Interview with Jon Anderson, Principal, J Analytic
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Topic: Hearing Instruments 2010 - Baby Boomers, Bottlenecks and Boosting Growth
CAROLYN SMAKA: Today I'm speaking with Jon Anderson, Principal, J Analytic. Welcome, Jon.
JON ANDERSON: Thanks, Carolyn, glad to be here.
SMAKA: Jon, can we start with your experience and a bit about your company?
ANDERSON: Sure. I have over 25 years of expertise in technology and market analysis and marketing, with both entrepreneurial and corporate experience.
My first job out of college involved running a local ad agency focused on consumer advertising. When one of my clients' products was selected by QVC, I became the on-camera spokesman.
In the 1990s, I made a change from consumer marketing to business-to-business marketing when I was recruited by Rockwell International as marketing manager within its telecommunications division. Working for a large organization was a great experience.
Later in my career a competitor hired me away because they'd lost too much business to me.
SMAKA: What a smart strategy! Hire the competition! [laughs]
ANDERSON: [laughs] Exactly!
SMAKA: Jon, what led you to analyzing the hearing aid industry?
ANDERSON: It is a fascinating industry, and when I started looking in to it, I was surprised at how little market analyses was available. In other sectors, like pharmaceuticals for example, there are many traditional analysts who cover that market. This type of information is used by consumers, investors, and the companies themselves to strategize, train sales and marketing staff and other employees, and so forth. There is no consistent analysis of this type within hearing aids. I saw an opportunity. And, being a Boomer myself who will likely need hearing aids someday, I found this a highly interesting project to take on.
SMAKA: Tell me about what you found.
ANDERSON: Well, let's start with a general overview. The hearing aid market has made great strides over the past decade. It began with manufacturer consolidation, channel acquisition and the birth of digital signal processors (DSPs).
Each of these actions strengthened the market. The consolidation between 1998 and 2002 resulted in the top six hearing instrument manufacturers (and their respective brands) accounting for 91% of the global market.
Had Sonova Holdings been allowed to acquire GN ReSound in 2006, there would be five top hearing aid manufacturers instead of six. In some markets, having six or even five top vendors would be considered diversified but some regulators saw that acquisition as coming dangerously close to impacting consumer choice. However, it's interesting to consider that both Gillette razors and Apple iPod music players are estimated to command about 70% of their respective global markets to say nothing of Microsoft's near-monopoly on PC operating systems.
As your audience knows, the shift from analog to digital processing not only improved hearing aid performance by making new features and flexibility available, but it also enabled manufacturers to separate software and hardware development. This separation sped innovation. Now, new iterations of programming software can be released in under a year with new DSP chipsets arriving every 2-3 years.
During the past decade we've also seen manufacturers securing distribution either by purchasing retail chains or signing long-term reseller agreements. This strategy enables manufacturers a more stable pipeline to fuel growth.
Technologically, the decade ended with the birth of wireless connectivity and ever more sophisticated hearing devices. New wireless capabmlities bring smooth connectivity to laptops, televisions, cell phones and music players. As you know, even with vastly more complex features, hearing aid size has dropped precipitously - the smallest behind-the-ear models now rest on the tip of a finger. And because size is often a limiting factor to user adoption, smaller units aid adoption.
This past year we've seen hearing aid manufacturers expand into the implantable device market with Sonova Holdings announcing its purchase of Advanced Bionics and William Demant Holdings' subsidiary Oticon Medical already beginning to roll out bone anchored hearing aid (BAHA) devices in selected markets.
SMAKA: What are the trends in terms of global hearing aid sales?
ANDERSON: The global recession muted hearing aid sales slightly in 2008/09 but sales are already rebounding. As you probably know, North America and Europe dominate the global hearing aid market. The reasons why these two continents dominate the market equate to market longevity, ability to pay and consistent access to healthcare. Both North America and Europe have the hearing aid infrastructure built over many years and the economics to purchase hearing aids.
SMAKA: How do the European and North American markets compare in terms of market distribution?
