Back to the Future Part IIIa: Technology is a Double-Edged Sword

Lars Kolind Prediction III:  Tremendous pressure on hearing aid manufacturers… the basic technology and know-how will come from very few sources…only five manufacturers will be real innovators,  working on a global scale, increasingly developing closer relationships with the most forward-looking retail organizations to leverage their investments…

The global hearing aid market is on track to reach $22 billion (US) by 2015.  It’s considered relatively immune to global economic fluctuations, despite measurable drops in US sales in 2008. You’d think new competitors would be flocking into such a happy playground and perhaps they are, but there are barriers to their entry.  Chief among those are the major players:  Sonova, William Demant, Siemens, GN ReSound, Starkey, Widex.  That’s 6 companies and Dr. Kolind predicted 5.  Not bad, but he may have been high if you consider the entire market of hearing aids and implants.  William Demant, Sonova, and Siemens  respectively control 14%, 13.5%, and 11% of the global “ENT devices industry” (quaintly called the “ear machine industry,” 85% of which is hearing aids).  That’s just 3 companies, although Widex is also mentioned as a dominant player.  I’ll stick out my neck and say Dr. Kolind got this prediction right.

Dr. Kolind mentioned tremendous pressure on these behemoths, and they ARE behemoths.  Sonova and William Demant racked up 6-month revenues of $904 million and $689 million (USD) in 2011.  In the case of William Demant, that meant unit growth of 17% and a 21% rise in profit (to $142.49 mil USD) compared to the same period in 2010.  Numbers of that magnitude not only keep out the riff-raff, but they also spur the remaining players to compete ferociously to capture more market share and maintain monopolistic pricing by continually raising the technology bar.

That sounds great if you’re one of the chosen few, but it’s not as easy as it looks. Technology is definitely a double-edged and very sharp sword, and that is where the “tremendous pressure” predicted by Dr. Kolind comes into play.  Technology is growing so rapidly that none of these companies can stop creating for even a second without falling behind, failing, and being eaten up — and that is not hyperbole.

The product life cycle for the hearing aids market is getting shorter with convergence of hearing aids and consumer electronics and industry consolidation through mergers and acquisitions.

On its face, this seems strange to consumers and probably to most audiologists.  The products get better and better, so why must they become second tier so quickly and disappear within a few years?  The old and angry cry of planned obsolescence is one we hear not infrequently, and often from even our most satisfied patients.  Yes, it’s planned but no, it’s not especially devious or diabolical.  That shortening product life cycle results from technological “factors of production” inherent to the supply side of the economy.

Two empirically-derived laws of exponential growth in computational technology shape the assumptions underlying business planning and future product predictions — not only in the world of computation but in applied worlds such as the hearing aid industry. The first is Moore’s Law, which states that the number of components fitting on a microchip will double every two years. The second, faster one is Koomey’s Law, stating that energy efficiency doubles every year and a half.  No wonder hearing aids are changing faster and gaining sophistication at a pace that leaves providers and wearers confused and even angry!  The hearing aid manufacturers are not deluging us with more and better product because they can, but because they must.  Rapidly changing technology gives them no choice if they want to stay in the game.  I would call that big pressure and I’d say Dr Kolind once again has called it on the nose.

Below you will find a sample of recent patent approvals by the US Patent Office.  It’s  far from exhaustive and doesn’t even consider the necessity of filing patents in as many national jurisdictions as possible. It’s worth noting that the whole patent process is “overwhelmingly” expensive, which is another barrier to entry by small players.  I submit this list to you as empirical evidence in support of Dr. Kolind’s #3 prediction (though the first item is a hint of things to come and the topic of the next post in this series).

2/14/12. Self Managed Sound Enhancement. Hong Kong. {{1}}[[1]]WIPO PUBLISHES PATENT OF THE CHINESE UNIVERSITY OF HONG KONG, HOSPITAL AUTHORITY FOR “METHOD AND SYSTEM FOR SELF-MANAGED SOUND ENHANCEMENT” (CHINESE INVENTORS). Article from: US Fed News Service, Including US State News | February 14, 2012.[[1]]

2/13/12: Acoustic signal Direction of Arrival Control. Phonak.{{2}}[[2]]US Patent Issued to Phonak on Feb. 7 for “Hearing Aid with Acoustical Signal Direction of Arrival Control” (Swiss, American Inventors). Article from: US Fed News Service, Including US State News | February 13, 2012.[[2]]

2/7/12: Hearing Aid Assembly Method. Widex.{{3}}[[3]]US Patent Issued to Widex on Feb. 7 for “Method of Assembling a Hearing Aid” (Danish Inventor). Article from: US Fed News Service, Including US State News | February 10, 2012.[[3]]

1/31/12: Mixing Mic Signals to Enhance Spatial Perception. Starkey. {{4}}[[4]]US Patent Issued to Starkey Laboratories on Jan. 31 for “Mixing of In-The-Ear Microphone and Outside-The-Ear Microphone Signals to Enhance Spatial Perception” (California Inventors). Article from: US Fed News Service, Including US State News | February 2, 2012. [[4]]

1/31/12:  Hearing Aid. Panasonic.{{5}}[[5]]US Patent Issued to Panasonic on Jan. 31 for “Hearing Aid” (Japanese Inventors). Article from: US Fed News Service, Including US State News | February 3, 2012.[[5]]

