Sonova held their 2014 Capital Markets Day for European stock analysts on October 14th …And they were Not Impressed at all. First, expectations that new Phonak and Unitron “Venture” hearing aids would match ReSound/Cochlear1 and Starkey offerings with UHF digital reception for streamer-free “direct mic” auditory assistance, TV, phone, and music incorporating their excellent “Roger” system were not met; but instead they fell back on their old 10.6mHz protocol with their clunky neck-worn ComPilot streamer. Second, management admitted the backlash from the Costco deal caused mass defections from their highly profitable US independent retailer customer base, with overall unit volume from the large retailers not taking up the slack; and that the double-whammy of the lower per-unit sales price paid by Costco was going to be “tough;” with the full damage in 1H 14/15 reporting on November 17th.
It’s the connectivity, stupid:
Before continuing, we at The Hearing Blog strongly urge that all hearing impaired children be fit with,2 and all adults at least have a good trial of FM or digital equivalent assistive systems on their hearing aids or CI’s, as the greatly improved signal-to-noise ratio increases their “listening ease.” Normal hearing readers need to understand that deafness is mentally exhausting due to the cognitive effort required; and this is seen with hearing impaired children coming home from school and taking a nap, and not going outside to play with their friends. In addition, as we reported two years ago, individuals with hearing loss actually process sound differently in noisy environments, due to erosion of temporal resolution and processing in the presence of noise. This needed assistance can take the form of a separate system such as the excellent Phonak Roger system, or can be built in to the hearing devices such as the Unite system found on ReSound and Cochlear devices. As was documented in Pass the Salt… and a Megaphone by Katy McLaughlin in the Wall Street Journal, restaurants are intentionally being architecturally designed to be noisier in order to sell more booze; but even in relatively quiet settings, the reverberation time Tr (or T60) found in many rooms is often far in excess of acceptable amounts. Basically, using a wireless assistive listening system is low-hanging “listening ease” fruit that can be snatched just for the taking. To drive this point home, watch this independently produced demonstration, recorded in an actual Vermont classroom… And underscore why Sonova’s failure to include the Roger system into their new Venture hearing aids was such a disappointment to analysts:
The Hearing Blog’s analysis:
We believe the Roger assistive system was not installed into Sonova’s Venture hearing aids for three primary reasons:
- Battery drain is an issue when receiving digital audio, at about 3 mA additional load — This is about the same jump as in ReSound’s & Cochlear’s Unite system hearing devices when receiving audio with either their proprietary or BLE/MFi protocols. In the last year we’ve received several reports of short (1-2 day) #13 battery life on their power BTE aids from several high school students we support, and this matches our own experience with a pair of Naida Q90 SP aids with integral Roger 11 -03 receivers we tried for a month in March. This battery drain problem with BLE, Unite and Roger is due in part to all three being bidirectional communication protocols, i.e. the receivers actually send signals back to the transmitter to acknowledge receipt and change channels (frequency hop) when interference occurs — It’s the nature of the beast — and also due to power-hungry analog radio chipsets being used, which will resolve when 14nM digital “Moore’s Law” radios start shipping Any Day Now;
- There are two versions of the Roger receivers — The -03 “adult” version, and the more expensive -02 “pediatric” or “educational” version, as it has an extended feature set suitable for schools for the Deaf where every teacher has their own transmitter, and infants & children who can’t report they have a problem, which is a feature we really like. For more on this, please see Selecting a Phonak Roger Receiver;
- Phonak USA makes a ton of money selling the more expensive 3-pin universal X & integral Roger -02 receiver versions that replace the battery door on their #13 & #675 BTE’s, as they have a hammerlock on this market with the educational audiologists every single district employs, in order to satisfy rigid IDEA-2006 regulations.