ANDERSON: North America and Europe now comprise approximately 42% and 45% respectively of global revenues. In Europe, most countries provide no cost or heavily subsidized hearing devices. However, even without device subsidies provided elsewhere via nationalized insurers, North America has personal economic strength. This enables large numbers of hearing loss sufferers to purchase their own devices. It's assumed that hearing aid adoption is much higher among U.S. military veterans compared to the general population due to the VA providing hearing aids as a benefit. Hearing aid sales to the VA have increased dramatically in recent years, and the VA has been one of the driving forces behind the stability of the U.S. hearing aid market despite the recession in the past few years.
At the other end of the spectrum is Africa which is low in hearing aid market penetration due to relatively new market availability, low economic measures and inconsistent access to healthcare.
SMAKA: In the U.S. we know that there are many more people who can actually benefit from hearing aids than those who actually own them. Did you find this to be the case everywhere?
ANDERSON: Yes. Multiple industry sources estimate that approximately 20% of those in the developed world who would benefit from a hearing instrument actually use them. This statistic fluctuates wildly country-to-country depending on economics, healthcare access and cultural aging taboos. According to Better Hearing Institute's MarkeTrak VIII, in the United States the rate of hearing aid adoption has barely budged, increasing by
SMAKA: Jon, you were quoted in the Wall Street Journal (WSJ) recently regarding what can be done to change some of those statistics. Can you talk about that?
ANDERSON: Sure. The way to increase market penetration in the developed world is to either change the economics or break down aging taboos. The most underserved are those with mild-to-medium hearing loss - the youngest Baby Boomers. This demographic skews towards younger, technology-savvy consumers who research purchases online, defy age with Botox and buy 40,000-song iPods for $250. They are also the most age-conscious, viewing a hearing aid in much the same way Dracula views sunlight. As I mentioned in the WSJ article, manufacturers must create new devices and avenues to service this market. The Internet is one method to inform and assist.
SMAKA: How so?
ANDERSON: The Internet can be used to increase pipeline in three ways - education, pricing and sales.
Let's start with education. From adult diapers to motorized wheelchairs, healthcare aids once thought of as taboo and niche are beginning to come out of the marketing closet. According to the U.S. Census Bureau, United States' Boomers alone account for a 78 million strong market and are willing to spend money to extend the perception of youth. Their goal is to delay and compress old age by turning "golden years" into "vitality retention."
Part of the problem is that hearing aid makers mainly market to the audiologist/dispenser rather than the consumer. There is scant detailed information available to educate and assist a consumer in understanding hearing aid technologies. For their cost, there is no product in the average household with less information available on the Internet than hearing aids. Imagine purchasing a television involved having a technician visit your home, take measurements and ask about viewing habits then returning from his van with the perfect television for you.
Today, hearing aid advertising encourages office visits rather than educating consumers on the technologies available. For example, a current hearing aid television advertisement in the U.S. talks about device invisibility and encourages viewers stop in for a free test. Also, most hearing aid marketing materials tend to reinforce the steveotype that hearing loss is for "old people." We are seeing this change somewhat with open fit devices, but take a look at all the gray hair in hearing aid marketing and you'll see what I mean.
Even consumer oriented publications like the U.S.-based Consumer Reports, known for its unbiased product testing and ratings, skated around the technology and focused on generalities in their June 2009 feature on hearing aids.
Technology savvy consumers expect more detailed information. It's a requirement that will only become more acute with time. Professionals who have been in business for a while will tell you the same. Patients come in today with reams of paper printed for the Web. And if some consumers aren't yet online, then their children are, and are likely doing the research for them.
SMAKA: That makes sense. You also said that the Internet can affect pricing and sales. What does the Internet have to do with hearing aid pricing?
ANDERSON: In addition to research, consumers seek out pricing for expensive products to ensure they are getting the best deal possible. Audiologists who dispense hearing aids will have to create their own policies when a consumer calls with a quote from a competitor - either online or down the street. The "Schedule a full consultation" message will not always work with today's price and technology savvy consumer.
And whether or not anyone likes to hear it, online purchasing of unfitted hearing devices is in its infancy. It's now dominated by smaller manufacturers;brands like Nexear and Songbird are available at large online retailers like Amazon and drugstore.com.
