-knit integration between the products of two or more companies can require significant resource. What’s more this investment could be for nought if the partner exits the market, or a competitor releases a drastically superior product.

Adopting a broader platform-play approach such as Clarius’ marketplace, however, means that the vendor can more quickly and more flexibly bring a greater range of AI capability to its hardware. It is not only a rapid method but a flexible one too. Its “try before you buy” programme, gives Clarius customers confidence to use AI models within their own imaging environment.

Ultrasound’s Guiding Hand

This is significant. Compared to other ultrasound segments, the price of handheld systems is low. As such Clarius, and other handheld ultrasound vendors require high sales volume to derive significant revenues. To achieve such sales, however, vendors are going to have to entice significant numbers of new customers to purchase systems, many of which are inexperienced or novice ultrasound users. Vendors therefore must facilitate the use of handheld ultrasound to these users, with AI being one of the most promising methods of enabling this use.

Such a requirement means that unlike most radiology AI, which is used after image acquisition on the PACS, handheld ultrasound AI is most useful on the device itself, to guide in real time the capture of images and assist with diagnosis. In offering a platform for AI, Clarius is able to efficiently supply a range of algorithms to assist in this aim. Having this capability will both encourage customers who have not yet purchased a handheld ultrasound system to make the leap with Clarius, but also help persuade users to choose Clarius over one of the increasingly numerous alternatives in the handheld space. Other vendors may have strength in specific applications (e.g., Butterfly Network’s three-way partnership with Caption Guidance and Ultromics), but Clarius’ platform means it can partner with a wider array of AI vendors, enabling its probes to be used across a greater range of clinical applications, making it an arguably more versatile solution.

These benefits, however, may not be realised right away. While Clarius’ platform makes it easier for users of the scanners to find, purchase and utilise AI capability, there must also be a desire from customers to actually use it. This has often been a stumbling block for marketplaces in radiology. While one of the main reasons many radiology AI marketplaces have failed to gain traction, challenges around integration, are less of an issue on handheld ultrasound due to the AI being embedded on the modality, other challenges such as the support needed to fully realise a solution’s potential and a lack of framework to assist providers with algorithm selection could still be barriers to the platform’s success.

There must also be attractive algorithms available. At launch Clarius has secured six partners targeting some important use cases such as teleultrasound or cardiac image capture guidance. However, the partners themselves are not the most established and have limited brand recognition, so may be of limited attractiveness to owners of Clarius’ handheld system. There are also more significant barriers preventing their clinical use. As written about in Premium Insights passim, regulatory approval is a significant milestone for aspirant AI vendors, as well as being an essential commercial step. None of the algorithm developers whose products are featured on Clarius’ marketplace have received regulatory clearance. So, although they can be utilised for some tasks such as training, their clinical diagnostic use is limited.

Variety Counts

This limited clinical utility is a challenge that Clarius will have to face if its AI platform is going to become a significant differentiator for customers. Longer term, Clarius would also do well to host a greater range of algorithms from a greater range of vendors on its platform. Increasing the number and variety of partners available in the marketplace will enable the marketplace to become almost a testing ground for Clarius. Through its platform it will have oversight of which algorithms are popular, which gain traction among users, and which represent opportunities for tighter integration, or more bespoke partnerships.

A greater number of partners will also help increase the visibility of Clarius’ platform. Each individual algorithm vendor is motivated to engage in market education and promote their own solutions. In encouraging potential customers to choose their products on Clarius’ platform, each vendor is also drawing attention to that platform.

Another challenge in the longer term is generating revenue from the AI solutions available on the marketplace. The affordability of Clarius’ scanners, with most models costing $3,400, and the budget limitations of most handheld ultrasound customers, means that the revenues derived from solutions on the marketplace will likely be modest for the algorithm developers themselves. With Clarius taking a slice of these revenues generated for hosting the AI solution on its platform, the actual value of a sale of an algorithm is, for Clarius, slight.

