ReSound Prostrates Itself Offering The LiNX On The Costco Altar, Ignoring Phonak’s Mis-Step One Year Ago

Costco-Beltone-ReSound

We at The Hearing Blog have confirmed through multiple sources that GN ReSound will make their premier LiNX hearing aid available at Costco starting April 1st, after just having launched the LiNX² series, maintaining their “policy” of keeping their offerings to Costco one generation behind… And delaying the Big Box release until after the big AudiologyNow convention, hoping to avoid the backlash. This is going to trigger an even bigger explosion than Sonova experienced last year when they entered the Big Box market, not only with GNR’s independent dealers, but also with their 3500 Beltone franchise locations which are doing rather well with the “First” branded LiNX devices. What’s more, unlike the major differences between the Verso and LiNX/First, the upcoming LiNX² series presents only minor improvements, essentially eliminating any real advantage over the Big Box offerings.

UPDATE: We confirmed this story almost three weeks ago in early March; but we were approached by ReSound’s PR flack with an offer to interview ReSound CEO Anders Hedegaard, so we decided to travel halfway across the country to meet with him, and also hold off publication of this article until the interview, making it clear to the flack that our schedule was flexible, settling on a 4:00 PM time. However, when it became what we surmise to be known to Hedegaard less than two hours before this scheduled interview what the subject matter would be, he conveniently had “another committment” and was “not on the premises;” instead offering up as sacrificial lambs two poor underlings for questions on this and two major IT project management failures that demand answers at the CEO level. Since we already had confirmation of the Costco/LiNX story, we made it clear we are running with what we have, and that he (Hedegaard) would be forfeiting his opportunity to present his “spin” on these two major stories.

Furthermore, as we will detail in a subsequent article, GN Stor Nord is a publicly traded company; and in this era of management boards holding CEO’s accountable, we would not be surprised to see this board take affirmative action when the extent of the damage that has occurred becomes apparent to all.

Audiologically, the new LiNX² has little difference to the earlier LiNX: They will be selling two versions at the Big Box store, an MFi “LiNX 6” in between the 5 & 7 versions, and a “LiNX 8” in between the 7 & 9 versions.

If GN believes that their product is so superior to their competitors’ hearing aids sold at Costco, then they should at least put their money where their mouth is and match what Phonak did to cannibalize their own Connect Hearing dealerships by putting their Beltone First aids into Costco.

The Hearing Blog’s technical analysis:

  • So-called “pinna restoration” is little more than a gimmick: Widex has had this for over four years now starting with their Clear; but theirs makes little if any audible difference;
  • Maintenance of ILD’s means inter-level differences are being preserved through binaural AGC coordination, which validated studies have shown provides little-to-no-benefit for speech perception in noise;
  • The new beamforming algorithm shuts down when it gets noisy, i.e. it provides no benefit for speech perception in noise;
  • The one long-overdue feature the LiNX² will have is that given the push from lousy #312 “mercury free” cells trying to keep up when streaming audio, Denmark finally got the message after almost 5 years that they need #13 battery power across their wireless product line, including for RIC’s. As we detailed on August  31st of last year when the conventional #13 BTE LiNX was released, we do not recommend a 312 battery for use in UHF streaming. Starkey got the memo a year ago and only offers their Halo in a #13 version, and has good user satisfaction;
  • The probable reason for making the no-charge -TS option now standard is to cut down on needless returns, both for patients who find they do need it… And also due to shipping screw-ups when it’s accidently left off.
  • Along these lines of battery drain, yes they will have custom instruments; but 72% of the US market is BTE & RIC and only 12% is the butt-ugly ful shell ITE that looks like you have a big tumor in your ear… And the ITE is the only custom instrument with enough room on the faceplate for the #13 battery needed to power it while receiving streaming audio.