Buying hearing aids online opens many arguments on both sides. Proponents see a product that with proper tools could be self-tuned by the user using a home computer. Opponents see loss of revenue and improper fittings that could do more harm than good. Implemented effectively, new customer segments can be served with little effect on traditional channels.
Savvy professionals could also use the Internet for innovative approaches to reach out to new target markets. For example, in regions where patients pay for their hearing aids, companies could offer a "Bridal Registry" type of service. Family and friends of a hearing impaired person would make online contributions to help defray costs.
Internet selling must be part of any expansion in overall market penetration. That said, the audience and type of devices sold should be a different class of instrument. Rather than cannibalizing sales from currently served demographics, online sales should be targeted at the high-functioning, underserved mild-to-medium loss segment - remember, it's approximately 75% of the market with just 10e served, making them no one's customer today.
SMAKA: What else can be done to expand the hearing aid market, and to get hearing aids to people who need them?
ANDERSON: Based on our analysis, we are suggesting some potential avenues that can be taken to expand the global market for hearing aids. They include: targeting the underserved mild to moderate hearing loss segment, which we just talked about;increasing the capacity of dispensers;developing incremental revenue streams between device replacements;simplifying marketing and demystifying product offerings and portfolios, among others.
One direct parallel to the Baby Boomer phenomenon can be seen in the optical market. According to multiple research reports, in the past 30 years, the incidence of near-sightedness increased an unexpected, and largely unexplained, 66% in the developed world (Brooks, 2009: Vitale, Sperduto & Ferris, 2009). That market dramatically changed its distribution model to service the unexpected need.
The biggest change came from the separation of testing/diagnosis from fulfillment. This change allowed the optometrist/ophthalmologist to increase their testing capacity while leaving the less skilled fulfillment to an optician. Similarly, some in the hearing aid industry are calling for the creation of the "audiologist assistant" role.
In terms of developing new incremental revenue streams, we need to look at the computer model. The more hearing aids resemble computers, the more they should act like them. There is no reason why a user should have to wait years to take advantage of newer software. Manufacturers and fitting professionals could generate incremental revenues and provide consumers benefits by offering the ability to update devices in-between replacement cycles.
This can be handled two ways. Either the professional or the user can connect their hearing aids to a computer for updating. "Bug fixes" or minor enhancements would be free while new software versions would be chargeable. For example an update from version 2.0 to 3.0 would be chargeable while 2.0 to 2.01 would not.
Decoupling of features completely would enable users to "taste" features for a set free period before deciding whether to purchase them for their devices. Would more premium devices be sold if the consumer was able to test drive both a premium and entry level device for a couple of weeks each? This kind of "try and buy" approach has worked in other software based markets for years.
SMAKA: Interesting. We have seen this to a very small degree already in the market. New software from a manufacturer will become available that either fixes a problem or provides an enhanced feature, and the consumer simply has to have the hearing aids re-programmed either in the professional's office or by having the professional send the devices to the manufacturer.
Jon, let's talk about simplifying and demystifying the marketing and product offerings.
ANDERSON: Great. Accepting the idea that consumers need to help in their own hearing solution, marketing must be simplified. Manufacturers today generally break their portfolios into price and feature categories (e.g. high, medium, low). But the names of devices in those categories continually shift. A consumer needing a replacement hearing aid will not find an updated "ABC" aid. Instead they will be told that the manufacturer "doesn't sell ABC anymore, that XYZ is the new ABC." The same overabundance of names is seen in some brands where identical features have different names when used in different devices.
Put yourself in a consumer's shoes. Imagine visiting the Apple Computer store, asking for an iPod and being told Apple doesn't make iPods anymore, they make iRocks. Similarly, Microsoft Windows has always been Microsoft Windows regardless of whatever version moniker it used. Naming conventions in the hearing aid market are confusing to audiologists and consumers without purpose.
SMAKA: Did you look at future trends, i.e. where will the/industry be a decade from now?