Hands-on Service

The handheld ultrasound vendor will instead derive value via another means. Instead of taking revenues from sales of algorithms, Clarius hopes that the inclusion of an AI platform, and the ready availability of solutions for customers will be enough to encourage customers to take the plunge on a Clarius handheld ultrasound system. As this happens, Clarius will hope to not only benefit from increased sales of ultrasound systems, but the larger customer base, and the restriction that the AI platform is only available to subscribers of Clarius’ ongoing service programme, will mean the handheld vendor will hope to grow its service revenues. Over the long-term, these service and subscription revenues become increasingly important, bringing subscribers onboard into an ecosystem that allows the continual up sale of opportunities of greater amounts, preventing customers from switching to another vendor’s products. What’s more, while hardware sales are crucial in helping establish a user base, sales of software solutions often offer a higher margin.

As such, while Clarius’ launch of its AI platform is notable, what is more important is what it signifies. While the handheld market is growing rapidly, and according to Signify’s upcoming Ultrasound Handheld Market Deep Dive is set to reach $589m by 2026, its full potential in attracting and enabling new users, has not yet been realised. Clarius’ platform isn’t the only answer, and other initiatives from other vendors also indicate the strategies being taken to reach these users. However, the fact that one of the most prominent specialist vendors in the handheld segment has launched a platform, stating its intent to solve the last mile challenges of AI use in handheld ultrasound, while giving algorithm developers a direct route to users’ hands is significant.

Amidst growing competition in the segment and an increasingly discerning customer base, Clarius hopes its platform will help close its fist on the handheld ultrasound market.

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Signify Premium Insight: Exo Focuses on Ultrasound Acquisition with Medo.ai

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Last week, Exo made headlines in the blossoming handheld ultrasound segment by announcing the acquisition of AI specialist, MEDO. The deal seeks to make Exo’s as-yet unreleased handheld ultrasound system easier to use, and therefore accessible to a wider range of professionals.

MEDO’s Sweep AI solution achieves this by automating parts of the ultrasound image capture and interpretation workflows, which, according to the vendor, lowers the level of expertise required to diagnose common and critical conditions.

As well as gaining Sweep AI, Exo will also pick up MEDO’s two US-FDA-approved AI algorithms, one for hip dysplasia screening and one for thyroid imaging, and its library of millions of ultrasound images and longitudinal health data.

The deal will set Exo apart from its competitors, who have so far tended to only partner with AI firms, but will it be enough to elevate it beyond them?

The Signify View

Apocryphal though it is, a quote attributed to iconic IBM CEO and Chairman Thomas J. Watson about there only being a world market for “maybe five computers” would have seemed plausible enough in 1943 when it is alleged to have been said. Not only were these machines vast, fragile and fickle, more akin to a plant room than a modern laptop, but they were also horrendously complicated to operate. While computers got smaller and less temperamental, and sales rose at major corporations and research institutions, they very much remained the preserve of professionals trained in their use. It wasn’t until the 1980s, when graphical user interfaces started to emerge, that more inexperienced users, who could then interact with a computer through icons rather than codes, started to purchase systems en masse. In making devices easier to use, computer manufacturers were able to sell to an entirely new market, the home market, rather than squabbling to take business customers off one another.

This is akin to the opportunity Exo has with its acquisition of MEDO. Exo is looking to sell its as-yet-unreleased handheld ultrasound scanner, a device that will be competing with second and third generation devices from its competitors, so needs to represent a compelling proposition from the outset.

While Exo is not looking to sell ultrasound systems to consumers, it aims to simplify image capture through the use of AI, thereby hoping to avoid a ruthless race to the bottom against the world’s largest ultrasound imaging vendors. Instead, it aims to open new markets, selling a clinician their first hand-held ultrasound device, rather than having to displace a rival. As such, while MEDO does bring with it two US-FDA-cleared algorithms, of greatest appeal to Exo will be its Sweep AI image capture technology.

Buy or Borrow?

Exo isn’t the only vendor to realise this opportunity, with what is likely to become the vendor’s closest competitor, Butterfly Network, also seeking to simplify image capture through a partnership with AI-developer Caption Health. However, while partnering has its own advantages, including the requirement for less investment and less commitment, acquisition could, in the longer term, give Exo the edge.