The Hearing Blog’s market analysis:

Phonak greatly underestimated the explosion in the market to their selling the Quest line of hearing aids in Costco, as there was almost zero product differentiation between the aids sold in Costco and what independent dealers were paying about the same wholesale price for; and we believe GN ReSound is vastly underestimating what will happen to them as they are overestimating the differences in the LiNX² & LiNX. What’s more, as Unitron’s Brian Taylor points out (to his (now-former) employer’s consternation) in Signal & Noise: Are We Entering the “Just Good Enough” Era?1

As this recent peer-reviewed article [Impact of advanced hearing aid technology on speech understanding for older listeners with mild to moderate, adult-onset, sensorineural hearing loss; by Robyn Cox in Gerontology2] attests, higher cost, premium hearing aids do not provide superior outcomes when compared to lower cost, basic level technology. In a carefully designed study involving 25 participants, the researchers compared laboratory speech understanding tests, standardized self-reports, and open-ended diary entries for four pairs of hearing aids: two basic and two premium level.

Results of the month-long field trials showed no statistically or clinically significant differences between the premium and basic level hearing aids on any measures of outcome for either new or experienced hearing aid users. The results of this study suggest that hearing aids, regardless of technology level or price point, provide patients with favorable laboratory and real-world outcomes. It should be noted, however, that all hearing aids evaluated in this study were painstakingly fitted using best-practice protocols, which likely contributed to the across-the-board positive outcomes.

What GN Stor Nord fails to realize is that this move will also adversely affect sales at their profitable Beltone Division, as consumers flee for the Big Box. As we noted in the lede, the killer feature for the LiNX/First was the direct iPhone Bluetooth 4.0 connectivity, and as long as Costco was selling the Verso, both Beltone and independent hearing aid dealers had something unique to market to their patients. However, it is worth noting that the Verso aids sold in Costco are also “Made for iPhone” (MFi) but only with the Phone Clip+ streamer, or in other words, it was not an audiologic but a convenience feature that differentiated the Verso from the LiNX and First. As we noted in our Technical Analysis, there is little audiologically that differentiates the new LiNX² from the Costco LiNX; and furthermore very few premium 9 series aids are sold anyway: Patients will be able to buy a better performing LiNX/First “8” at Costco for less than a LiNX² 7 anywhere.

As a reminder, in early April of last year, Phonak LLC president Jeff Newnham delivered his big F.U. to the industry when he stated:

  • We want to help all hearing-impaired people, including those consumers motivated by price who prefer a value practice model for their hearing care.
  • We believe that Phonak provides the most innovative technology available today and we want to make these products available to as many people as possible so that they may live their lives without limitation.

Industry reaction was swift and angry: Although a weak case could be made that they were offering different — perhaps slightly better — technology for value-conscious consumers, they could have easily flown it under the radar with the Kirkland or reconstituted Sona brand, or possibly even under Unitron (much as BMW sells their 1 series as the Mini Cooper). Instead,  Sonova caved into Costco’s demand to market the aids under their premium brand… Much to their surprised reaction from the marketplace.

GN Stor Nord is not only not providing vastly improved audiologic technology by replacing the Verso with the LiNX/First, i.e. they are not helping “all hearing-impaired people, including those consumers motivated by price who prefer a value practice model for their hearing care,” but merely looking to cannibalize the capacity-limited sales at Costco by offering a non-audiologic streaming feature upgrade from the Phone Clip+ to MFi. What’s more, as Phonak discovered, their profitable VA sales were hurt over their Costco move, as the largest hearing aid buyer employs a number of part and full-time contract audiologists who were offended over it.

References:

  1. Signal & Noise: Are We Entering the “Just Good Enough” Era?
  2. Impact of advanced hearing aid technology on speech understanding for older listeners with mild to moderate, adult-onset, sensorineural hearing loss; Gerontology. 2014;60(6):557-68. doi: 10.1159/000362547. Epub 2014 Aug 14. PubMed.
← More On Starkey's Costco Deception Starkey Caught Red-Handed Selling In Costco: UPDATED →

About the author

Dan Schwartz

Electrical Engineer, via Georgia Tech

37 Comments

  1. rico567
    March 28, 2015 at 2:12 pm

    I have only recently begun serious research on a new pair of hearing aids, having owned the ones I’m wearing for 10 years. I had concluded that here was an industry almost dedicated to inefficiency, but until I read this article, I had not realized how much, nor what a state of flux it is in.


