Does Hearing-Aid Industry still exist?

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#1

Curious. What do you all make of this opinion piece?

Exactly 25 years ago Widex introduced Senso , the first digital hearing aid, utilizing a 3-channel dynamic-range compression and a frugal feedback-management system. Back then, in 1996 the hearing aid industry consisted of companies designing and marketing physical devices, most of those still analog amplifiers with tiny microphones and speakers, manufactured in Europe or the US by manually soldering those simple electronic components together.

Last week Sonova , a leading hearing aid company, announced the acquisition of Sennheiser , a traditional German maker of consumer electronics. An outsider might have thought that in the last 25 years nothing had changed, and the hearing aid industry is still about manufacturing small “things” with microphones and speakers inside.

New Headphones?

But Sennheiser was acquired for a round sum of 200 Million Euro , which indicates that the importance of the deal stretches beyond the mere hardware synergies: the boundaries between the consumer electronics and hearing aids are rapidly disappearing, the use-case is changing fast - and for hearing aid companies it very much makes sense to start looking outside of the walls of their hearing-aid shops. And Sennheiser is a ticket to enter this outside world .

This acquisition might also mark the end to the retail era . For 20 years hearing aid manufacturers have been amassing retail stores, shifting their competitive advantage from product innovation to distribution power. Location, location, location! The success of this approach provided huge profit margins, but also curbed product innovation, resulting in the commoditization of the hardware.

In other words: The economies of scope and scale were skillfully utilized for twenty years, while the hearing aid product remained firmly bonded to a Hi-Pro box from the late 1980s.

Where are we now?

The hearing aid industry is still referred to as the " Big 6 ", describing the consolidation and the seemingly oligopolistic practices. Today, it is hard to tell what does this mean. Does Amplifon now belong to the “Big 6”? Or Costco ? Where does this industry begin, and where does it end?

In any case, the definition of the " Hearing aid industry " needs a revision - we even could retire this term altogether, and admit that the use-case of “hearing loss compensation” has spread to many products and industries:

Bose, Nuheara, Whisper…

Bose just has introduced a “self-fitting” hearing aid, that physically resembles traditional hearing aids. However, it was from the beginning designed for user-fitting and carrying such a strong brand, this product is firmly anchored in the realm of consumer electronics. This might be the first important device in the ambiguous OTC category.

Hearable companies as Nuheara are claiming to compensate for hearing loss - with a device that initially is developed for streaming of audio content. Just an opposite use-case as a hearing aid that can stream a telephone call.

After a long, rigorous reign of the “big 6”, first hearing start-ups such as Whisper AI are introducing real innovations for hearing aids. With investment money in abundance, other hearing start-ups might soon appear from a stealth mode.

Companies such as Intricon and Austar are producing OEM hearing aids, based on same HW platforms by ON-semiconductor. Another sign for the commoditization of the hardware. Before long, those devices will be open for innovation outside of the device itself.

Hearing test apps such as Mimi are used to personify TV sets, telephones, and other audio devices. -Another dilution of the use-case.

Since “Audio” has become a buzzword, Facebook reality labs and other players with platform business-model are attracting talents from the traditional hearing aid companies. The future might already be happening there.

OK, boomer!

Whatever the name - the industry of hearing devices seems in turmoil. The use case is changing - and with it the business case. Long gone are the days when the hearing aid industry was a small, closed community that relied on the aging generation of “baby boomers” as the guarantee for growth. For decades, “boomers” were an obligatory notion in every corporate report, a universal promise for every business projection. The world seemed OK.

Today, the “boomers” are rarely synonymous with wealthy best-agers. They quietly disappeared from the shiny pages of corporate reports, at the same time as in the real world, they became subject to jokes and pity, a clueless generation waiting to be replaced by the generation of their children. And this new generation seems to dare questioning everything - even the use of hearing aids.

