It makes sense for companies like Apple and Samsung to gain competitive advantage through optimized supply chains that “lock up key product and component supplies.” (4/21/15 post)
Samsung Electronics agrees, judging by recent developments in its patent activity, infrastructure, component acquisitions, and newly announced products. Moreover, Samsung Electronics thinks it makes especially good sense to focus on the hearing aid industry in all those categories.
Patent Activity
Samsung’s foray into hearing aids began with USPTO #8428281 (Small Hearing Aid), which was awarded in April 2014. That was followed by USPTO #8938082, reported in the Jan/Feb 2015 list of patents, issued to Samsung for an “Apparatus Having Hearing Aid.”
In next week’s list of hearing device patents for March/April, readers will find two new hearing device patents granted to Samsung, #8965002 and 9008340 which describe multi-mic arrays, beam-forming, in-situ threshold testing and, presumably, in-situ fitting of devices.
Samsung’s innovations are tied directly to economics of market demand, as demonstrated in the patent wording:
As mobile convergence terminals including high-tech medical equipment, such as high-precision hearing aids, mobile phones, ultra mobile personal computers (UMPCs), camcorders, etc. have become more prevalent today, the demand for products using a microphone array has increased. (Samsung USPTO #8965002)
Patent Assertion
New patent applications in the works make it clear that Samsung’s vision goes far beyond simple ear-level devices, including PSAPs, to assist their smartphones. Consider Samsung’s US patent application 20150043762, published 2/12/2015 for a “Hearing Device and Method of Low Power Operation Thereof.” The application describes
A hearing device, an acoustic apparatus and a sound processing method thereof are provided. The method includes detecting audio signals, determining whether the audio signals include a voice signal of a user, and controlling amplification of the audio signals according to a result of the determination.
It’s also clear that Samsung’s vision is not limited to product manufacturing for the hearing device market. Consider patent application 2015003651, published 1/01/2015, for a “Method and Apparatus Using Head Movement for User Interface.” That application is described by the Patent Law Center as an “innovative system for hearing aid devices” offering “a great deal of functionality beyond treating hearing loss.”
At least in Patent Law Center’s view, Samsung’s application offers opportunities to patent-protect a number of functions that use audio signals and control hearing device operations.
Fig 1. Jay Y. Lee, Samsung Group Vice-Chairman
Structural Changes
Samsung formed a Medical Appliance team in 2011, the same year that it affiliated Samsung Medison, a “global leader in manufacturing medical devices.” The team became a business division in the Department of Consumer Electronics in 2012.
In 2013, Harvard-educated Jay Y. Lee, leader of Samsung’s healthcare business, was appointed Vice Chairman of Samsung. His views are likely to set the patent path for Samsung’s entry into healthcare and specifically into hearing devices. That’s because he’s considered the heir apparent of Samsung, the only son of Samsung Group Chairman Lee Kun-Hee. The latter suffered a heart attack in May 2014.
According to an article in Business Korea this week, Lee envisions hearing aids as Samsung’s first wearable device, serving as a a “stepping stone” to expand the healthcare business into “Mobile Health Care.” In fact, at least one Samsung patent refers to hearing aids as “mobile convergence terminals.”1 This notion describes in words what Bill Gates and Elwha partners showed in recent patent design images.
At present, hearing aid development is also the convergence point for Samsung’s Medical and Consumer Electronics businesses:
It is noteworthy that the medical appliance business division has merged only the hearing aid business team in Samsung Medison and is propelling the development of a hearing aid.
Also noteworthy was the presence of a bevy of Samsung people at the August 2014 IHCON (International Hearing Aid Conference). According to several independent industry sources, the Samsung people were busy photographing poster presentations, collecting intelligence.
Component Acquisitions and New Products
Samsung placed a $13.9M (US) order in April for hearing aid amplifiers (supplier unknown), per the Business Korea article. That is a big order. No other details or source verification are available at the time of writing. Assuming the order was made, it seems likely that other components are in the pipeline as well, since the Samsung device is said to be released early next year.
The debut of Samsung’s hearing aid (name unknown) will be tied to Samsung’s unveiling of its Galaxy S7 smartphone. It seems likely (to Hearing Economics) that the phone and hearing device(s) may be offered as a package to consumers, but no information is available on that yet. None of the patent art work offers a hint of how the actual hearing device may look. One patent alludes to a belt-worn “repeater.”
The Economic View — Duck?
Samsung’s interest in hearing aids is not a passing fancy or an event to be taken lightly. As Hearing News reports today, Samsung may shift our industry from the Big 6 to the Big 7 (or perhaps reduce the number through M&As?), although entry efforts by other large manufacturers like 3M have failed in the past. A previous post comment bears repeating as the Big 6 face something bigger and certainly different:
Our little industry needs to be quick and clever to avoid the role of hardware/app slut to Microsoft, Apple, trolls, and other companies seeking to package technological solutions for growing consumer markets.
Samsung Electronics has a long and harsh history of charging into consumer electronics markets and stealing market share in a roughshod manner — just ask Apple, Sharp, Kodak, Ericsson, InterDigital, and Pioneer, as reported in extensive coverage at Vanity Fair last June. Going back to the 1990s, Samsung’s scorched earth policy has used its deep pockets ($35 billion brand value), enormous patent portfolio (48,939 patents, 16,225 applications), huge workforce (235,00 to 275,000, depending on source), driven product engineering teams, predatory pricing, and a sue/countersue strategy to change the calculus of a targeted industry and its leading manufacturer.
Samsung’s ruthless approach has paid off so far. Forbes ranks the company as the world’s 8th most valuable brand (Apple is #1) and 9th most profitable (Apple is #5). Brand value jumped 19% in the last year with annual profit of $27.2B on revenues of $209.6B. Samsung has done this by bringing out products that are “shockingly similar” to those of industry leaders; selling them at lower prices; blatantly infringing on patents; and waging incredibly lengthy, billion-dollar patent infringement litigation against the targeted companies. The Vanity Fair article succinctly captures Samsung’s approach and attitude:
…ignoring competitors’ patents is not uncommon for the Korean company. And once it’s caught it launches into the same sort of tactics used in the Apple case: countersue, delay, lose, delay, appeal, and then, when defeat is approaching, settle. “They never met a patent they didn’t think they might like to use, no matter who it belongs to,” says Sam Baxter, a patent lawyer who once handled a case for Samsung. “I represented [the Swedish telecommunications company] Ericsson, and they couldn’t lie if their lives depended on it, and I represented Samsung and they couldn’t tell the truth if their lives depended on it.”
If Samsung is even close to the description in that quote, then the vandals are at our gate. Its approach, or more likely avoidance, of the FDA process for certifying Class I devices will be something to watch, especially if the hearing aid debuts with the new smartphone early next year. As a first foray into medical “wearable” technology, Samsung may change the way things are done simply by forging ahead and preparing to wage litigation war for years to come as it captures market share, wears down competitors, and challenges US regulatory policies. It’s done it before.
References
1USPTO #8965002: As mobile convergence terminals including high-tech medical equipment, such as high precision hearing aids, mobile phones, ultra-mobile personal computers (UMPCs), camcorders, etc., have become more prevalent today, the demand for products using a microphone array has increased.”
Do we know what Samsungs intended distribution method will be? Will they try direct to consumer, or work through licensed professionals like audiologists and dispenser?
No, Scot, Hearing Economics doesn’t know, but welcomes information on this topic, which will be the big one for Audiologists, if Samsung goes through with its reported plans. Thanks for the question, I’ll keep it high on the list of “known unknowns”!