How Bose and Other Tech Giants Are Disrupting the $10B Hearing Aid Market

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Bose was recently approved by the FDA to develop the first ever user controlled hearing aid. The proposed Bose Hearing Aid is controlled via an app, which allows patients to fit and program the device settings themselves, without a doctor. This move into the hearing aid device sector comes at a pivotal moment of growth: the $7B audio aid market is expected to reach $10B by 2022 due to a rising geriatric population and new technological advancements, such as the Bose Hearing Aid. The NewtonX healthcare vertical delved into this market, and conducted a 1,000-person survey with executives at hearing aid providers including Sonova, Starkey, and Bose, cochlear researchers at prestigious U.S. universities including Harvard and Johns Hopkins, and ENTs who regularly fit and recommend hearing devices to patients.

The survey’s results included quantitative and qualitative data on the hearing aid market, the challenges in development of hearing aid devices, and the mechanics of hearing aid devices and implants.

A Hearing-Friendly Gov and a Rise in Demand: How Bose Stumbled on the Perfect Storm

Over 37M adults have subpar hearing without an aid, and this number is only expected to grow as baby boomers age and life expectancy increases. Currently, this population has to see a doctor to get fitted for a hearing aid and to program it to the user’s current hearing level. Hearing aids don’t correct hearing — rather, they use small microphones to collect sound, and then a computer chip with an amplifier converts the sound into code, analyzes it, and amplifies the sound to the ear based on the level of hearing loss and environmental factors. The Bose hearing aids use this process as well, which is known as air-conduction.

Prior to 2017, patients were required to consult with a doctor before using most hearing aids. However, The FDA Reauthorization Act directed the FDA to create a category for “over-the-counter hearing aids,” meaning that the FDA could approve direct-to-consumer hearing aid products.

Naturally, Bose was not the only tech company to jump at the invitation for direct-to-consumer disruption. Earlier this year, Nuheara also unveiled earbuds to enhance hearing (albeit without FDA approval) that could be controlled and customized via an app.

Samsung has also had its eye on the hearing aid market: in 2013, it filed a patent for a small hearing aid, and in 2015, the company placed a $14M order for hearing aid amplifiers. The company has also applied to trademark the term Earcle in South Korea, and the application referenced hearing aids. More recently, Samsung released uSound for Samsung, an initiative designed to help people detect their risk of hearing loss. The NewtonX survey revealed that the largest geographic growth in the hearing aid market is expected to occur in Asia due to a rising middle class, aging population, and new technologies on the market (the biggest market is currently Europe).  

These companies are hitting on a perfect confluence of events: loosening regulations, higher demand, and technology that can meet these two phenomena. Bluetooth technology enabled wireless control of headphones, while headphones themselves have become smaller and smaller. The difference between headphones and hearing aids has shrunk, enabling companies that previously focused on enhancing sound to provide this service in the form of hearing aids.

Can Consumer-Friendly Products Displace Hearing Aid Giants?

When the news broke that the FDA had approved the Bose Hearing Aid, the stocks for Sonova, William Demand, and GN Store Nord plummeted nearly 10%. However, NewtonX analysts noted that while Bose is moving into the space, it’s only going after a specific sector of those with hearing loss: people with minor-to-moderate loss. Hearing aids for severe hearing loss are much more complex, and in fact there are several on the market that integrate with an app and allow for specialty circumstances such as talking on the phone. For instance, the Phonak Naida V  is also compatible with Phonak’s bluetooth accessories for smartphone streaming. It’s highly unlikely that the FDA would approve a product for severe hearing loss to be direct-to-consumer, meaning that incumbents still have a strong hold on this market.

That said, with the rise in telemedicine and other forms of remote healthcare, direct-to-consumer products that can be bought at the recommendation of a telephone consultation, will see significant growth over the next four years — NewtonX experts estimated an annual growth rate for D2C hearing aid products of 5.7%. Incumbents will need to roll out their own versions of the Bose Hearing Aid to keep a hold on this lucrative segment.

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