As policy-makers and business practitioners across the globe expend extraordinary effort toward the field of e-health, the thriving development of healthcare-wearable technology is creating great opportunities and posing a remarkable future for healthcare services. This paper employs a game theory model to investigate the dynamics of wearable device market. We extend the two-dimensional product differentiation model by incorporating consumer diversity, consumer density, and firms' big data analytics (BDA) investment strategy. Our model reveals that with differentiated consumer densities firms are more likely to engage in quality competition and the firm that invests in BDA can achieve higher profits. Furthermore, the overall quality of biomedical and healthcare services can be improved under various market conditions. Our findings provide practical guidance to wearable device manufacturers on optimizing competition strategies and offer insights to social planners on potential policy-making to promote better healthcare services.