    • Dan Schwartz
      March 28, 2015 at 11:49 pm

      John, I’ll e-mail you privately. Also, I sent you a FB friend request


  2. Chris Campellone
    March 31, 2015 at 8:43 pm

    Dan-
    I am writing once again for you to reconsider the information that you have posted about GN/beltone as it refers to Costco.
    You and I both know the what is being distributed through the Costco chain is a “watered down version of what GN and Beltone offer on the First Series” or Linx. Circa 2013.
    You are a smart man; yet you seem to want to internally combust only to prove, yourself right.
    You know: as a professional in this market that costco offers no customer service. I don’t see people lining up at Costco for their cancer treatment, as of yet. Costco sells bulk for bulk and so does Sams club.
    Your article is well written and I respect your opinion. I just do not agree that Beltone or GN is the bad guy.
    Why aren’t you talking about all of the bad guys that make GN and Beltone look bad because of their poor practices that lead them to companies like Costco or others.??
    Your a smart man. Who cares if the president of GN didn’t meet with you in Arizona. Remember, we are all on the same team. You, me and everyone else whom has morals.
    Mustard seeds grow and I intend on making sure that ours does too .
    This business has a voice.
    All my best Dan.
    drbeltone


    • Dan Schwartz
      March 31, 2015 at 9:22 pm

      Chris, first off I would never censor what you write, as I respect your opinion. However, the facts as you have been led to believe don’t align with reality, as you were being patronized. First off, the LiNX did not come out in 2013: It was released just 13 months ago in February 2014, just in time for CES and to steal the spotlight from Starkey, which released the Halo at AudiologyNow the next month. However, just like the Verso offerings, these are .NOT. “watered-down” versions: While the ReSound brand offers 3 levels of technology in the Verso and LiNX — The 5, 7 & 9 levels — they only sell two versions that are “in between,” i.e. a 6 & 8 level. What’s more, the basic LiNX 5 series lacks the direct-to-iPhone capability, while both the versions in Costco have this valuable non-audiologic feature that differentiates the ReSound LiNX aids I dispense and Beltone First & Promise aids you dispense.

      As for GN’s ReSound division CEO Anders Hedegaard backing out of his long-scheduled interview, hey, we’re a big boy… But Stay Tuned.


      • Dr. K. Pack
        April 1, 2015 at 12:38 am

        ReSound Linx were launched in several markets in 2013. http://www.gn.com/Investor/News/2013/October/LiNX


        • Dan Schwartz
          April 1, 2015 at 10:00 am

          Kelly, as I understood it, the release was to key customers for closed beta/regression testing. However, when we brought in a pair & put them on our trusty analog drain meter and switched on 2.45 gHz digital reception, we had to say No as 5.5 mA quiescent & >10 mA peaks is too much for a #312 battery.


    • Ronald Beck
      September 25, 2015 at 2:20 am

      It is Now september, so you probably will not read this, but i have enough anger to simply say that you are absolutely not telling the truth about Costco service and knowledge. They are far better than ANY “fake professional” that i shopped 5 years ago before buying my first Costco hearing aides by Rexton. They were great with fabulous customer service and knowledge until last month when I switched to the Kirkland 6, which, of course you know, is the resound with Apple bluetooth connectivity. The $1,800 price and the fabulous service that Costco offers blows away all of you “professionals” who have been stealing thousands of extra dollars of profit due to lack of competition.

      Now what you need to do to stay alive is readjust your profit margins, stop lying about Costco, and increase your customer base based upon realistic profit margins. Shame on all of you and your false egos!


      • Hilary
        February 4, 2016 at 12:00 am

        Good for you. Costco is great!


  3. Rico567
    April 3, 2015 at 7:46 pm

    That kind of drain on a #312 battery is a non-starter for me. I’m used to HAs using #13s. Otherwise, the LINX technology, especially the direct-to-blurtooth, is very attractive to me.


    • Dan Schwartz
      April 3, 2015 at 9:52 pm

      The new LiNX² x62 platform is nice, as it’s their first #13 RIC. See this article on why you need a #13 ReSound aid.


      • rico567
        May 18, 2015 at 5:50 pm

        Yeah, that sounds like what I NEED. but likely not what I’ll want to pay for. We’ll see.


