HearUSA Banks On Exclusive AARP Contract To Put Hearing Aids In Millions Of U.S. Baby Boomers’ Ears

HearUSA may have found its key to success in retail sales of hearing aids with its exclusive contract with AARP, the 40-million member organization for Baby-Boomer Americans aged 50 and above. In its second-quarter financial report this week, HearUSA said the nationwide roll-out to AARP members that began early this year helped account for a nine percent increase in sales over the first quarter of 2010.

In the 23 years HearUSA has been selling hearing aids through company-owned retail outlets throughout the U.S., the company has struggled along with the rest of the hearing industry to effectively reach the 30-plus million Americans with hearing loss, including an estimated 10 million or more who have never tried hearing aids. Since signing a deal with AARP to provide its members with hearing-aid discounts and other services in 2009, HearUSA has aggressively marketed Siemens hearing aids to the 50-and-over set of hearing-impaired consumers through a hearing care network of nearly 2,000 independently practicing audiologists and hearing care professionals and its more than 180 company owned hearing centers throughout the U.S.

“We have seen appointments grow at an accelerating pace since we launched our AARP national advertising campaign, and AARP included the HearUSA program in its publications and web sites in the latter half of the second quarter,” said HearUSA CEO Stephen Hansbrough in a news release reporting second-quarter sales of $21.4 million. Although the revenue total is an increase over the first quarter of 2010, on a year-to-year basis it is still less than the second quarter of 2009, a decline HearUSA attributed to managed care insurance programs cutting back hearing-health benefits to their members in the past year.

HearUSA’s AARP distribution program is not an insurance plan but does provide AARP members with benefits including:

• 20% savings on a range of digital hearing aids
• 90-day money-back guarantee
• 3-year manufacturer warranty
• Free 3-year supply of hearing-aid batteries (a $100 value)
• Free directional microphones (a $150 value per hearing aid) for models that use them
• 1-year extended follow-up care program at no charge to AARP members
• Exclusive 15% discount on hearing healthcare products including hearing aid accessories, batteries and assistive listening products from HearUSA’s online store

Since scoring the exclusive AARP distribution contract in 2009, HearUSA has invested heavily in a nationwide roll-out of the program. HearUSA reported a net loss of $1.9 million in the second quarter, attributing much of it to more than a million dollars spent so far this year advertising the AARP program to drive the increase in sales through its hearing centers. “We expect this momentum to continue and believe that center revenues will grow between 9% and 15% in the second half of 2010 when compared to the first half, and our target is to grow center revenues 15% to 20% in 2011 when compared to 2010,” Hansbrough said.

It’s probably too soon to say that HearUSA and AARP have cracked the code on getting hearing aids into all the ears of the millions of Baby Boomers who need them, as market penetration rates continue to be lower than one would expect given the need. But it’s a good sign they are demonstrating that the right mix of incentives and awareness can at least start the ball rolling.

Amplicom Enters North American Market With PowerTel 500 Amplified Phone For Consumers Who Need Hearing Assistance

Amplicom, the German supplier of amplified telephones and other assistive listening devices (ALDs) for hard-of-hearing consumers, has entered the North American market with first shipments of its family of PowerTel corded and cordless amplified phones. Amplicom USA, based in New York, said the new phones meet the Telecommunications Industry Association’s TIA-1083 hearing-aid compatibility standard and are among the few amplified phones to offer DECT 6.0 technology, the interference-free frequency that is standard in Europe but only recently being widely adopted in North America.

The initial entry in the product line, the PowerTel 500, is a cordless handset with hands-free speakerphone, caller ID, and a large two-line illuminated display. It provides amplified volume of up to 50 dB and offers five frequency settings. Featuring Amplicom’s yourSOUND technology, the PowerTel unit has settings on the PowerTel unit that can be adjusted and set for multiple hearing profiles, enabling each member of the household can switch to his or her own preferred volume and frequency.

