If You Were A Major Hearing Aid Company And Got A Half-Billion Dollar Windfall, What Would You Do With It?

If you were one of the world’s largest hearing-aid companies and suddenly received a half-billion dollar windfall, what would you do with it? That’s exactly the position GN Store Nord finds itself in today.

The parent of GN ReSound hearing aids and GN Netcom headsets will get 550 million Euros (approximately $530 million US) after prevailing in a long-standing civil dispute with Poland’s largest telecommunications company. In the Bloomberg News summary of the settlement, GN Store Nord executives indicated they will use the money primarily to make further investments in its ReSound hearing aid business, including potential acquisitions.

That amount of new money unleashed on a global industry that is less than $20 billion in total sales could have a major impact. But if GN ReSound just acquires another hearing-aid company, it won’t be the game-changer everyone is waiting for in a global industry that’s been stuck with less than five percent annual growth for the past decade. Here are some other areas where serious investment could get the hearing aid industry growing faster:

1. Develop More Affordable Hearing Aids: Most of the recent innovation by the global market leaders in the hearing aid business has been in the high end of the market, providing expensive features such as wireless communication to their highest paying customers. It would be great to see one of the five global leaders come up with a high-quality hearing aid for entry level users that retails for less than $1,000. Component prices are low enough to get there, but such a low price point will also require innovation and investment in the retail channel to speed up and lower the cost of fitting the hearing aids while maintaining high levels of customer service.
2. Streamline the Fitting Process: Making it faster and easier for audiologists and dispensers to fit hearing aids will enable them to serve more customers and offer lower prices, making up a lower profit margin with a higher volume of sales. Sonova’s Sona hearing aid brand is an attempt to lower stocking costs with an upgradeable product platform to accelerate the fitting process for customers with mild hearing loss, but so far it hasn’t had a huge impact on the overall market. Others are working on faster, easier and less invasive hearing tests that would provide better results than today’s lengthy procedure while lowering costs and making it easier to attract more hearing-aid users, especially at the entry level of the market. The industry could use a lot more investment in those kinds of experiments. But until they result in higher sales volumes, these experiments require long-term investment.
3. Integrate Seamlessly With Third-Party Peripherals: The major recent investments by the top hearing aid companies in wireless communication with peripherals to hook up your hearing aids with your Bluetooth phone or your TV audio have not yet delivered affordable solutions. Many of the wireless communications schemes are proprietary, locking the user into one manufacturer’s brand of hearing aids and commanding premium prices. More compatibility with industry standards and more integration with third-party peripherals and assistive listening devices will expand the market by serving more customers at more affordable prices. But it requires an investment in innovations that will lower costs, not just provide new or higher performance.

Those are only three areas where even a fraction of a half-billion-dollar investment could be a game changer for the hearing aid industry. Unfortunately, all those investments require a long-term focus and staying power, because results won’t be obvious overnight. So don’t be surprised if we see the kind of short-term investment activity that gets immediate results and keeps shareholders happy instead. A couple of quick acquisitions of smaller hearing aid companies could reduce overall back office costs, enlarge share of market, and improve profits in short order.

But if acquisitions and other short-term investments don’t result in new products, new thinking, or new ways of reaching and serving new market segments–especially the millions of entry-level consumers with mild untreated hearing loss–then we’ll see more of the same in the hearing aid industry. Big players will continue to get bigger by serving the high end of the market. Only by taking the risk to invest in new products and services that could broaden the market with more affordable solutions will we see a step increase in growth rates in the global hearing aid industry.

Newly Renamed Starkey Hearing Technologies Plans To Keep Putting New Wine In New Bottles

Sometimes when a company changes its name, the first thing you think is “old wine in new bottles.” But when Starkey Laboratories, the 45-year-old hearing aid company, today announced its name change to Starkey Hearing Technologies, it reflected how far the company has come in recent years. It also sent a strong signal on where the company is going–toward a future focused on developing new hearing technologies and integrating them into multiple brands of new hearing products for big consumer markets.