Source:

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#2

Comes off as a rant to me that doesn’t back up it’s basic assertion. Bose’s latest foray looks remarkably like, well, a hearing aid. I think there have been notable advances and we’re certainly well past using HiPros to program hearing aids (although there are still a few that can use one)

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#3

As a boomer, and a person that loves technology I always look forward to improvements in the devices that use and enjoy. But when it comes to hearing aids, it is how well they work overall for my hearing needs that matters the most. Connectivity while important is secondary, as is how they look.

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#4

I think technology is overlapping different industry targets. The big “manufacturers” like Sonova are no different than other hearing technology fields where the processing and presentation of audio borrow back and forth. Hearing aids aren’t manufactured as they were 20 years ago. Sonova and the other big “5” create specs of hardware they need and obtain it from the same subcontractors as other electronic audio devices. They buy chips from one contractor, they don’t make their own, the same with virtually every part from the case to the mics to the receivers they choose. And I expect all 5 draw from the same pool of component manufacturers.

The “magic” they bring is in the software, the algorithms processing the input to output (not phone apps or programming software, although that is part of the product offered). That code loaded into the HA is their valued contribution. China can assemble the hardware as well as a European or US HA builder, and for less money, but it’s the software and the sound processing code that makes it a “medical device”.

If you think of what’s developed in parallel you have companies like Bose and Sennheiser that invest not only in designing the drivers and headset portions, but complex sound cancellation algorithms that rely on multiple mics pulling in the ambient sounds and processing a cancellation sound to eliminate that ambient noise from the primary audio driver that’s in the headphones. Not super different than what Sonova or Widex does. And those companies (let’s not forget with consumer giants like Sony) are well capitalized and understand retail marketing.

Seeing these pieces of the audio industry begin to merge shouldn’t be unexpected. Sooner or later people were going to catch on that a pair of $200 AirPods Pro could cut distracting ambient noise as well as a $2,000 HA. It’s where the whole push for regulated, OTC devices came from.

For the HA companies looking at encroachment on small powerful retail audio products on their turf, adaptation is necessary or become irrelevant. Besides, a company like Sonova also brings some very useful processing software that can be adapted to make even better consumer audio products.

I don’t believe it’s the end of the hearing aid industry any more than powerful, sophisticated HAs now presenting streaming content will kill off consumer sudio products. But there can and will be a lot of cross pollination as new positions and corporate strategies are planned looking out for the next 5-10 year roadmaps. I do think the more rapid turnover in the consumer market of better performance (at least perceived) is a lot faster than the typical hearing aid line develops along. But the ability is there to speed that development time up for hearing devices. Despite the belief in the slow forward improvements seen with a HA line, we already see how a large consumer marketer like Costco brings in new versions of the KS series aids with a faster turnover based on this year’s model is better than last year. Was the KS9 bad? No, but folks now want the KS10 that launched, what was it, barely a year after the 9’s were offered? That’s a consumer base turnover speed. Not the careful small steps every few years that had been seen by the big 5 in years past.

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#5

Over the counter aids may be great for people with mild to moderate hearing loss, but what about the ones of us with severe and profound hearing loss, as well as the ones of us that do not have to most common type of hearing loss. Even when my hearing loss was mild to moderate headphones and equalizers just didn’t cut it for me needs.

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#6

It’s a different market. There’s a need for devices at every level to address hearing loss, not entertainment. And there’s a premium to the price for that higher need, a more extensive customizable device for severe to profound hearing loss. There is plenty of room in the market for all levels. I’d even argue that if the medical HA industry can generate revenue on cheaper products and benefit from improvement in scale of manufacturing that it should put downward pressure on those devices. Once you show that a company really can turn out a product at a lower price point thanks to the economies of scale and new revenue streams for products that they currently do not supply. From that perspective it can be healthy and improve competition.

There will always be a need for a very sophisticated design to treat a severe hearing loss. They will still make those. It would be foolish not to, and even if they will reach a lower price, they still allow the patient to benefit, while the company can still show a profit across product lines for the year.