But, it’s also “Love It” or “Shove It” with Streamers & Remotes:
Hearing aid veterans will remember wireless remote controls actually going back over 25 years when Widex introduced their groundbreaking Quatro hearing aid system that used near-field magnetic induction (NFMI); followed by Philips’ infra-red remote-controlled hearing aids; and ReSound’s cigar-like ultrasonic remote control, which had nasty habits of always rolling off the table, and not being able to mute or even turn down the volume when it was very noisy and needed the most (gesundheit). User acceptance of hearing aid remote controls pretty much followed a “bimodal” statistical distribution — Or more precisely, a 50/50 split between “Love It” or “Shove It” …And this double-humped distribution continues two decades to the present day: Some people just can’t stand carrying around anything which they can easily lose, don’t want a dongle calling attention by hanging around their neck, and/or don’t want to be bothered pushing buttons. Several years ago, Sonova’s engineers recognized this, and in partial response created their “Sound Flow” audio processing, which actually does a decent job of automatically shifting programs to adapt to widely varying listening conditions.
One prominent analyst in London wrote:
In Sonova’s [Capital Markets Day] presentation, in what felt like a somewhat defensive position, Management spent a considerable amount of time downplaying the importance of external connectivity. They showcased results from a survey of 1,800 patients around the globe which highlighted the features that rank as most important with end users. Perhaps not surprisingly, the top three items included:
- Communication and intelligibility;
- Natural sound experience;
- Wearing comfort and esthetics.
Connectivity was, according to their data, one of the least relevant features… [continued below]
Although we haven’t yet seen the survey internals including ages, it boggles our entire mind to see results like this; and left us scratching our heads on just how & where they scraped up these 1800 respondents. An Arizona AuD who recently worked for the VA wrote after looking at a draft of this article:
That survey must have asked 80 year olds. My patients do not care about connectivity and usually stop using it when they get it in a bundle. They don’t like to adjust their hearing aids at all. But when I fit my educated 50 year olds and my young vets they loved connectivity. As the people who actually spent their whole lives with computers ages then it will become a bigger and bigger issue. Also, people who lose it suddenly seem to want to connect to everything.
Could this observation explain why GN ReSound’s VA sales has been climbing, at the expense of Phonak?
This London analyst continues:
However, we think this analysis misses the point to a large extent. While connectivity may not be one of the top 3 most important features of a device (a view that is in-line with our own channel checks), it is one of the few areas where there is clear differentiation between players at the moment. And, as Sonova management did concede, it is likely to grow in importance every year. While no one would buy a GN LiNX hearing aid if the sound quality or esthetics of the device was inferior to other products on offer, connectivity could well be the deciding factor if the products that a patient is choosing from are all seen as largely similar across the more important features (which is what many audiologists think).
We seem to believe Sonova still has until November 17th to at least partially correct their decision on integrating the Roger 2.4gHz receiver into their Venture products by announcing it will be incorporated into their next-generation Advanced Bionics speech processor, due out in 6-9 months, even if the feature is temporarily disabled in the US pending FDA approval (as Cochlear did with the wireless feature in their Nucleus 6 processor). Also, and although we can’t disclose more, the product pipeline for their next generation of Roger transmitters is pretty full, which is why we too were puzzled they didn’t incorporate Roger into at least some Venture hearing aids, even as an extra-cost option.
- Since the ReSound Mini Mic started shipping in September 2012, we have made it mandatory with all of our fittings. Since then, not only has nobody returned the mic, but nobody has returned the hearing aids. This is especially effective for patients who have reverse slope losses or low acceptable noise levels (high dB ANL’s);
- In our article on selecting a Phonak Roger receiver we received a very thoughtful rebuttal by Holly Teagle AuD to our strong urging that all hearing impaired children be fit with FM or digital equivalent assistive systems on their hearing aids or CI’s. Dr Teagle is the Director of the outstanding audiology clinic and CI program at UNC-Chapel Hill, and is someone we highly respect; and although she gives Very Important Reasons why this shouldn’t be the case, we have replied to her privately and will be publishing our reply shortly, after formatting & image prep — Stay Tuned…
- The Sonova of 2014 in many ways reminds The Hearing Blog of the once-mighty RCA (1919-1986) in the 1970’s until the end: They had well-engineered products with lots of marketing sizzle through their NBC division, but absolutely dysfunctional corporate management. [Radio Corporation of America was spun off by Thomas Edison’s General Electric in 1919; and they had one hell of a 67 year run when they were swallowed back up by GE in 1985, with it being broken up the following year with many of the parts eventually sold off or donated, including the crown jewels of their RCA Records, NBC, and Princeton Labs, where the color TV you grew up watching and the LCD screen you are reading this on were invented.]