In recent years, Starkey has emerged as one of the top five global hearing aid companies, with nearly a billion dollars of sales from a broad line of products that meet consumers’ entire range of hearing needs. Its five hearing aid brands–Audibel, AudioSync, NuEar, MicroTech and the original Starkey brand–are increasingly driven by a common platform of new technologies in digital signal processing, sound processing, miniaturization, wireless connectivity to your phone, TV and other devices, and wireless binaural communication between hearing aids for a more natural balanced sound.

“Over the past decade, we have gone from a manufacturing company to a global technology company,” Jerry Ruzicka, President of Starkey Hearing Technologies, said in a news release. “The name change better aligns with both who we are as an organization, as well as our focus on innovation, technology and the diverse customers we serve.”

Starkey was founded in Minnesota by William Austin, who has devoted more time in recent years to philanthropy. His Starkey Hearing Foundation to date has given away more than 500,000 hearing aids to people in need in the U.S. and around the world, with a commitment to giving away more than 100,000 hearing aids annually and a goal of one million more this decade. In the meantime, Starkey’s new generation of operating leadership has poured money into R&D and new-product development, and the results are starting to make a big impact on hearing-industry markets.

Once known more for its sales strength than leadership in innovation, in recent years Starkey caught up to and in many instances surpassed other leading hearing-aid manufacturers in developing and promoting hot new technologies. Just this week the company’s new AMP “invisible” hearing aid is being honored at the International Consumer Electronics Show with a 2012 Innovations Design and Engineering Award.

But the newly named Starkey Hearing Technologies won’t be able to rest on its laurels, or its name change, to continue competing successfully in the increasingly competitive global high-end hearing technology industry, where all the leaders are driving the advanced technologies in their hearing aids into consumer products for markets such as high-tend audio, Bluetooth phones, headsets and earphones, and wireless devices.

Industry leader Sonova Group, whose Phonak brand has been both a technology and a marketing leader for years, has continued to drive innovation in sound processing and wireless technologies. GN Store Nord, parent of ReSound hearing aids, also has a Netcom headset division that is driving into industrial hearing protection and consumer markets for earphones and headsets including the popular Jabra bluetooth phone earpieces. And Oticon hearing-aid parent William Demant’s similar push into consumer hearing technologies is led by its high-end Sennheiser headsets and other well-known audio brands.

Cochlear Implant Failure Rates Appear To Be Low In Spite Of Recalls

Results of a study published in the December issue of Archives of Otolaryngology – Head & Neck Surgery, found that rates of cochlear implant failures in a sample of Canadian children implanted between 1990 and 2010 were less than three percent. It’s one of the few studies I’ve seen that attempts to show how reliable cochlear implants are, and according to the authors of the study, the findings indicate a very low failure rate in spite of publicity over the past two years about cochlear implant product recalls.

Advanced Bionics had a major recall starting in 2010 that kept its leading cochlear implant product line off the market well into 2011, and in October 2011 Cochlear Ltd. announced a voluntary recall of its main implant line after reports of a small percentage of failures in past implanted units. When it announced the recall, Cochlear Ltd.’s share price fell 20 percent, but when it announced in late December it discovered the cause of the product failures, the share price bounced back.

Even though the first cochlear implants were developed decades ago, and even with the enormous progress we’ve seen in their ability to restore hearing, we are still early in the game when it comes to performance of the systems and improvements in implantation techniques. It’s good to see both Cochlear Ltd. and Advanced Bionics voluntarily recalled their products when they discovered problems in a small fraction of devices that had been implanted, rather than waiting for regulators to blow the whistle.

If the three major global players can stay on top of the inevitable problems that arise and continue improving the products and performance at the rate they have over the past decade, we can expect to see a lot more deafened children and adults getting their hearing back.

Advanced Bionics Takes The Plunge With Waterproof Neptune Cochlear Implant Sound Processor

Advanced Bionics (AB), the cochlear implant maker owned by Sonova Group, may have been out of the market for a while due to a product recall last year, but it apparently used the time to catch back up with a hot new product that will pose some competitive headaches for the other cochlear implant makers.

