Hearing Review top ten of 2007
The Hearing Review’s editor, Karl Strom, has compiled a list of last year’s top ten news items from the hearing aid / health industry. It’s an interesting list and also a very positive one - Karl talks about the advances in hearing aid technology and research as well as the increased exposure of hearing aids and hearing problems in the media last year.
Karl’s list:
1) Sonova-GN deal is blocked, putting into question future consolidation. Announced in October 2006, the $2.6 billion purchase of GN’s hearing care divisions by Sonova (formerly the Phonak Group) represented the biggest acquisition in industry history that would have resulted in the industry’s largest company. Just when it looked like the deal was to be finalized, in March, a German court nixed it on grounds that it would have created a German oligopoly (watch for this new exciting game by Parker Bros coming to a toystore near you). The result: not only was the deal quashed, but it also complicates any further mergers or acquisitions between large companies with significant market shares in Germany. GN will retain its hearing care divisions.
2) Mini-BTE revolution continues. BTEs—thanks to open-fit, over-the-ear, and receiver-in-the-canal aids—now constitute half the US market (about 51%) after making up 26.4% of the market in 2004 and less than one-fifth of the market in the 80s and 90s.
3) Wireless and younger users. BTE hearing aids have not only become instant-fit devices, but are increasingly linked to a constellation of communication devices like cell phones, MP3 players, and even the other hearing aid in a binaural fitting. The big question: Will these devices (combined with mini-BTEs) attract a new, younger user population and/or reduce stigma-related issues?
4) Amazing research. The next time you hear some blowhard going off about how the government spends all our money on useless research, please slap them. Hearing researchers—and NIH-funded researchers specifically—published crucial findings on auditory processing, stem cells, gene therapy, cochlear mechanics, neuroplasticity, SIDS and TEOAEs, and childhood hearing loss. If you’re a hearing science nerd, 2007 was a banner year for reading. How about allocating a few billion dollars from our $2.8 trillion budget to help 21+ million US citizens hear?
5) Great marketing and media exposure. The above, combined with some truly innovative marketing concepts by the hearing industry and non-profits, generated more positive press than any other time except possibly when Presidents Reagan and Clinton obtained hearing aids. How good has it been? Consider this: Leslie Nielsen plays the role of Starkey Laboratories Founder Bill Austin in the MGM movie Music Within!
6) Continued forward consolidation. Dispensing networks and many hearing instrument manufacturers continue to purchase dispensing offices and lock up distribution.
7) Other acquisitions/sales. Intricon (formerly RTI) purchased Tibbetts; Sonic Innovations sold its Tympany division; the principals of Advanced Bionics modified a merger agreement to obtain the auditory business (including the HiResolution Bionic Ear cochlear implant) of Boston Scientific; Cardinal Health purchased VIASYS Healthcare, owner of Grason Stadler and Nicolet Biomedical; Sound Design Technologies bought Gennum’s hearing division; and, in November, 3M announced plans to purchase Aearo for $1.3 billion.
8 ) Implants. Cochlear and middle ear implants, auditory nerve implants, and cochlear implant/hearing aid hybrids continued to make great strides relative to research, clinical testing, and new devices.
9) Passings. Our field lost several great leaders, researchers, and innovators, including John Duffy, Earnest Zelnick, Dick Vessella, Stuart Gatehouse, Merle Lawrence, G. Donald Causey, George Osborne, and in November, Gordon Stowe.
10) Sales flat, but okay. Based on Hearing Industry Association (HIA) statistics in the first three quarters of the year, the average dispensing office experienced unit volume increases of about 2%, while total US sales rose by about 3%. However, one needs to bear in mind that 2006 was a strong year by industry standards, with sales rising by 7.5% compared to 2005.
The original hearing review of 2007 article. Found via Hearing Informed.
Yeah, isn’t it nice to see mostly positives? I think hearing aids are finally starting to step away from their stigma of being for reflective of “senility”. They are so useful and smaller that people can forget about those things.
Item #6- Consolidation (in the U.S.) among the Hearing Health Care Providers- who eat up all the private practices has some serious downsides though. The consumer is often let down.
Things seem to be a LOT different in the UK. Do you have a big wait time for your hearing aids that I read about in the NYtimes?
the nhs service for hearing aid provision in the uk varies across the country ,,some health authorities have no waiting lists..others the wait can be up to 2 years..in the private market amplifon have laid off 72 hearing aid dispensers ,,the market has been hit hard by the arrival of specsavers and their aggressive pricing 2 for 1 etc..other large chains such as hidden and ormerods cannot compete and their advertising mirrors the specsavers offers altho the small print tells another story ,,we call it using a sprat to catch a mackeral!!!!!!…
the consumer can be much more selective and there is no need to spend over 3 and 4 thosand pounds on aids..
i would think the private market in the uk for 2007 will show little or no growth for unit sales with specsavers having a larger market share
its survival of the fittest for 2008 with more redundancies across the larger chains to come.
@David
In the UK, we can get hearing aids free through the NHS. This is great - the downside being, as you read, the wait times. The amount of time people have to wait for fitting varies depending on where you live in the country - it can be anything up to 18 months.
@sweep
Why can’t the other big chains compete with Specsaver’s pricing policy? Surely they are able to buy in bulk as Specsavers surely do?
I’m sure that the smaller hearing aid vendors could also reduce their markup and offer cheaper prices if they needed/wanted to.
steve, i think many companies have built their business model on high mark ups over the years,if they could drive the numbers of people they see to a significantly higher level then the prices could well drop .
however hearing aid sales in the uk have remained very static ..wait until 2007 figs come out!..and since specsavers fit 95% of their customers with two aids this may indicate that the numbers of people going private is in fact falling.
amplifon have laid off 70 dispensers in an attempt to cut costs,however at our hospital we
still have patients coming in who have been quoted over 5 and 6
thousand pounds for a pair of hearing aids from them
have a look at the specsavers website where some research was done re hidden hearing pricing where the price for the same aid varied depending on which shop you bought it from !!!!!!
most dispensers salaries are very heavily commission based ie basic sal ary 15000 pounds and then sales thresholds ie 10% of sales over 5000 per month therefore its in the dispensers interest to sell at highest price poss
specsavers have and will continue to change the market for the customers benefit