ANDERSON: We sure did. At the beginning of the next decade we see a multi-decade growth curve in support of the Baby Boomer generation, increasing longevity and growing incidence of younger hearing loss. Burgeoning economic power outside North America and Europe will continue to shift the distribution of sales. We foresee fewer manufacturers in the market as development gaps widen and consumers circle around fewer brands. Devices will of course continue to shrink and ultimately become more than just hearing aids.
In our opinion, DSP design and battery technology will see hearing aids offer duplex sound receipt and transmission eliminating the need for streamers. The hearing aids themselves will receive and send wireless signals to cell phones and other audio sources. Remote diagnostics and incremental feature sales will also come of age with users inputting software keys to unlock and control new or enhanced features.
We believe that while there are always bumps in the road, as the hearing aid industry enters its next decade, it is a solid, stable and ever expanding marketplace that will continue to benefit those involved.
SMAKA: OK. I'm intrigued. I thought I knew about the market and now I'm interested in more details. How do I get my copy of your analysis?
ANDERSON: The report is available in two formats to serve multiple audiences. There is a 63-page Audiologist version priced at $350 that excludes the Global Market Sizing, Global Market Shave and Market Opportunities chapters, which are of more interest to manufacturers. The full report is priced at $3,495. For more information and purchasing, please visit: www.janalytic.com/ResearchHealthcare/ResearchHealthcare2.html
The report will be of interest to your audience as business owners looking to broaden their knowledge of the market and technology along with an outsider's views. Fresh eyes see without preconceptions. We've touched on a few basic areas today, but the report goes in to much more detail and includes market projections and strategy recommendations. It contains practical, unbiased information that will be very useful to those involved in the hearing aid industry from hearing aid manufacturers to educators, audiologists, hearing instrument dispensers, group practices, networks and retail operations.
SMAKA: Thanks so much, Jon. It's been an interesting discussion!
ANDERSON: Thanks for having me, Carolyn.
About J Analytic
J Analytic is an independent research firm with over 25 years of experience in business and consumer technology research and market analysis. Hearing Instruments 2010: Baby Boomers, Bottlenecks and Boosting Growth is our inaugural report in the healthcare market. For a full copy of the report, visit www.janalytic.com/ResearchHealthcare/ResearchHealthcare2.html
JON ANDERSON: Thanks, Carolyn, glad to be here.
SMAKA: Jon, can we start with your experience and a bit about your company?
ANDERSON: Sure. I have over 25 years of expertise in technology and market analysis and marketing, with both entrepreneurial and corporate experience.
My first job out of college involved running a local ad agency focused on consumer advertising. When one of my clients' products was selected by QVC, I became the on-camera spokesman.
In the 1990s, I made a change from consumer marketing to business-to-business marketing when I was recruited by Rockwell International as marketing manager within its telecommunications division. Working for a large organization was a great experience.
Later in my career a competitor hired me away because they'd lost too much business to me.
SMAKA: What a smart strategy! Hire the competition! [laughs]
ANDERSON: [laughs] Exactly!
SMAKA: Jon, what led you to analyzing the hearing aid industry?
ANDERSON: It is a fascinating industry, and when I started looking in to it, I was surprised at how little market analyses was available. In other sectors, like pharmaceuticals for example, there are many traditional analysts who cover that market. This type of information is used by consumers, investors, and the companies themselves to strategize, train sales and marketing staff and other employees, and so forth. There is no consistent analysis of this type within hearing aids. I saw an opportunity. And, being a Boomer myself who will likely need hearing aids someday, I found this a highly interesting project to take on.
SMAKA: Tell me about what you found.
ANDERSON: Well, let's start with a general overview. The hearing aid market has made great strides over the past decade. It began with manufacturer consolidation, channel acquisition and the birth of digital signal processors (DSPs).
Each of these actions strengthened the market. The consolidation between 1998 and 2002 resulted in the top six hearing instrument manufacturers (and their respective brands) accounting for 91% of the global market.