AB’s new waterproof Neptune cochlear implant processor, the first  “swimmable” cochlear implant system, was just approved for distribution throughout Europe, following approval in December by U.S. and Canadian regulators of distribution in North America.

At first look, you might wonder why a waterproof cochlear implant system is such a big deal. I don’t wear my hearing aids when I go swimming, and other than a slight fear that I won’t hear the lifeguard’s warning that there are sharks in the water, I get along well enough without them. So why do you need a waterproof cochlear implant system?

One big reason: consider the fact that babies born deaf are now often fitted with cochlear implants right away to help them acquire language at the same rate as hearing children. Then think back to your childhood days splashing around in the pool or in the water at the beach. Not being able to hear a parent yelling at you is a lot more dangerous than my fears about missing shark warnings.

And whereas most adults take a quick dip, most kids will spend as many hours in the water as they are allowed. And for those adults who like to swim a lot for real exercise, I imagine being able to wear the CI while doing laps might be a benefit as well.

The Neptune product is also a new design. Whereas most CI processors are hung behind the ear, the Neptune is a small, seemingly indestructible unit that can be clipped do your lapel or breast pocket, or attached to an armband, with a wire extending to the magnet connector that’s affixed to your skull behind the ear.

For highly active adults and kids, I can see the armband option as a great way to stop worrying about whether the processor will stay put when you’re running, biking or swimming.

Between the cool design and impressive waterproofing technology, I’m glad to see the Number Two cochlear implant maker, now that it’s back on the market following its recall, competing aggressively with new high-tech product designs.

Lantos Technologies Has A Working Demonstration Of World’s First Digital Ear Canal Scanner

Lantos Technologies, developer of a 3D digital ear canal scanner that could be a game changer for the hearing-aid industry and consumer audio business, has been demonstrating its technology at the Starkey Laboratories 2012 Hearing Innovation Expo in Las Vegas. Audiologists at the conference Tweeted about the “wow” effect of a product that’s slick, comfortable and easy to use. To see a demonstration, click on the video:

The Massachusetts company calls its product “the world’s first intra-aural 3D scanning device.” It is a direct, digital, 3D scanner capable of measuring ear canal shape and tissue compliance to produce a highly accurate map of the ear canal. It will eliminate the uncertainties associated with manual fits, greatly improving the performance of custom made ear products across a wide variety of markets ranging from hearing aids, to headsets and earphones for iPods, MP3 players and high-end audio applications, and industrial hearing protection.

On The Starkey Labs Drawing Boards: New Xperia Brand Of “Instant-Fit Custom” Hearing Aids Will Integrate Wireless Feature Set

Sources at the Starkey Laboratories 2012 Hearing Innovations Expo in Las Vegas report that company representatives today provided a glimpse of a new Xperia brand of “Instant-Fit Custom Hearing Aids” that will integrate Starkey’s popular Wi-Series wireless technologies featuring Bluetooth phone connectivity, TV audio and MP3 streaming, and other communication direct into the hearing aids.

The new hearing aids feature an innovative in-the-canal (ITC) design which has a removable earbud that fits in the ear canal, with a housing for the processor unit that sits in the concha of the outer ear.

The unit looks like a custom hearing aid but can be fitted for most ears. And, rather than an old-fashioned half-shell or full-shell design, it bears more of a resemblance to a contemporary Bluetooth earpiece or high-tech earphones.

A big selling point apparently will be the same Starkey wireless capabilities now found in company’s very popular open-fit on-the-ear Wi series, including pairing with the Starkey Surflink remote streamer for communication direct to the hearing aids with multiple peripheral devices and binaural wireless communication between the left and right hearing aids.

There was also talk of a broader line of in-the-ear products to come, including a completely-in-the-canal (CIC) SecretEar hearing aid with the same complete wireless feature set.

Starkey has raced to compete with other major manufacturers in delivering wireless functionality following major announcements over the past two years by Widex, ReSound, Oticon, Phonak and others. Starkey sources say the Wi Series wireless feature set has proven highly popular with audiologists, who have asked for the same functionality in more form factors, especially in-the-ear custom-style products.