Suggested retail for the PowerTel 500 is $139.95. Amplicom also said it will soon start shipping the PowerTel 501, an expandable handset that works with all cordless base PowerTel phones, for $89.95, as well as a series of combination telephone and answering machines. It enters a competitive but by no means crowded market for amplified phones, including other vendors such as Clarity Products and ClearSounds.

GN ReSound Expects To Increase Its Share Of The Global Hearing Aid Market After A Slow Two Years, But Industry Growth Remains Anemic

More evidence of a turnaround in worldwide sales of hearing aids came with GN ReSound’s announcement of improved financial results today, but overall growth in the industry remains anemic. GN ReSound, one of the six largest global hearing aid makers, announced flat organic growth in the second quarter of 2010 over the same period in 2009, after sales declines in the previous five quarters. And the Denmark company made an optimistic forecast for the remainder of the year, predicting that it will increase its share of the global hearing aid market in the second half of 2010.

“We expect to grow above the market in the second half of 2010,” said Lars Viksmoen, CEO of GN ReSound, pointing to the successful introductions of new high-end hearing aid families in late 2009 and the first half of 2010. “This expectation is building on the successful introduction of the Surround Sound by ReSound-featured products–ReSound Live and dot2 by ReSound in late 2009–combined with the global launch of ReSound Alera.”

In ordinary times, predicting an increase in market share when your sales are flat would be a bold claim. But like all global businesses, hearing-aid manufacturers have been hurt by the recession over the past two years and will be happy to eke out single-digit sales increases in 2010. Moreover, GN ReSound’s recent successful launch of its new flagship Alera family of hearing aids, which feature new wireless technology including streaming of TV audio signals into the hearing aids without requiring a device around the neck to relay the signal, gives the company reason to hope for faster growth than the rest of the industry the rest of this year.

GN ReSound is part of the GN Store Nord group, which also includes GN Netcom, maker of the popular Jabra Bluetooth headsets and a leading supplier of contact center and office (CC&O) headsets, a market expected to triple to nearly $2 billion in global sales by 2014. Like Sonova, which leverages its research and development in hearing aids to provide a broad line of other audio products, through GN Netcom the parent company is investing heavily in high-end hearing assistance products, above and beyond hearing aids.

Phonak Dynamic Soundfield Technology Turns The Classroom Into A Giant Hearing Aid

Soundfield classroom amplification systems have improved the education and lives of thousands of schoolchildren who otherwise would miss valuable instruction simply because they cannot hear their teachers well enough to understand what they are teaching. Now Phonak has put its vast experience designing hearing aids to use with a next-generation soundfield system featuring a 12-speaker array that reduces echoing and reverberation and automatically adjusts frequency and volume levels to achieve optimum signal-to-noise ratios in changing listening environments.  The new Phonak Dynamic Soundfield system essentially turns the entire classroom into a giant hearing aid that can dramatically improve comprehension and learning.

Classroom amplification systems have been around a long time, as have FM-based systems transmitting the teacher’s voice into headsets or hearing aids worn by individual hard-of-hearing students. But the experience of users varies tremendously depending on the placement and quality of speakers, the quality of the microphones and amplifiers, and the acoustics of the classroom itself. The drawbacks of earlier systems were so pronounced that the Acoustical Society of America found that “improperly maintained microphones and loudspeakers or poor user skills can cause even poorer speech communication than no amplification system.” In other words, amplifying unintelligible noise only makes voices that much more unintelligible.

But long-term studies have indicated that amplification and other forms of assistance in the classroom can dramatically improve learning The Mainstream Amplification Resource Room Study (MARRS), which found that “significant educational instruction effects can be achieved by sound field amplification” and that “these gains can be cost effectively realized within the regular classroom without the need for stigmatizing labeling and segregation as well as expensive and scheduling complications of special class placement.”