Had Sonova Holdings been allowed to acquire GN ReSound in 2006, there would be five top hearing aid manufacturers instead of six. In some markets, having six or even five top vendors would be considered diversified but some regulators saw that acquisition as coming dangerously close to impacting consumer choice. However, it's interesting to consider that both Gillette razors and Apple iPod music players are estimated to command about 70% of their respective global markets to say nothing of Microsoft's near-monopoly on PC operating systems.
As your audience knows, the shift from analog to digital processing not only improved hearing aid performance by making new features and flexibility available, but it also enabled manufacturers to separate software and hardware development. This separation sped innovation. Now, new iterations of programming software can be released in under a year with new DSP chipsets arriving every 2-3 years.
During the past decade we've also seen manufacturers securing distribution either by purchasing retail chains or signing long-term reseller agreements. This strategy enables manufacturers a more stable pipeline to fuel growth.
Technologically, the decade ended with the birth of wireless connectivity and ever more sophisticated hearing devices. New wireless capabmlities bring smooth connectivity to laptops, televisions, cell phones and music players. As you know, even with vastly more complex features, hearing aid size has dropped precipitously - the smallest behind-the-ear models now rest on the tip of a finger. And because size is often a limiting factor to user adoption, smaller units aid adoption.
This past year we've seen hearing aid manufacturers expand into the implantable device market with Sonova Holdings announcing its purchase of Advanced Bionics and William Demant Holdings' subsidiary Oticon Medical already beginning to roll out bone anchored hearing aid (BAHA) devices in selected markets.
SMAKA: What are the trends in terms of global hearing aid sales?
ANDERSON: The global recession muted hearing aid sales slightly in 2008/09 but sales are already rebounding. As you probably know, North America and Europe dominate the global hearing aid market. The reasons why these two continents dominate the market equate to market longevity, ability to pay and consistent access to healthcare. Both North America and Europe have the hearing aid infrastructure built over many years and the economics to purchase hearing aids.
SMAKA: How do the European and North American markets compare in terms of market distribution?
ANDERSON: North America and Europe now comprise approximately 42% and 45% respectively of global revenues. In Europe, most countries provide no cost or heavily subsidized hearing devices. However, even without device subsidies provided elsewhere via nationalized insurers, North America has personal economic strength. This enables large numbers of hearing loss sufferers to purchase their own devices. It's assumed that hearing aid adoption is much higher among U.S. military veterans compared to the general population due to the VA providing hearing aids as a benefit. Hearing aid sales to the VA have increased dramatically in recent years, and the VA has been one of the driving forces behind the stability of the U.S. hearing aid market despite the recession in the past few years.
At the other end of the spectrum is Africa which is low in hearing aid market penetration due to relatively new market availability, low economic measures and inconsistent access to healthcare.
SMAKA: In the U.S. we know that there are many more people who can actually benefit from hearing aids than those who actually own them. Did you find this to be the case everywhere?
ANDERSON: Yes. Multiple industry sources estimate that approximately 20% of those in the developed world who would benefit from a hearing instrument actually use them. This statistic fluctuates wildly country-to-country depending on economics, healthcare access and cultural aging taboos. According to Better Hearing Institute's MarkeTrak VIII, in the United States the rate of hearing aid adoption has barely budged, increasing by
SMAKA: Jon, you were quoted in the Wall Street Journal (WSJ) recently regarding what can be done to change some of those statistics. Can you talk about that?
ANDERSON: Sure. The way to increase market penetration in the developed world is to either change the economics or break down aging taboos. The most underserved are those with mild-to-medium hearing loss - the youngest Baby Boomers. This demographic skews towards younger, technology-savvy consumers who research purchases online, defy age with Botox and buy 40,000-song iPods for $250. They are also the most age-conscious, viewing a hearing aid in much the same way Dracula views sunlight. As I mentioned in the WSJ article, manufacturers must create new devices and avenues to service this market. The Internet is one method to inform and assist.
SMAKA: How so?
ANDERSON: The Internet can be used to increase pipeline in three ways - education, pricing and sales.
Let's start with education. From adult diapers to motorized wheelchairs, healthcare aids once thought of as taboo and niche are beginning to come out of the marketing closet. According to the U.S. Census Bureau, United States' Boomers alone account for a 78 million strong market and are willing to spend money to extend the perception of youth. Their goal is to delay and compress old age by turning "golden years" into "vitality retention."
