I wrote about the "seven sisters" of the global hearing aid industry a while ago, but now it appears there will be six. Consolidation among the largest manufacturers continues as GN Store Nord considers selling GN ReSound, the world's third-largest hearing-aid brand, to one of the other majors. Analysts expect there will be several suitors. William Demant Holdings of Denmark, the world's second-largest hearing-aid maker with the Oticon and Bernafon brands as well as Phonic Ear assistive listening devices and Sennheiser headphones, would be a natural fit. So would Phonak Group, the world's fifth-largest manufacturer. There are a number of reasons for consolidation among the majors, some of them good for hearing-aid customers, othters not so good.
It's interesting GN Store Nord would sell of the unit so soon after it acquired Interton, a niche player in the industry that helped expand the GN's entry- and mid-level market presence in the U.S. and Germany. It's an open question whether Interton will be sold along with GN ReSound but it's a good bet it will.
The good news is that consolidation creates more profits for the leading manufacturers, giving them resources to invest more in new-product innovations. That's good for consumers, as the product lifecycles continue to shrink and as each succeeding new generation of technology brings better listening experiences for consumers with all levels of hearing loss. New software releases for digital signal processing chips (DSP) in hearing aids that improve comprehension of speech in noise and better adaptive directional microphone systems are just two of the technologies where significant investments are paying off. The bad news is that fewer manufacturers means less competition, which can actually slow down innovation. Time will tell whether the loss of GN ReSound as an independent entity will hurt or help consumers.
One disappointment is that GN Store Nord's sale of GN ReSound means it will lose the synergy it currently enjoys with its popular headset brands, such as GN Store Nord's Jabra cellphone headsets. I wrote a while ago about the unusual degree of cooperation between the company's separate divisions when Jabra introduced a headset with special features that made it more attractive to hearing-aid wearers. That will be less likely to happen when GN ReSound hearing aids brand is owned and operated by another parent company. Hearing-aid consumers need more, not less, of this kind of integration.
Posted by David at 11:54 AM on Jul 27, 2006 in HEARING AIDS, INDUSTRY NEWS
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