1/24/12: Differential Direction Microphone System and Device. Siemens.{{6}}[[6]]US Patent Issued to Siemens Audiologische Technik on Jan. 24 for “Differential Directional Microphone System and Hearing Aid Device with Such a Differential Directional Microphone System” (German Inventors). Article from: US Fed News Service, Including US State News | January 31, 2012.[[6]]

1/24/12: Hearing Aid.  Siemens.{{7}}[[7]]US Patent Issued to Siemens Medical Instruments Pte on Jan. 24 for “Hearing Aid” (Singaporean Inventors). Article from: US Fed News Service, Including US State News | January 28, 2012.[[7]]

1/23/12: Inflatable Ear Piece. Siemens.{{8}}[[8]]WIPO PUBLISHES PATENT OF SIEMENS MEDICAL INSTRUMENTS FOR “INFLATABLE EAR PIECE WITH PRESSURE RELIEF VALVE” (GERMAN INVENTOR). Article from: US Fed News Service, Including US State News | January 23, 2012.[[8]]

1/17/12: Hearing Aid with Audio Signal Generator. Siemens.{{9}}[[9]]US Patent Issued to Siemens Audiologische Technik on Jan. 17 for “Hearing Aid Having an Audio Signal Generator and Method” (German Inventor). Article from: US Fed News Service, Including US State News | January 25, 2012. [[9]]

12/27/11: Filter Bank System. Siemens.{{10}}[[10]]US Patent Issued to Siemens Medical Instruments Pte on Dec. 27 for “Filter Bank System for Hearing Aids” (German Inventors). Article from: US Fed News Service, Including US State News | December 29, 2011.[[10]]

12/27/11: 3rd Ear Impression Models. Siemens.{{11}}[[11]]US Patent Issued to Siemens on Dec. 27 for “Method and Apparatus for the Registration of 3d Ear Impression Models” (New Jersey Inventors). Article from: US Fed News Service, Including US State News | January 4, 2012.[[11]]

12/13/11: Distributed Audio Coding. Swiss.{{12}}[[12]] US Patent Issued to Ecole Polytechnique Federale de Lausanne on Dec. 13 for “Distributed Audio Coding for Wireless Hearing Aids” (Swiss Inventors). Article from: US Fed News Service, Including US State News | December 19, 2011.[[12]]

11/30/11: Automatic Power-Off. Widex.{{13}}[[13]]WIPO PUBLISHES PATENT OF WIDEX FOR “AUTOMATIC POWER-OFF OF HEARING AID” (DANISH INVENTOR). Article from: US Fed News Service, Including US State News | November 30, 2011.[[13]]

11/29/11: Utilizing Gain Limitation. Widex.{{14}}[[14]]US Patent Issued to Widex on Nov. 29 for “Hearing Aid and Method of Utilizing Gain Limitation in a Hearing Aid” (Danish Inventors). Article from: US Fed News Service, Including US State News | December 7, 2011.[[14]]

11/22/11: Identifying Audible Noise as Wind Noise. Panasonic.{{15}}[[15]]US Patent Issued to Panasonic on Nov. 22 for “Method and System for Identifying Audible Noise as Wind Noise in a Hearing Aid Apparatus” (Chinese Inventor). Article from: US Fed News Service, Including US State News | November 29, 2011.[[15]]

11/18/11: In-situ Occlusion Effect Measurement. Widex.{{16}}[[16]]US Patent Issued to Widex on Nov. 15 for “Hearing Aid Method for In-Situ Occlusion Effect and Directly Transmitted Sound Measurement” (Danish Inventor). Article from: US Fed News Service, Including US State News | November 18, 2011.[[16]]

11/15/11: Bone Conducting Hearing Aid. Oticon.{{17}}[[17]]US Patent Issued to Oticon on Nov. 15 for “Bone Conducting Hearing Aid with Connection” (Swedish Inventors). Article from: US Fed News Service, Including US State News | November 21, 2011.[[17]]

11/8/11:  Modular Hearing Aid. Starkey.{{18}}[[18]]US Patent Issued to Starkey Laboratories on Nov. 8 for “Method and Apparatus for Modular Hearing Aid” (Minnesota Inventor). Article from: US Fed News Service, Including US State News | November 11, 2011. [[18]]

11/8/11: Sudden Sound Alert.  Widex.{{19}}[[19]]US Patent Issued to Widex on Nov. 8 for “Hearing Aid with Sudden Sound Alert” (Danish Inventor). Article from: US Fed News Service, Including US State News | November 15, 2011.[[19]]

11/8/11.  An especially small operating device. Siemens.{{20}}[[20]]US Patent Issued to Siemens Audiologische Technik on Nov. 8 for “Operating Device for a Hearing Aid” (German Inventor). Article from: US Fed News Service, Including US State News | November 15, 2011.[[20]]

11/1/11: Hearing Aid System. Panasonic.{{21}}[[21]]US Patent Issued to Panasonic on Nov. 1 for “Hearing Aid System” (Japanese Inventors). Article from: US Fed News Service, Including US State News | November 3, 2011.[[21]]

11/1/11: Earwax removal. An individual in New Jersey.{{22}}[[22]]US Patent Issued on Nov. 1 for “Hearing Aid That Facilitates Removal of Earwax and Trapping of Moisture” (New Jersey Inventor). Article from: US Fed News Service, Including US State News | November 3, 2011.[[22]]

photo courtesy of ornl.gov