Founding Member Of N.W.A. Rap Group To Move Sonomax Into Consumer Hearing Markets As Creative Director

Sonomax, once a somewhat staid manufacturer of ear plugs and hearing protection solutions for industrial users, has recently moved into the heart of the consumer audio business with its sculpted eers self-fitted custom earphones.

Now, the Canadian company is showing it’s all in to the consumer market with the appointment of K. R. Nazel–a.k.a. Arabian Prince, the West Coast music pioneer, DJ, producer and founding member of the groundbreaking rap group N.W.A. and Stones Throw label–as the new Sonomax Creative Director.

Sonomax is another example of a company with great hearing-enhancement technology that is figuring out how to reach a larger audience with products designed for a broader market of consumers. And Nazel isn’t just a figurehead. He has jumped right into both the marketing and product design:

“I listen and work on music everyday, so I wanted the sound and fit that I use on stage, and when I DJ to carry over to eers™. I have used custom in-ear monitors for years, but there has never been a cost effective solution for the general public until now. Custom in-ear monitors can take weeks to make and cost a thousand dollars or more, but with the SonoFit™ system and eers™ custom earbuds, the general public can get a one-of-a-kind custom fit in just 5 minutes right out of the box for less than 25% of the price.”

The SonoFit system enables you to create a custom set of ear buds at home, without going through an extensive process with an audiologist or ear mold maker.

Starkey Laboratories Research Shows ‘Invisibility’ Is One Of Top Five Factors In Consumers’ Hearing Aid Choice

According to new market research, “invisibility” is one of the top five factors customers consider when buying a hearing aid, according to a presentation by a senior Starkey Laboratories executive yesterday at the 2012 Starkey Hearing Innovations Expo in Las Vegas. The research (Chart 1) reveals that consumers are less interested in what brand of hearing aid they are buying than other factors such as: 1) price; 2) sound quality; 3) form factor; 4) visibility/invisibility; and 5) customer service.

More than most other major global hearing aid manufacturers, Starkey Labs has focused development and marketing resources on the invisible hearing aid market over the past two years. Now the presentation by Dennis Van Vliet, Au.D., Starkey’s Senior Director of Professional Relations, explains why: the prized Baby Boomer market segment is far more receptive to “invisible” high-tech solutions than the previous generation of hearing aid users. In addition to the cosmetic appeal of a hearing aid no one knows you are wearing, today’s techno-savvy Boomers, who are attracted to high-tech gadgetry in general, are fascinated by the tiny new hearing systems that can pack more power and performance into a tiny package that sits deep within your ear canal than the huge behind-the-ear models that were the norm only a few years ago.

I’m not at the conference but received a copy of the presentation, which is packed with interesting new information, including a fascinating comparison (Chart 2) between consumers above 65 years old, who are generally averse to technology and less interested in fashion and an active lifestyle, versus Baby-Boom generation consumers aged 41 to 64 who are overwhelmingly interested in new tech solutions that fit in with an active lifestyle. My take on the data is that the Boomers are not put off by the “stigma” of being seen wearing hearing aids so much as attracted to slick new well-designed products that combine superior form with high-tech function.

Starkey’s “invisible” product line now includes the entry-level AMP hearing aids and its high-performance Soundlens products, both of which sit deep within the ear canal. Starkey’s Xino product family is a on open-fit, behind-the-ear, receiver in the canal (RIC) product that is so tiny it is also marketed in the “invisible” category. Starkey has marketed the AMP system aggressively as a first-time solution for users who would not otherwise want to wear hearing aids.

I’ve gotten comments on my previous posts about Starkey’s invisible hearing aid marketing campaigns from readers who say the company is playing into stereotypes about hearing aids as something to be ashamed of and something to hide from others. I’m sure there are plenty of consumers out there worried about the lingering stigma of having to use hearing aids, but I think something else is going on in the market as well. I like to think tech-savvy Baby-Boom consumers are attracted more to the positive aspects of well-designed hearing products that push the limits of miniaturization and performance than to the fact that they are afraid of being seen wearing hearing aids.