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#7

I agree @eskie227, the winds change seem to be almost upon us, Sonova seems to have been quietly diversifying in the background, they appear to be manoeuvring to stay way ahead of the game… Heavily discounting their aids to Costco with their KS9 and KS10’s, both of those were released fairly quickly after they were launched on the market. They moved into the retail end, I believe Sonova own “Boots Hearing Care” here in the UK? Buying up Sennheiser was a bit of an eye-opener, but I guess it makes sense if the want to spread their wings ever so slightly… Perhaps they feel OTC aids might well have a big impact on their sales, Sonova maybe are adopting a new sales model, by churning out a new “must-have” HA’s line every year, selling much cheaper, but perhaps doubling output? It should be interesting to see how things develop, and if that scenario pans out, for other HA’s manufacturers to compete, prices will fall… Which may leave the small independents in a challenging environment? Cheers Kev.

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#8

It’s already a challenging market right now, this just puts the nail in the coffin!

Well they don’t want to miss the boat here, OTC has just arrived (well by the end of the year anyway) Bose HAs are out ahead but a Phonak/Sennheiser HA will begin to show it’s colours for sure, best thing about all this is the lowered prices for the masses ; )

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#9

I think we are seeing a classic disruption of a market: Costco, Bose, Whisper. Within a few years will most HA users be buying a $6000 pair of HAs every three to five years? I doubt it.

Costco has shown that a manufacturer and a retailer can make an apparently acceptable profit at a much-lower price point.

Bose will probably steal a big part of the HA market by selling a product that is 80% as good as the lower-grade models from the Big 6 that is easy to for consumers to program. Also many people who should use hearing aids but have been put off by the $6000 price will take the plunge at $800-900. Bose will continue to improve its product while retaining its low price. Bose could easily deliver software updates via the web.

If Whisper succeeds as a company it will show that AI-produced software improvements can be delivered to HAs remotely without having to upgrade the hardware as frequently.

Imagine a world where those with mild hearing loss get by with spending $800 on OTC HAs, and those with more severe losses buy or lease a set of HAs that last for years and receive frequent software upgrades. In such a world WILL the HA industry still exist?

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#10

How is Bose going to do software updates over the web when the aids don’t have anyway to connect?

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#11

@MDB, they could add connectivity in a future version.

#12

The aids still communicate to a phone app. It would be possible to run whatever patch/upgrade they want to through the app. All those memory settings fir environments appear to be selected off the phone app. So an upgrade to the app should control what the device can do (within the capabilities of the hardware).

I can’t figure out why they would leave streaming of phone and music audio out of the product. Maybe they’re afraid people will buy them just for music and not assistive hearing? Was it an issue that might have affected the FDA clearance? Or was it to offer an upgrade down the road to sell to enable that functionality?

My only thought is that the design, just like fir Rx RIC HAs, isn’t suited for high quality music listening. If people bought this device and found the music performance to not approach consumer ear buds or headphones, it would hurt their reputation for that market. This way, it’s clear you’re not looking for an entertainment product, but something clearly meant to fall outside that category.

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#13

I watched a video from Dr. Cliff Olson, about Earlens hearing aids. I liked the concept of hearing aid operation :slight_smile:

For now, Earlens hearing aids allow operation up to 70db.
And they are expensive compared to classic hearing aids.

A question for the experienced
Can we expect other hearing aid manufacturers to move in that direction? Because they say that Earlens brings much better sound compared to classic aids, frequencies from 125 Hz to 10 kHz can be adjusted. This hearing aid could help a lot to people who have a harder time understanding speech in society.

The only thing I don’t know is. does a lens that is placed in the ear have a strength limit? Is it possible to make a lens that is able to enable hearing up to 120db?

#14

Another would-be disruptor: OoshEars - Home | Facebook.

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#15

My guess is that the lack of streaming has something to do with battery life.