Part of the problem is that hearing aid makers mainly market to the audiologist/dispenser rather than the consumer. There is scant detailed information available to educate and assist a consumer in understanding hearing aid technologies. For their cost, there is no product in the average household with less information available on the Internet than hearing aids. Imagine purchasing a television involved having a technician visit your home, take measurements and ask about viewing habits then returning from his van with the perfect television for you.
Today, hearing aid advertising encourages office visits rather than educating consumers on the technologies available. For example, a current hearing aid television advertisement in the U.S. talks about device invisibility and encourages viewers stop in for a free test. Also, most hearing aid marketing materials tend to reinforce the steveotype that hearing loss is for "old people." We are seeing this change somewhat with open fit devices, but take a look at all the gray hair in hearing aid marketing and you'll see what I mean.
Even consumer oriented publications like the U.S.-based Consumer Reports, known for its unbiased product testing and ratings, skated around the technology and focused on generalities in their June 2009 feature on hearing aids.
Technology savvy consumers expect more detailed information. It's a requirement that will only become more acute with time. Professionals who have been in business for a while will tell you the same. Patients come in today with reams of paper printed for the Web. And if some consumers aren't yet online, then their children are, and are likely doing the research for them.
SMAKA: That makes sense. You also said that the Internet can affect pricing and sales. What does the Internet have to do with hearing aid pricing?
ANDERSON: In addition to research, consumers seek out pricing for expensive products to ensure they are getting the best deal possible. Audiologists who dispense hearing aids will have to create their own policies when a consumer calls with a quote from a competitor - either online or down the street. The "Schedule a full consultation" message will not always work with today's price and technology savvy consumer.
And whether or not anyone likes to hear it, online purchasing of unfitted hearing devices is in its infancy. It's now dominated by smaller manufacturers;brands like Nexear and Songbird are available at large online retailers like Amazon and drugstore.com.
Buying hearing aids online opens many arguments on both sides. Proponents see a product that with proper tools could be self-tuned by the user using a home computer. Opponents see loss of revenue and improper fittings that could do more harm than good. Implemented effectively, new customer segments can be served with little effect on traditional channels.
Savvy professionals could also use the Internet for innovative approaches to reach out to new target markets. For example, in regions where patients pay for their hearing aids, companies could offer a "Bridal Registry" type of service. Family and friends of a hearing impaired person would make online contributions to help defray costs.
Internet selling must be part of any expansion in overall market penetration. That said, the audience and type of devices sold should be a different class of instrument. Rather than cannibalizing sales from currently served demographics, online sales should be targeted at the high-functioning, underserved mild-to-medium loss segment - remember, it's approximately 75% of the market with just 10e served, making them no one's customer today.
SMAKA: What else can be done to expand the hearing aid market, and to get hearing aids to people who need them?
ANDERSON: Based on our analysis, we are suggesting some potential avenues that can be taken to expand the global market for hearing aids. They include: targeting the underserved mild to moderate hearing loss segment, which we just talked about;increasing the capacity of dispensers;developing incremental revenue streams between device replacements;simplifying marketing and demystifying product offerings and portfolios, among others.
One direct parallel to the Baby Boomer phenomenon can be seen in the optical market. According to multiple research reports, in the past 30 years, the incidence of near-sightedness increased an unexpected, and largely unexplained, 66% in the developed world (Brooks, 2009: Vitale, Sperduto & Ferris, 2009). That market dramatically changed its distribution model to service the unexpected need.
The biggest change came from the separation of testing/diagnosis from fulfillment. This change allowed the optometrist/ophthalmologist to increase their testing capacity while leaving the less skilled fulfillment to an optician. Similarly, some in the hearing aid industry are calling for the creation of the "audiologist assistant" role.
In terms of developing new incremental revenue streams, we need to look at the computer model. The more hearing aids resemble computers, the more they should act like them. There is no reason why a user should have to wait years to take advantage of newer software. Manufacturers and fitting professionals could generate incremental revenues and provide consumers benefits by offering the ability to update devices in-between replacement cycles.
