Hearing aid sales growth slows to a crawl

WASHINGTON, DC—Growth in the U.S. hearing aid market shrank during the third quarter of 2012, according to the latest statistical report from the Hearing Industries Association (HIA). The 705,791 hearing aids sold by manufacturers in the past three months was just 1.0% more than in the same period in 2011. The picture was even worse in the private, i.e., non-governmental, sector, where quarterly net sales of 560,071 units were less than one-third of a percent (0.3%) higher than the 2011 figure.

Most of the growth last quarter resulted from a modest 3.8% gain in the number of hearing aids that companies sold to the Department of Veterans Affairs (VA). As of September 30, VA purchases accounted for 20.2% of the total business.

The latest figures continue a trend of declining growth. The industry began the year on a healthy note, with a first-quarter rise in sales of 5.3% over the same period of 2011. However, the market gained only 2.9% in the second quarter, which was followed by the third quarter’s even smaller 1.0% growth.

For the year to date, manufacturers reported net sales of 2,148,719 hearing aids, up by 3.1% over the first nine months of last year.



A couple of unusual occurrences are reflected in the HIA report. One is that the 724,128 devices sold in the first quarter of 2012 (slightly) exceeded sales in either the second or third quarters (718,800 and 705,791, respectively). For decades, sales in the second and third quarters have almost always been stronger than those in the first and fourth.

Another established pattern also appears likely to be broken this year. Thus far, the percentage of behind-the-ear (BTE) hearing aids sold is slightly lower than it was in 2011. During the whole of last year, BTEs accounted for 70.8% of all sales. Through three quarters of 2012, their share is 70.4%.

While the difference is tiny and could evaporate in the fourth quarter, it appears that the unbroken 20-year period in which BTE instruments first overtook and then pulled far ahead of in-the-ear (ITE) devices in popularity is nearing an end.

Consider what a dramatic shift has occurred. Only 15 years ago, in 1997, a mere 19% of the hearing aids sold in the U.S. were BTEs. Their share has grown every year since. The trend started slowly, as BTE sales over the next seven years increased to 26% in 2004. Then they soared after the introduction of smaller BTE models that were very discreet, allowed open fitting, and, soon, offered the option of having the receiver in the ear.

In 2005, BTEs’ market share grew to 33%, and then continued to surge to 43% in 2006, 51% in 2007, 57% in 2008, and 66% in 2009. Over the next two years, growth slowed, with BTEs peaking (possibly) at 71% of the market in 2011.

Another trend is continuing—the increasing popularity of BTEs with the receiver in the ear as opposed to its traditional placement in the instrument. In 1999, 44% of BTEs came with the receiver in the ear canal. This year so far, 64% have that configuration.