Hearing aids: incumbents have a sound basis to withstand disruption


Awkward and awkward hearing aids have long been stigmatized. With the aging of the population, the demand for diversity is increasing. Meanwhile, politicians want to break the regulatory barriers to competition, and consumer tech companies are spinning around.

Demographic trends support the industry.World Health Organization believes there is some degree of deafness Affects 2.5 billion people worldwide — 1 in 4 — Increase from 1.5 billion by 2050. Loud music is also a factor, but age is the main driving force. The market is growing at an annual rate of 4-6%.

Stocks of major manufacturers, such as Sonova in Switzerland and Demanto in Denmark, which occupy about a quarter of the market, trade with about 30 times higher futures earnings like other European Medtech stocks. Australia’s cochlear implant market leader, Australia’s cochlear implants, trade in multiples of 52.

This is an attractive sector for people who can be confused. Many biotechnology companies are working to treat deafness, including using gene therapy to regenerate the hair cells that line the inner ear. Decibel Therapeutics, Frequency Therapeutics and Sensorion, which recently announced a partnership with Sonova, are one of those already published. However, while this research is promising, it can take years to develop.

A more pressing threat in the United States is that the Biden administration is trying to introduce more competition. The 84% market share of the four major manufacturers helps explain why hearing aid prices average over $ 5,000 per pair. White House..

Consumer electronics companies such as Bose and Apple have already devised devices to help with mild deafness. In July, the White House ordered US regulators to allow hearing aids to be sold in drugstores. The share of companies such as Phonak and Demanto plummeted.

The central question is whether new entrants can steal business from existing companies. Probably not. People with severe hearing loss will continue to consult a medical professional. The main effect of US regulatory reform is on those who would not have gone otherwise. Only one in seven of the 48 million Americans suffering from deafness using aid, it sounds like an expanding market.

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