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Phonak, Costco, LiNX, MFi Hearing Aids: Rumors and Realities

Two long-rumored events became reality in the last week or so, both of which will likely have long-term effects on the practice of dispensing Audiology.  Both have already elicited large short-term effects in the chatter level and hand wringing departments of our profession.

Phonak Rumors and Realities

 

The Rumor Mill

Hearing Economics got an email tip last December to this effect:

12/2/13:  …heads up [of] some talk that Costco now is offering Phonak — through the Phonak label — at their Canadian stores (likely a US beta test).  If true…suspect we’ll be seeing them in all Costcos very soon. … there will be a lot of hand-wringing by private practices if this turns out true.

Further investigation could not confirm that Phonak was being sold in Canadian Costco stores but did turn up something from a different source that was news to Hearing Economics, if not to others:

1/13 & 14/14:  …Phonak has purchased the hearing aid department in all [Canadian Sears] stores that had hearing aid concessions.  Since that purchase, some of the stores have closed completely because Sears…in Canada…has not been a healthy company. … I could see the [US] Sears operation as being taken over by Phonak.  that fits in with their corporate philosophy (same as for ReSound and Siemens, for certain).

The Reality

Premium Phonak hearing aids will be available at all US Costco dispensing offices starting April 1, per the “breaking news” post at the Hearing Blog on March 9.  Purported pricing is more than competitive– barely above wholesale invoice cost to dispensing practices–but details are scarce.  The next three weeks will bring more information on exactly what models are going on sale, under what names (first model offered will be called Brio), with which features; also, what services will be bundled into the Costco price. Meanwhile, the Phonak and Canada trails remain cold and Audiologists’ reactions to Phonak’s “betrayal” run hot.

Made for iPhone Hearing Aids

 

The Rumor Mill

This one wasn’t exactly a rumor, since GN ReSound announced they would come out with a MFi hearing aid in the first quarter.  The rumor mill seized on that as a means of “taking the stigma out of wearing an aid.”  Oticon has announced it’s debuting its own MFi “solution” at the upcoming American Academy of Audiology conference in Orlando (AudiologyNOW!).  Unless the rumor is wrong, Oticon’s instrument  will still require a streamer when it becomes a reality.

The Reality

GN ReSound unveiled the LiNX on 2/24/14.  The LiNX does not remove stigma, so far as Hearing Economics can tell–the hearing aid looks and acts like hearing aids of the past.  The aid itself, as Hearing Economics understands it, is GN ReSound’s Verso hearing aid with a 312 battery.{{1}}[[1]]I’m sure more technical types will correct me and add valuable information to this brief description.  Please do.[[1]] What’s different is that the Verso’s DSP is running on a new “smartrange” platform that also houses a wireless radio and its own microprocessor.  The latter allows  direct, wireless communication with Iphone/Ipad 5 or 5s devices via a 2.4GHz protocol that is unique to LiNX.  Then, there’s an iOS app that functions as a remote control for volume control, equalizing, environment switching and “geofencing.” That last means the app automatically changes it up depending on where you are and where you’ve been (e.g., home, work, favorite restaurant, etc).  The best part of the app for many will be the self-explanatory “Find My Hearing Aid” function.

The good news about the LiNX is that it offers hands free, binaural phone and music streaming so long as you have the Apple product(s) to support it.  As observed in the social media, it’s a techie solution for techies at the moment, but it’s a first step that will eventually ripple out to a wider audience.  Reportedly,  GN ReSound is not putting a premium price on it — the LiNX will wholesale for about the same amount as existing premium products from ReSound.  That is surprising to Hearing Economics.

The less than great news is that there is no telecoil in the LiNX which makes it good for phones but not a far-field solution.  Aided hearing will not be augmented in auditoriums, churches, city hall, theater, etc.  The 312 battery takes a beating, as we knew it would, getting 5 days with normal use and correspondingly less with streaming.  Those who talk on their phones a lot can expect no more than 3 days from a battery.  Finally, the iOS app gets us back to the perennial problem of users manipulating their hearing aids into less-than-ideal listening configurations.  Just as volume controls were turned down too far in the past, so too can totally connected hearing aids such as the LiNX be turned down to suboptimal listening levels.

The Economic Views

 

Phonak and Costco:  These two companies will do what is in the best interests of shareholders, not stakeholders.  As observed above, it’s their corporate philosophy and that of other companies that follow the economic theory of the firm. Consumer stakeholder groups may rejoice at lower Price, though they may derive less technological benefit if supporting services are in sort supply.   Audiology stakeholders who feel betrayed and angry are directed to a discussion of the Stakeholder Paradox to come to grips with their emotions.   Or maybe move to Canada?