Richard Branson Gets Hands-On With Hearing Aids On Starkey Hearing Foundation Mission To South Africa

Media mogul, airline magnate, and high-altitude explorer Sir Richard Branson got hands-on with hearing aids on a recent Starkey Hearing Foundation mission to South Africa that the jet-setting celebrity philanthropist called “one of the most rewarding weekends of my life.”

“Seeing kids who had never been able to hear or speak doing so for the first time. Old men completely deaf dancing with joy at suddenly being able to hear again. Incredible,” Branson said in a post on his Virgin Companies blog entitled “Giving the Gift of Hearing.”

William Austin, founder of Starkey Laboratories and the Starkey Hearing Foundation, led the mission, which set up 500 hard-of-hearing South African citizens with hearing aids.

The Most Important Hidden Benefit Of Next-Generation Hearing Aids Is Noise Reduction, Not Amplification

It’s important to get the right levels of amplification in your hearing aids, especially in speech frequencies. Indeed, improved clarity of speech and high-frequency sounds is the first thing you notice when you are fitted with a good new pair of hearing aids. But an equally important feature–even if it’s one you never notice–is how well they reduce noise through digital (0r dynamic) noise reduction (DNR).

Everyone knows hearing aids amplify sound. But hearing-aid wearers also know that amplifying all sounds, including unwanted background noise, often makes it harder, not easier, to hear what people are saying. In fact, straining to understand amplified voices that compete with amplified background noise is one of the leading causes of hearing-related fatigue, which can be bad for your health.

The good news is that hearing-aid manufacturers have been steadily improving a combination of technologies over the past decade to deliver a big step increase in noise reduction. New sound processing software with sophisticated DNR algorithms are making full use of powerful digital signal processors (DSPs) to virtually eliminate background noise, such as air-conditioner fan noise in the conference room or road noise in the car, making it much easier to understand what people are saying. And much-improved directional microphones further shield you from unwanted noise while focusing on the voices of the people you are facing.

Taken together, these improved technologies make it much easier to understand speech in noise. That’s what I’m finding in my current search for a new set of hearing aids. I’ve recently been trying out two pairs from Liberty Hearing, a provider of hearing aids to Sam’s Clubs, and I’ve been wowed by the improvement in noise reduction over my previous four-year-old set of hearing aids.

When I stepped out into mid-day traffic in Manhattan, I switched on the “Noisy” program setting, and for once I didn’t feel assaulted by the traffic noise. When I took a ride on the Amtrak train, all the rumbling and track noise disappeared, and I could suddenly hear conversations of people three seats away. At home, a ventilation fan in the hood above our stove that usually drives me absolutely crazy seemed silent. And for the first time in years, I didn’t have to turn off my hearing aids when my wife and daughter turned on the blender to make smoothies.

And while the new hearing aids still don’t eliminate all the background chatter in a noisy restaurant, it’s easier to hear my dinner companions than with my previous hearing aids. Perhaps most important, I’ve been very aware of a reduction in the stress of wearing hearing aids. Because the new hearing aids are reducing the noises that I previously had to put up with to hear other people’s amplified voices, I am am experiencing far less hearing fatigue.

All the major hearing-aid manufacturers promote their digital noise reduction algorithms, and I hope to try out many of them. There’s an excellent review of the Starkey IQ sound processing software’s DNR feature on Steve Claridge’s HearingAidKnow site. Starkey IQ doesn’t just eliminate all the noise in gaps between a speaker’s words, but also reduces noise between syllables, which he is a big help in understanding speech. For more information, go to the Healthy Hearing overview of digital noise reduction authored by hearing-aid technology guru Mark Ross. He wrote it several years ago but it is still the best layman’s summary of DNR I’ve seen.

In the meantime, if you’re shopping for a new set of hearing aids, be sure to ask about their noise reduction feature. When you try them out, take a walk out on the street or through a crowded cafeteria. In addition to noticing all the new sounds you hear, you may also be pleasantly surprised at everything you don’t hear.

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