The instantaneous nature of ultrasound means that many of the modality’s most valuable solutions will be those that are embedded on devices and used during image acquisition rather than being utilised post-acquisition on the PACS. By acquiring MEDO, Exo will gain granular control over its technology, enabling the ultrasound vendor to more effectively integrate its Sweep AI into the upcoming handheld device. Instead of being constrained by the limitations of a partnership, even an exclusive one, Exo can put MEDO’s technology and approach at the heart of its device. It can intertwine hardware and software in such a way that a partnership, where there is always the risk of separation, simply cannot offer.

Acquisition also grants the acquisitor strategic control. Caption Health’s primary focus is cardiac imaging. Through its exclusive partnership, Butterfly Network will likely have some influence over Caption Health’s strategy, but this will fall far short of the absolute control that Exo will command over MEDO. This could prove crucial. Cardiology is a sizeable and significant imaging target, but it is still only one clinical area, a factor that could prove limiting over time.

Bigger is Better

The low cost of handheld ultrasound devices means that, unless sold as part of a particular programme or as an add-on to a larger medical imaging deal, scale is essential for commercial viability. Achieving this volume by selling to existing ultrasound users will be nigh-on impossible, particularly as the segment becomes more competitive and providers become increasingly entrenched in their vendor of choice.

Instead, this scale needs to be attained through new users, such as GPs, nurses and midwives. MEDO’s Sweep, with its universal applicability, as well as Exo’s ability to direct software development into any particularly lucrative burgeoning opportunity could grant it an opportunity to make money where others have been forced to accept losses. This is particularly true as the low cost of the devices themselves means that additional services such as add-on solutions and software subscriptions will be critical. For these opportunities to be leveraged, a critical mass of users must be reached.

In this regard, acquisition could also prove preferable to partnership, albeit at the expense of greater developmental resource. It is likely that Exo will continue to offer MEDO’s hip dysplasia and thyroid applications, although, as niche use cases, they will not be as high priority as its Sweep AI technology, while also continuing to add additional clinical applications over time. It would be both quicker and cheaper to offer additional tools through partnerships. But while boasting about additional capability might entice some customers, taking a modest percentage of a relatively small sum from the sale of a partner’s solution is unlikely to hold much sway for a handheld vendor such as Exo, leaving it a long way off the elevated service revenues it seeks.

Deals to be Done

While there has been collaboration between AI developers and handheld ultrasound vendors before, until now, most of these relationships have taken the form of partnerships. Given the advantages acquisition could offer in terms of tighter integration, the growing competitiveness of the handheld market and the need to target new users to reach the necessary sales volumes, other handheld companies could look to forge similar deals.

Price could be a barrier. Terms of Exo’s deal haven’t been disclosed, but the cost of the relatively modest AI outfit will have been easily absorbed by Exo’s total funding of more than $320m. Other vendors may not be so lucky. If their chosen targets have already had more commercial traction or been able to secure significantly higher funding than MEDO, or if an ultrasound vendor has raised less money, or is taking heavy losses, such a purchase could be well out of reach.

There are other options, with a large international imaging vendor like GE HealthCare currently having the means to pick up an AI specialist. The vendor currently partners with Intelligent Ultrasound, a London-listed ultrasound AI and training simulators specialist. The healthcare giant could be tempted to purchase the AI developer, which has a market capitalisation of around $43m. GE does, after all, pride itself on its global ultrasound market leadership position, has recently refreshed its own handheld offering, and, with its acquisition of BK Medical and its investment in Pulsenmore shown its willingness to invest in ultrasound. However, other ways to formalise the partnership are also possible, with licensing agreements, for example, another way to shore up the use of Intelligent Ultrasound’s technology for the long term.

