I have been working in the hearing aid industry for over two decades and it’s quite a specific niche. It’s where Medical Model meets Consumer Electronics. So on the medical side you need proper diagnostics by an Audiologist and then very demanding ongoing support and patient hand-holding. Here one uses the expensive medical grade devices R&D’d by the Big5 global majors who have consolidated the whole market. It’s high margin and clinicians like it. On the the other hand there is very common presbycusis or age related high frequency loss or noise induced loss which almost everyone ends up getting (with marginal frustration) - this is the market the new OTC class of ‘starter products’ is aiming for and they are DTC sold online. They are low margin and quite hit and miss at this stage, but can potentially grow the market (create awareness). Competition will be fierce (soon Apple/Android pods will do the same)and the Big5 are all scrambling to buy up potential OTC device companies eg. Sonova Group Switzerland (Phonak, Unitron) has bough Sennheiser consumer division, Sony is working with Signia/Siemens etc (they want to own the whole escalator to high margin medical grade devices). I have it directly from the co-founder of hear.com the worlds largest online h/a marketer and networked referral source that they blew several million euro on a DTC/onlinetest/delivery model which was a total fail (“not interested!!)Then there’s the unit economics: only a small percentage of humanity has moderate to severe hearing loss (MUST act) so the R&D to sales ratio is terrible compared to eg Samsung that makes a billion TV or fridges. And then you must plug that device into the medical supply chain where each degreed professional ads their margin.
So, because of the monopolistic tendency with high barriers to entry in a niche market with intensive personal service under a medical umbrella, I think it calls for disruption but it’s tough.
My sense it that the cheap OTC market grows rapidly but there’s not a killing to be made, and the Big5 get more concentrated and smarter as real-time AI (liked to a smartphone-hearing aid) solves speech to noise ratios with advances algorithms.The hearing impaired consumer will always pay top dollar for this as ‘to be human is to communicate’. HM