Phonak’s Dynamic Soundfield system addresses the reverberation and echoing that makes comprehension more difficult with amplification by its array of directional speakers that automatically adjust frequency and volume settings to the acoustics of the room to reduce rather than increase reverberation. Years of research into how directional microphones in hearing aids can achieve a higher signal-to-noise ratio to make voices easier to understand in difficult listening environments have been applied to the acoustical problems amplifying a teacher’s voice in a noisy classroom.

The new Phonak Soundfield system is also the first to operate simultaneously in multiple modes, permitting the teacher to broadcast directly through a Phonak inspiro FM transmitter to individual students wearing headsets or hearing aids while broadcasting to the rest of the class over the amplified system. The new system also is “future proof,” providing flexible integration with standard computer and audio systems, and eliminates interference issues through automatic frequency hopping, allowing the Dynamic Soundfield to co-exist alongside a school’s WiFi and Bluetooth networks.

New ‘Buy A Hearing Aid’ Web Site Provides Good Information On Hearing Aid Brands Along With Referrals To An Audiologist Near You

There is a new web site devoted to helping hearing-aid buyers sort through what products on the market will best meet their needs and find a reputable audiologist nearby who can help them. Buy a Hearing Aid provides detailed information about the major hearing aid brands and makes it easy to compare and contrast features and benefits. And if you provide them with your zip code and email address, they will refer you to an audiologist in your neighborhood who can fit you with a new pair of hearing aids.

Buyers need to beware of the growing number of sites on the web that purport to offer information on hearing-aid choices, but which have actually been set up just to generate search traffic and advertising revenue, without offering substantive or even helpful information. That’s why it’s nice to see an addition to the few reputable sites (such as Hearing Planet which I’ve written about before) that are staffed by professionals who know what advice consumers need and who can provide appropriate referrals to the right kind of hearing-health professionals.

The Buy a Hearing Aid site is the brainchild of Mark Brumback of Hearing Aid Express, one of the largest independently owned and operated hearing-aid sellers in the U.S. with primary locations in Houston and Dallas, Texas. (It is also among the first North American hearing-aid companies to sell the new Panasonic line of hearing aids). Hearing Aid Express fits multiple brands of hearing aids, and the company’s breadth and depth of knowledge of the various hearing-aid brands  is now presented on the Buy a Hearing Aid site for three classes of consumers: those who have never owned hearing aids, those who currently own hearing aids, and those who are interested in buying hearing aids.

Petar Dimov, a web developer and search optimization expert, built the site and is developing a comprehensive database of all hearing aid brands and models. Audiologists can pay a small annual fee to have details of their practice presented on the site including any sales offers to attract local customers.

U.S. Hearing Aid Sales Recovery Stalls In Second Quarter Of 2010 Even As Veterans Administration Fits More Hearing Aids Than Ever

Are we in for a double-dip recession in the hearing-aid business? According to the most recent analysis of U.S. hearing aid sales by the Hearing Industries Association (HIA), the number of hearing aids sold in the U.S. only grew by 2.9 percent in the second quarter of 2010. When you exclude an 11.6 percent increase in units bought by the U.S. Veterans Administration (VA), which now purchases 20 percent of the hearing aids sold in the U.S., the American market grew by an anemic one percent in the quarter. Similarly, in the entire first half of 2010, the overall market grew 4.2 percent, with VA sales growing 15 percent but private sales growing only by 1.8 percent over the first half of 2009.

The slowdown from the much faster sales ramp in 2009 is bad news for an industry hoping for a quick recovery from the 2008-2009 recession. It may also indicate that even the raft of new products and capabilities introduced by hearing aid manufacturers in the past two years may not be enough to spark the long-awaited takeoff in hearing aid sales to a generation of Baby Boom consumers steadily losing their hearing at predictable rates.