This can be handled two ways. Either the professional or the user can connect their hearing aids to a computer for updating. "Bug fixes" or minor enhancements would be free while new software versions would be chargeable. For example an update from version 2.0 to 3.0 would be chargeable while 2.0 to 2.01 would not.
Decoupling of features completely would enable users to "taste" features for a set free period before deciding whether to purchase them for their devices. Would more premium devices be sold if the consumer was able to test drive both a premium and entry level device for a couple of weeks each? This kind of "try and buy" approach has worked in other software based markets for years.
SMAKA: Interesting. We have seen this to a very small degree already in the market. New software from a manufacturer will become available that either fixes a problem or provides an enhanced feature, and the consumer simply has to have the hearing aids re-programmed either in the professional's office or by having the professional send the devices to the manufacturer.
Jon, let's talk about simplifying and demystifying the marketing and product offerings.
ANDERSON: Great. Accepting the idea that consumers need to help in their own hearing solution, marketing must be simplified. Manufacturers today generally break their portfolios into price and feature categories (e.g. high, medium, low). But the names of devices in those categories continually shift. A consumer needing a replacement hearing aid will not find an updated "ABC" aid. Instead they will be told that the manufacturer "doesn't sell ABC anymore, that XYZ is the new ABC." The same overabundance of names is seen in some brands where identical features have different names when used in different devices.
Put yourself in a consumer's shoes. Imagine visiting the Apple Computer store, asking for an iPod and being told Apple doesn't make iPods anymore, they make iRocks. Similarly, Microsoft Windows has always been Microsoft Windows regardless of whatever version moniker it used. Naming conventions in the hearing aid market are confusing to audiologists and consumers without purpose.
SMAKA: Did you look at future trends, i.e. where will the/industry be a decade from now?
ANDERSON: We sure did. At the beginning of the next decade we see a multi-decade growth curve in support of the Baby Boomer generation, increasing longevity and growing incidence of younger hearing loss. Burgeoning economic power outside North America and Europe will continue to shift the distribution of sales. We foresee fewer manufacturers in the market as development gaps widen and consumers circle around fewer brands. Devices will of course continue to shrink and ultimately become more than just hearing aids.
In our opinion, DSP design and battery technology will see hearing aids offer duplex sound receipt and transmission eliminating the need for streamers. The hearing aids themselves will receive and send wireless signals to cell phones and other audio sources. Remote diagnostics and incremental feature sales will also come of age with users inputting software keys to unlock and control new or enhanced features.
We believe that while there are always bumps in the road, as the hearing aid industry enters its next decade, it is a solid, stable and ever expanding marketplace that will continue to benefit those involved.
SMAKA: OK. I'm intrigued. I thought I knew about the market and now I'm interested in more details. How do I get my copy of your analysis?
ANDERSON: The report is available in two formats to serve multiple audiences. There is a 63-page Audiologist version priced at $350 that excludes the Global Market Sizing, Global Market Shave and Market Opportunities chapters, which are of more interest to manufacturers. The full report is priced at $3,495. For more information and purchasing, please visit: www.janalytic.com/ResearchHealthcare/ResearchHealthcare2.html
The report will be of interest to your audience as business owners looking to broaden their knowledge of the market and technology along with an outsider's views. Fresh eyes see without preconceptions. We've touched on a few basic areas today, but the report goes in to much more detail and includes market projections and strategy recommendations. It contains practical, unbiased information that will be very useful to those involved in the hearing aid industry from hearing aid manufacturers to educators, audiologists, hearing instrument dispensers, group practices, networks and retail operations.
SMAKA: Thanks so much, Jon. It's been an interesting discussion!
ANDERSON: Thanks for having me, Carolyn.
About J Analytic
J Analytic is an independent research firm with over 25 years of experience in business and consumer technology research and market analysis. Hearing Instruments 2010: Baby Boomers, Bottlenecks and Boosting Growth is our inaugural report in the healthcare market. For a full copy of the report, visit www.janalytic.com/ResearchHealthcare/ResearchHealthcare2.html