Whether such deals come to pass remains to be seen. Doubters will continue to see the handheld ultrasound market as a niche, a $200m fragment of a $7.1bn market, in which even the most prodigious player is floundering financially. With such a worldview, the flexibility and affordability of partnerships continue to be the preferred practice. For believers however, Exo has been shrewd. In the same way ‘home computing’ grew out of improvements in affordability and, crucially, usability, MEDO’s technology could help handheld ultrasound find its way into the pockets of countless doctors, nurses, and other clinicians. In such a way a lucrative new customer base could be created, and those vendors that seized an early opportunity to access this base could rally.

In acquiring MEDO, Exo has revealed its hand and quietly raised the stakes. Now it can wait to see if others share its convictions.

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Signify Premium Insight: Clarius Claims Specialists in Tilt at Crowded Market

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In January, Clarius Mobile Health launched the latest version of its wireless handheld ultrasound scanners. The third-generation scanners are available in 10 different varieties, including a multipurpose scanner, as well as a range of nine speciality scanners, targeting a diverse selection of use cases, including abdominal, lung, cardiac, vascular, MSK, dermatology, and several veterinary applications.

Clarius says that the new models are around 30% smaller and lighter than the outgoing models and have been developed to be as easy as possible to use, with many settings and parameters being automatically set by AI. Also supporting new users are new pricing structures, including a subscription service, and an app with improved functionality.

The Signify View

The handheld ultrasound market is becoming and will for the foreseeable future continue to become more crowded. After a long period, in which the young market was dominated by just a handful of players, there has been a veritable explosion of vendors utilising new ultrasound technology to develop their own products. The results of this explosion are evident, with a whole host of vendors having released or planning to release their own handheld ultrasound systems. This list includes: GE, Philips, Fujifilm, Butterfly Network, Exo, Vave, EchoNous, Pulsenmore, Healcerion, eScopics, Biim, Somax Systems, Sigmax and many others. According to Signify Research’s Ultrasound Equipment – World Market 2021 report, all these vendors will be chasing a market forecast to be worth less than $270m in 2022. With that being the case, it will become increasingly difficult for vendors, and their products to stand proud of the milieu in order to secure sales.

Clarius has found one way to address this issue. Instead of targeting the hospital market and traditional POCUS applications, which is relatively crowded, being cornered by the likes of Philips, GE and Butterfly Network for handhelds, as well as vendors of compacts and carts such as Fujiflim SonoSite and Mindray, Clarius has focused its attention on clinical speciality markets in outpatient settings. This is the rationale behind the development of multiple speciality scanners in addition to a general-purpose scanner, instead of the more common approach of developing a single, multi-purpose system. Ultimately, to sell to specialists, Clarius thinks specialist products are required.

Trying to Stand Out

One of the changes the vendor has made, which better aligns it with its peers in the handheld ultrasound market is in offering a subscription-based purchase option. While standalone purchases of the devices can still be made, from $4,995, Clarius is now also offering the devices for a lower price of $2,995, if purchased with a membership costing $595 annually, which grants users access to advanced software features, including measurement packages and advanced workflow tools, and unlimited cloud exam management. This more flexible pricing puts the vendor on an equal footing with other leading vendors in the handheld ultrasound market. Clarius will hope it allows them to sell more scanners, and retain customers’ business on sticky, recurring deals. However, even if this is not the case, it’s competitive pricing will at least ensure that it is not spurned based on cost.

Where it does differ, however, is with regards to its useability focus. Other handheld vendors have tended to adopt AI in such a way as to enable novice ultrasound users to, with minimal training, perform advanced clinical examinations. Butterfly Network’s partnerships with Caption Health and Ultromics are a prime example of this, with the collaboration enabling users to both perform, interpret and quantify cardiac examinations. Clarius, in contrast, is instead focused on streamlining and automating the acquisition of images and incorporating use of the scanner into a physician’s workflow. Many specialists will use their Clarius scanners for a single task or handful of tasks. For the vendor it makes sense to use AI to make the completion of these specific tasks easier, rather than using AI to add additional capability, that is unlikely to have any meaningful sales impact in Clarius’ target markets. What’s more this focus on useability avoids some of the challenges that other vendors developing AI capability will have to face, such as attaining regulatory approval, and undertaking clinical validation. These are expensive and time consuming, so focusing on using AI for workflow means that Clarius can invest in other areas, or offer devices at a lower cost, depending on which it deems will net the most sales.

