Why did William Demant Holdings (aka Oticon) create the HearLink (Philips) series of hearing aids?
On the surface the answer is obvious: to take advantage of Costco’s enormous market presence to increase sales volume. The under story must also be that Bernafon sales were deemed to be underperforming in that market and so a new brand with new buzz was needed to maximize market potential.
But why not simply take an existing hearing aid like the Oticon More at the time and rebadge it with the Philips name? That’s what Phonak did with their flagship model, selling it as a “Kirkland” to disguise what it was and thereby protect the private audiologists. And it’s what Signia does with its premium model, selling it under the Rexton brand. The value of this approach is that there are no additional costs, no new R&D. They get the best of both worlds by getting the high profits from private audiologists’ sales and the high volume from Costco sales - albeit with lower profit margin. All with no new investment.
However, Demant/Oticon has chosen a different path. The Philips HearLink series doesn’t seem to be a rebranding of any other hearing aid nor a Knick off of an existing hearing aid. Out of the blue, the new “Philips” hearing aid appeared on the market in 2019 after a preliminary announcement of the Demant/Philips “partnership” (licensing agreement) in 2018. This was not like the days when Demant bought Bernafon, for example, with an existing concept, an existing technology, and an in place R&D team. Instead, first there was nothing and then there was a Philips hearing system fully formed. Something out of nothing.
We know that nothing works that way. We know that Demant invested the cost of R&D to develop, test, and bring to market these new hearing aids. So my question of those who understand this industry better than I do . . , Why? Why the extra cost for a product that would have a low profit margin in the Costco market place? Why not simply rebrand what they already have at no additional cost? Were they simply trying to protect the integrity of the Oticon product line that they sell through private audiologists? Even if that was their reasoning, people have and will continue to speculate that it’s just an Oticon More/Real knock off regardless. One Costco HCP told me recently that the HearLink is just a Bernafon with a new name. So, there you have the rumor mill which runs on its own energy.
On a slow day, I’m just trying to gin up some conversation. So any thoughts?