The surge in government-funded purchases by the VA can be attributed to loosened restrictions on reimbursement for veterans needing hearing aids over the past several years, as well as to the age wave of Korean War and Vietnam War veterans now requiring hearing assistance and the many younger veterans returning from Iraq and Afghanistan with hearing damaged by overexposure to environmental noise in the war zones.

While the government-supported VA market is a welcome shot in the arm to the industry, it’s still an open question why sales to ordinary consumers have yet to take off. With up to a third of the 35 million Americans in need of hearing assistance doing without hearing aids, the question to answer is “when,” not “if.” However, the poor sales improvement in 2010 so far makes it clear the hearing aid industry has yet to crack the code to realizing the expected surge in sales to a market that needs hearing assistance more and more all the time.

GN ReSound Alera Arrives With A Dose Of Hyperbole, But Wireless Features Set The Bar Higher For Premium Hearing Aids

The wireless features in the new GN ReSound Alera family of hearing aids, which start shipping this week, are very similar to those found in several other high-end hearing aids already announced by other manufacturers. But, taken together, they help set the bar higher for premium hearing aids and assistive listening devices in general. The only question is how much better the new wireless features will make the new hearing aids from GN ReSound and other manufacturers when users start trying them out in the field.

One of the first things you learn in Marketing 101 is that  ”first,” “best” and “only” are some of the strongest words in the English language. So it’s no surprise that in the increasingly competitive hearing-aid industry, manufacturers are starting to use those words more often. GN ReSound’s news release announcing first shipments of the Alera hearing aids is a good example, claiming the company has come up with “the first truly wireless hearing aid with no strings attached.” The news release goes on to announce “a new approach to the way a hearing aid receives sound from devices such as TVs, stereos, cell phones and computers,” claiming that, “for the first time the patient can receive sound directly from the device without cables, wires or the need to wear uncomfortable accessories.”

That’s an exciting claim, except for the fact that, at least two other leading manufacturers that I know of have already announced products delivering very similar benefits by streaming wireless audio directly into their hearing aids. The new Widex Clear 440 family of hearing aids provides wireless streaming of cell phone and television signals directly into the hearing aids, without cables or wires, and the Oticon Streamer has been transmitting Bluetooth signals from a distance of up to 20 inches into hearing aids since its introduction along with the Oticon Epoq family of hearing aids in 2007. So it’s worth a close look at how GN ReSound is the “first” or “only.”

• UPDATE (Aug. 9): According to Karen Sams, a marketing representative for GN ReSound (see her comment at the end of this post), the Alera hearing aids’ proprietary 2.4 GHz transmission scheme eliminates the transmission delay that causes echoing and signal degradation in other wireless hearing aid products. It also transmits over longer distances than other hearing aid manufacturers’ wireless products, with the Alera Unite TV streamer broadcasting directly from your television set into your hearing aids — without requiring a second device worn on the body to relay the signal into your hearing aids. Not requiring an intermediary relay streamer is a real advantage that I’ve only seen with the GN ReSound Alera products. Most wireless hearing-aid products still use near-field magnetic induction, transmitting from the streamer through an  induction loop into the telecoils in your hearing aids. I’ve experienced widely varying results with wireless induction, especially the signal distortions and delays that GN ReSound says it is solving with the Alera wireless products featuring near-field induction technology. So GN ReSound is backing up its claim to be first to deliver new technology with new user benefits.

However, while bragging rights about who is first may be important for a while, at the end of the day the market will vote for “best.” And on that score it’s clear GN ReSound is in a neck-and-neck competition with other makers of premium-brand hearing aids to lead in delivering new wireless features that will substantially improve the experience of hearing-aid users. Read more

Panasonic Rolls Out Family Of Behind-The-Ear And Receiver-In-The-Canal Hearing Aids In North American Market

Global consumer electronics giant Panasonic is using its decades of experience selling hearing aids to its home market in Japan to deliver a complete family of hearing solutions to the North American market for the first time, with its sales roll-out starting this month. Following the company’s announcement at the American Academy of Audiology convention in April, North American sales leader Delain Wright has assembled a national team that is signing up a network of audiologists throughout the region to introduce American consumers to Panasonic’s behind-the-ear (BTE) and receiver-in-the-canal (RIC) hearing aids. The initial product lineup consists of the Panasonic 4 Series RIC hearing aids, the Panasonic 2 Series BTE hearing aids, and the innovative JZ Series hearing amplification system worn around the neck with an attachable binaural headset.