Segment Sophistication

The new devices from Clarius represent the vendor’s third generation of handheld ultrasound scanners, as such, unlike their peers which are still selling first and second generation hardware they have had two opportunities to refresh and improve the product. This is important as it will increasingly entice customers who are not at the forefront of technological adoption. Innovators and early adopters will be more willing to accept compromises in order to benefit from a novel device’s advantages. As handheld vendors target larger and larger potential markets, however, they will need to reach more mainstream customers, which will be less forgiving. This change is evident in Clarius’ new scanners. While the vendor highlights the scanners’ improved image quality, with the L20HD the only wireless 20 MHz scanner available, and resolution that Clarius says has only previously been seen in cart systems, the scanners also feature several ‘quality of life’ improvements. Factors like improved battery life, improved wireless connectivity, and liquid cooling to enable the scanners to be used for longer periods mean that specialists will be able to adopt the scanners without having to make significant compromises or endure significant periods of down time. Furthermore, the latest version of the Clarius app (Clarius Ultrasound App 9) offers a more streamlined, intuitive and personalised user experience. For example, the user can enable and disable advanced settings to only show what is needed for routine exams, the full screen mode setting while scanning automatically hides menu options and tools, and customised pre-sets.

These sorts of iterative improvements will become commonplace, with a number of vendors expected to announce new versions of their own systems in the coming year, including a new version of Lumify from Philips. However, this approach is not without its challenges. Vendors will have to continually innovate to ensure their devices are competitive with those of other handheld vendors. However, such development can prove costly, which could be particularly onerous given the low selling price of handheld ultrasound devices. This will prove to be a delicate balance for vendors, which will need to continue to make improvements to their products, particularly as the market is growing and they are trying to secure first time and less experienced users, without overextending themselves, and being unable to spend on other critical activities, such as market education and the development of sales and support networks.

 Large Players and Small Markets

Despite the costs, this rapid development and iteration of features and devices could still be advantageous to the young specialist vendors. For vendors such as Clarius, handheld ultrasound is the top, if not only, priority. Some vendors do have other interests; Butterfly Network’s roadmap in its investor presentation points to the vendor releasing a wearable in 2023, but, with the firm anticipating 2021 revenue of $61.5-$62.5m against an original forecast of $78.1m, it, like other specialist vendors, can’t afford to take its eyes off its core business. This is in contrast to the larger international vendors. Despite its rapid growth, at $270m, the handheld ultrasound market is still a small niche for multimodality vendors, which, aside from their activities in other modalities, imaging IT, AI and services, will be primarily concerned with the larger cart and compact categories, forecast to be worth $5.4bn and $1.2bn in 2022 respectively. These vendors will look to secure revenue and capture share in the growing handheld segment where possible, but not at the expense of categories with potential revenues magnitudes higher.

This, ultimately, leaves one of the quickest growing ultrasound markets being mostly driven by a cohort of young, hungry vendors, innovating and iterating at a frantic rate. Some of those that are more developed and releasing refined second or third generations of their products, as is the case for Clarius, may have a head start, but increasing competition from an increasing number of entrants could still make life difficult. Clarius has been shrewd in its targeting of specialist clinicians, giving it some breathing room, but as it and other handheld vendors continue to develop and release systems the market is at risk of becoming a bloodbath, with a number of vendors embroiled in a bitter battle for market share, amidst ever decreasing margins. Regrettably, there are likely to be failures as the younger handheld ultrasound vendors attempt the transition from start-up to scale-up and eventually become established and trusted vendors.

With this fate on the horizon, Clarius, and its peers, need to plant their flags in the market. Grasp market share now, and tie customers into their subscription plans and ecosystems. The vendors that are able to achieve this are those that will be able to maintain the pace of iteration and feature expansion, and that, in the long run, will help them flourish.

 

About Signify Premium Insights

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here