GN ReSound and LiNX.  Not everyone, maybe only a few, will want this product at first; ditto for Oticon and other manufacturer’s entry into this market.  Economically, it’s the usual tension mediating preferences, utility and budget constraints.  Existing hearing aid wearers will have to step up their game to get into the world of wifi, Internet and Apple, but eventually they will.  Younger, more techie users of those applications are less likely to need hearing aids and will look askance at ear level streaming that costs the proverbial $6K.; Costco pricing will make more sense to such folk.   Altogether, the LiNX signals the beginning of a slow but seismic shift in the Demand curve.  It will be fascinating to watch the curve grow.

title image courtesy of gossip girls

About Holly Hosford-Dunn

Holly Hosford-Dunn, PhD, graduated with a BA and MA in Communication Disorders from New Mexico State, completed a PhD in Hearing Sciences at Stanford, and did post-docs at Max Planck Institute (Germany) and Eaton-Peabody Auditory Physiology Lab (Boston). Post-education, she directed the Stanford University Audiology Clinic; developed multi-office private practices in Arizona; authored/edited numerous text books, chapters, journals, and articles; and taught Marketing, Practice Management, Hearing Science, Auditory Electrophysiology, and Amplification in a variety of academic settings.

14 Comments

  1. I am a long time user of hearing aids. Started with analog (Siemens) then went digital (Oticon) and now wear Widex ITE. Once again I am told by my audiologist that I need to up my aids which are at max. She is recommending Widex Dream 440 or a mid range Dream 330. Big price tag. She also recommends BTE as opposed to ITE because of the wireless technology. Any comments on Costco’s hearing aids?

  2. A couple of comments: As an end user and I guess a techie type, I am intrigued by the Resound and Starkey mifi offerings. The idea of wearing a streamer is ‘no go’, but the other two I plan to investigate. I really like being able to modify the volume and treble/bass to suit certain environments. I am also planning on checking out Costco. The no cost trial period of 90 days sure beats the heck out a $30 trial with a $150 fee if you don’t keep the hearing aid. As a long time hearing aid user, I will compare the service I have gotten from my audiologists to what I get at Costco. It has to be fit and fit properly, which takes time.

    1. I may be mistaken here, but doesn’t adjusting your hearing aids via an app set the technology back a few years? I thought most premium hearing aids adjusted to listening environments automatically? At least, that’s what sold my step-dad on biting the bullet and buying his. Or was he sold a bill of goods? Either way, he seems just fine since getting them, and he doesn’t need his phone to use them.

      1. Hello Anne, My apologies for taking so long to respond. No, i don’t think your step-dad was sold a bill of goods, but I also don’t think the new apps are a step backward. You’re right, the newer premium hearing instruments on the market feature fully automatic adjustments that occur on a millisecond basis, far faster than you, your step-dad, or I could adjust. They are programmed in the office. The app-based instruments allow patients to self-program, on a limited basis, wherever they are, and pop the resulting program into place whenever the aid/phone gets into that location. It’s a step forward in one way and a step backward in another. Let’s call it a sideways step that will appeal to some and not to others. Those it will appeal to are likely new to hearing aids (my guess). Naturally, this is a first step, but we’ll be seeing fast technological improvements as this new approach takes hold.

  3. Many industries have tried to circumvent their distributor channel by going direct to the end user via bigbox stores. In the end the consumer realizes the lack of a high level of personal support was not worth the savings. All corporations are looking to grow market share and see Costco as a volume grab. I am a ‘techie” first time HI user and found through my searching and device trials that the Aud’s need to step up their game. Because of the internet and mfg’s websites I may know more about the product features and programming options than they do. If you have 5 product lines it is hard to be an expert programmer on all of them. All mfgs would like their sales outlet to be exclusive to their product.

    1. Costco has great equipment (better than many audio shops) and highly competent personnel who receive no commission to encourage them to flog any particular product.

      1. I have great equipment too and I am much more competent than the people at Costco to fit hearing aids. Some of those people if you read their experience on LinkedIn were working in other areas of the store before dispensing hearing aids. That is really competent. And maybe unlike the other people you have worked with I am an audiologist who fits the best choice for the patient and I
        know almost all the manufacturers of hearing aids. And the ones I don’t I don’t fit unless the patient wants that particular hearing aid and then I have someone come in to teach me their products. So anonymous you are misinformed about audiologists.

    2. I got my Phonak power aids a few days ago at Costco with great service, the price was about half what I was quoted at an audiologist. 90 day trial no restocking fee if I return them (I won’t) free cleaning for their life. free ear tubes when needed and 20 batteries. free follow up visits and the hearing test was free.

  4. Phonak has made it clear- money talks. It’s time for dispensers and audiologists (collectively) to learn to speak that language. If you haven’t done so yet, STOP supporting HearingPlanet, and stop supporting all Sonova subsidiaries.

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