The RIC and BTE hearing aid lines each come in standard 9-channel, mid-range 12-channel and and high-end 16-channel models. Based on Panasonic’s own digital signal processing chip and sound processing software, they provide a range of options for audiologists to fit, from entry level to high end. Both lines feature an “intelligent scene selector,” which automatically adjusts the sound processing system’s program settings for up to seven different listening situations. They also feature adaptive, dual-focus directional microphones, adaptive noise suppression, feedback cancellation, and wind-noise suppression.

The JZ Series is a small personal sound amplification unit with a microphone and sound processor that hangs from a cord around the neck, and a lightweight binaural headset. It can be custom-tuned to meet the specific needs of users with moderate hearing loss. It is a step toward the goal outlined at the initial announcement by Yoshi Yuasa, Corporate Senior Vice President of Panasonic North America, “to participate in the convergence of audio products and hearing aids.” Wright says more products will be coming from Panasonic’s design labs that compete head-to-head with other premium hearing-aid brands and deliver innovations based on Panasonic’s consumer electronics experience.

Two Cheers For On Semiconductor’s Acquisition Of Hearing-Aid Chip Maker Sound Design Technologies

On Semiconductor’s recent acquisition of Sound Design Technologies reduces the number of independent manufacturers of digital signal processor (DSP) chips for hearing aids, lessening competition in an industry that is already highly concentrated. Less competition is not a good thing over the long run, because when fewer manufacturers control a market, they can charge higher prices for the products they’ve already built. They can also invest less in new technology innovations because there are fewer competitors out there likely to leapfrog them. However, over the short term, On Semiconductor’s acquisition acquisition of Sound Design may actually be a very good thing for the hearing industry. Here’s why.

Ever since Sound Design spun out of Canadian semiconductor maker Gennum several years ago, it has been the only independent DSP chip manufacturer focused on the hearing aid market. Many hearing-aid manufacturers who do not design and build their own chips use Sound Design’s chips to power their hearing aids. DSPs are specialized semiconductor products whose hearing-aid manufacturer customers expect lower costs and higher performance every year along with more miniaturization and special features. DSPs allow hearing-aid makers to provide better feedback canceling capability, automatic adjustment to different listening environments, automatic adjustment of directional microphones, wireless communication between left and right hearing aids to provide better hearing “in stereo,” Bluetooth integration, and numerous other features that have dramatically improved digital hearing aids in recent years.

Sound Design’s new Wolverine DSP is a high-performance digital engine for hearing aids that is smaller than earlier DSPs, consumes less power, delivers more processing capability and enables easier and more flexible development and deployment of custom sound-processing algorithms and special applications by hearing-aid manufacturers. Clearly the company’s focus on the hearing-aid market has paid off.

But chip design, manufacturing and distribution is a highly capital-intensive business, and Sound Design on its own was nowhere near as large as many of the semiconductor companies it would have to compete against. Without being able to achieve economies of scale from a manufacturing operation selling a lot of products, it’s hard for a chip company to keep costs as low as customers want.