#16

Like every industry, it evolves or dies. I have seen a lot of change in the hearing aids over the years, they just keep getting better.
Ow be honest about automobiles in my life time the cost of a automobile has gone from barely affordable to so expensive you have to take out a home lone. When you look at the real improvements the cost f hearing aids have stayed close to the same. Seventeen years ago paid $6000 for aids that today worked worse than today’s earbuds.
Hearing loss and the cost of aids can be very depressing if you allow it to be.
My feelings is and has always been you get what you pay for. And it all comes down to what you believe you are worth, in other words what do you deserve? Do yo deserve to hear the very best you possibly can, or do you not care about yourself or your health.

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#17

I’ll disagree with you on just a few points. When discussing whether you are willing to pay $X thousands on HAs to care for your health, it’s important to keep the following in mind. Much of what we see in the 30 some odd million of people who could benefit is that the majority fall into an older age population.

The elder population is more likely living on fixed income with some savings they accomplished despite being of modest means. Even with Medicare parts A,B, and D, the out of pocket expenses can be pretty high. Even with a Medicare Advantage plan, when you add up the premiums, deductibles, and copays you may be looking at a maximum out of pocket expense of $7-8K before they’ll cover 100% after that (traditional Medicare with its odd 20% copay on part B, $500 per day of hospitalization for the first 5 days, and then the weird donut hole of part D prescription coverage doesn’t have a low backstop limit either).

If a person has several common medical problems, hypertension, heart disease, high cholesterol, and diabetes, they may well have to make a choice of “do I pay for all the medicines and office visits I need, or do I cut that back so I can buy premium HAs?” In truth, if they care about themselves and their health, they need those medications to avoid premature death or morbidity from their illnesses. Is passing on a HA really not caring about your health and well-being?

From a quality of life standpoint HAs make a huge difference on so many levels that access should be possible within the limitations of your finances. In the best of all worlds hearing loss should be treated like any other physical illness (or mental healthcare as well), and basic access assured. Unfortunately it’s not. That portion of the population in need and with tight budgets can and likely will improve their quality of life with an OTC HA at a price point they can manage. It’s better than going completely without.

I think there should be better coverage for HA under commercial health insurance as well as Medicare. You can still have a significant copay, but perhaps cut the cost in half for basic or advanced aids and be doing a good service for people. But until that happens, you will have tens of millions of hearing impaired people with few reasonable options that can help them be properly treated and better able to re-engage in life with family and friends.

We’re all “worth it” but sadly not all are equipped to tackle that cost. That’s why I’m pulling for the OTC market to be successful and offer basic but vital performance for those who can’t make the jump to full on prescription HAs but might reach these. It’s also why I’m a bit sad to see Bose come in at $850. I’d like to see an entry point of $500 for a decent performing self fitted aid. Then the price can go up for something a little more sophisticated, until you reach the point where prescription HA availability will drop to allow entry level but full audiological care with a hearing professional and a custom fitting for a HA at the level required for the individual.

Edit: I really do write too much and my apologies. Even I get tired reading my damn posts.

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#18

I agree with you that aids are too expensive for way to many. But I hear reasons for that expense that doesn’t take in the fact the thousands and thousands of hours of research, design and the labor to create the software that is the heart of modern hearing aids or any other moderate devices. As we all know labor cost are the majority of the cost of anything and everything we need and buy. The material cost beyond the design and development is a minor cost. But it also hear over and over that hearing aids need to be better and do this or that, well that takes labor for research and design and development. That folks is all human labor.

#19

Hear am I again talking about stuff I know nothing about. My guess? You could take the core of the design and development team at Oticon out to lunch and only have to book out a medium-large restaurant. How many people does it take to develop signal processing algorithms? You could give them a thousand assistants and it wouldn’t go any faster.

Anyway, I’ve seen this argued back and forth since the internet was young and it never goes anywhere. I just don’t believe that hearing aid pricing has anything to do with recovering costs.

Back on topic (kind of) it’s like watching a David Attenborough documentary where two coral colonies try to invade each other’s space. Is the hearing aid industry muscling in on consumer electronics or the other way around? Either way I think it’s a good thing.

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#20

I feel the two coming together would be good for both great hearing and standard earbuds that would destroy so many young people’s hearing.

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