Therefore being acquired should enable Sound Design to leverage On Semiconductor’s mass-production capabilities to keep costs down. It will also be able to tap On Semiconductor’s deep bench of designers with extensive experience developing power and signal management semiconductors, logic chips, discrete components and custom devices — all of which can be applied to next-generation hearing-aid DSPs. That’s a benefit to hearing-aid manufacturers, who need to continue integrating all kinds of new capabilities into ever-smaller form factors. On Semiconductor spun out of Motorola several years ago and is now a leading publicly held semiconductor company with nearly $2 billion (USD) in annual revenue, so it’s got all the resources a small manufacturer of hearing-aid DSPs should need. If it allows Sound Design’s team of executives to continue focusing as relentlessly on the hearing-aid market as they have in the past, the acquisition could be a win-win-win for On Semiconductor, Sound Design, hearing-aid manufacturers who depend on them, and hearing-aid users who will continue to benefit from new technologies and better performance at lower costs.

However, that’s a big “if.” Read more

Will HearingPlanet Still Give Objective Advice About Other Hearing Aid Brands When It Is Owned By Phonak Parent Sonova?

Audiology Online published an intriguing interview yesterday with a senior executive of the The Sonova Group, parent of the Phonak, Lyric and Unitron hearing-aid brands, among others, on why Sonova acquired HearingPlanet, the popular web site that provides detailed information on multiple hearing-aid brands for potential customers. In the AudiologyOnline Q&A, Sonova Group Vice President Alexander Zschokke says the acquisition will enable Sonova to “provide more leads” to the audiologists and other hearing health care professionals who dispense Sonova’s hearing aids. But the one question the interview doesn’t ask is, “Will HearingPlanet still give objective advice about other hearing aid brands when it is owned by Phonak’s parent company?”

HearingPlanet’s success for more than a decade has been based on its ability to offer objective advice to potential purchasers of hearing aids who may be confused about the many choices among different manufacturers’ brands, form factors, product types, and prices. On its web site, HearingPlanet notes that with “numerous brands and styles available,” hearing-aid buyers should “compare prices and technology across brands” and “choose a hearing care provider which offers multiple brands and models so that you can find the right hearing aid for your needs.” It goes on to provide a wealth of information that will help you research the various choices in the market, including a fact-filled comparison chart on 18 different hearing-aid brands that includes major features and pricing.

So there seems to be a potential built-in conflict between Sonova’s stated desire to use HearingPlanet to send more buyers to dispensers of Sonova-owned hearing aid brands, and HearingPlanet’s traditional mission to provide objective advice about multiple brands so customers will find the product that suits them best, regardless of the brand. Of course, this is the real world of commerce, where conflicts of interest abound (see: Goldman Sachs), and it would be self defeating for HearingPlanet to change its winning formula for one that favored one manufacturers’ brands over all others. As of today, the only possible sign of favoritism is the fact that Phonak is the first brand name on the HearingPlanet comparison chart, but that’s not a big deal — anyone who doesn’t look past the first entry on a comparison chart isn’t really looking for comparative information anyway. Otherwise HearingPlanet looks much the same, and we will see if the site changes at all over time.

The acquisition is an interesting example of the consolidation trend in the hearing-aid industry. Phonak’s CEO Valentin Chapero several years ago unsuccessfully attempted to reduce the number of hearing-aid manufacturers with global reach by making a bid to acquire GN ReSound (the acquisition was thwarted by a German antitrust court ruling, which, though later overturned, ended the acquisition bid for good). Since then, financial analysts have said the global hearing aid industry might consolidate through other mergers, through the leading manufacturers increasing their market share, and through the major players acquiring their distribution channels to capture more revenue and gain leverage from vertical integration.

HearingPlanet is a spectacularly successful generator of highly qualified leads to audiologists — in the interview, Sonova’s Zschokke notes that even though most of the people who go to HearingPlanet have never worn a hearing aid before, more than fifty percent of the patients HearingPlanet refers to a hearing health professional in its network go on to purchase hearing aids. So Sonova is smart to want to own HearingPlanet to make sure the leads keep coming to Phonak and its other brands. But let’s hope Sonova doesn’t kill this golden goose by undermining HearingPlanet’s traditional objectivity, depth of information, and excellent advice in any way.

Next Page »