  4. Tom Racker
    April 17, 2015 at 4:09 pm

    Thank you for your analysis. It sounds like the #13 battery is a significant reason to avoid the Costco offering. What is the difference in the 5,6,7,8,9 ?


    • Dan Schwartz
      April 17, 2015 at 11:06 pm

      The problem is the 6+ mA drain on the battery when receiving digital audio: This problem goes back to 2010 with the Alera, and is the nature of the beast with UHF digital audio. The problem is that ReSound only built a #312 RIC in the Alera, Verso, and LiNX, and they had continual problems with them dropping out when streaming, especially in noisy environments when peaks pin the drain meter at 10+ mA. The new LiNX² 62 model finally has a #13 cell, and works well; however for nonstop streaming the 675-fueled Enzo works better, especially when distances are large, as it uses a Bluetooth-like 2-way protocol. For more, please see


  5. Bobby Ear Amp
    May 18, 2015 at 12:08 am

    Although audiologists love it for obvious reasons, ear amps, aka hearing aids. were only given medical instrument status because of a huge ridiculous lobby. That status clearly enables them to be vastly overpriced and audiologists to make obscene commissions. Costco participation helps restore pricing reason to a product that doesn’t need and shouldn’t have medical instrument status, and will finally change in time the original dumb landscape. The world changes-audiologists get over it.


    • Dan Schwartz
      May 18, 2015 at 8:53 am

      The problem is that the ReSound hearing aids sold at Costco are locked, i.e. you must go back to Costco for adjustments.


      • Bobby Ear Amp
        May 19, 2015 at 12:06 am

        Not so sure that’s a problem is it? What does a nice premium priced aid adjustment entail-a visit to the audiologist Not clear about the problem.


        • Seabird
          June 2, 2015 at 1:59 pm

          The problem is that I like to choose my own audiologist.
          And I believe that should be my right as a consumer. When I buy a car, I’m not obligated to take my car to that car dealer for the rest of the car’s life. It takes a lot of time and energy to find an audiologist who is familiar with my diagnosis, my issues, and my hearing loss, and that’s an investment on my part that equals the financial investment. Further, for all that there may be standards, every audiologist I’ve ever worked with has his/her own approach to adjusting HAs. And even changing audiologists within the same firm results in a seriously different adjustment. Being restricted to Costco’s (current) audiologist, regardless of training or expertise is great for Costco — and horrible for users. My understanding is that Costco “Audiologist” and audio-tech positions are often entry-level positions for people right out of school. And that the turnover rate is high.
          Being chained to a (frequently changing) Costco employee for all of my adjustments is a no-brainer.

          Do you know if Costco’s Phonak HAs are also locked?
          I was hoping to do the compromise thing: buy cheap at Costco, then turn them over to my audiologist for care and maintenance, and fine-tuning.


          • Dan Schwartz
            June 8, 2015 at 2:33 pm

            @Seabird: Although Phonak aids sold at Costco are unlocked and can be programmed by Target 3.3 & up (current version is 4.1), be prepared to pay through the nose for the “unbundled” services from your favorite audiologist. Most likely you’ll end up paying less overall if you negotiate the price and service package in advance, as many will compete.

            However, don’t throw out the baby with the bathwater: Costco corporate policy calls for best practices when they hang BTE’s, including Real Ear Measurement (REM; probe mic).


            • Seabird
              June 9, 2015 at 2:05 pm

              Thanks. Good to know that I can take Costco’s Phonaks to my own audiologist. The folks where she works are pretty committed to affordable hearing aids for everyone. They’ve unbundled their services and offer “unlimited service packages” $250 for 1 year, $400 for 2 years and $600 for 3 years. I’m pretty picky about my adjustments, and I also have persistently declining hearing and need significant adjustments pretty regularly. So the 3 year package looks like a bargain to me. I only wish that Medicare and my insurance would cover it. But that’s going to take a lot more work on our part, collectively, to get that through.


  6. rico567
    May 29, 2015 at 6:24 am

    I have taken the plunge on a set of the Kirkland KS-6 aids…..for a number of reasons. Bought them a week ago, go in for fitting this morning. I shall report back as to the results.


    • Dan Schwartz
      May 30, 2015 at 3:12 pm

      Just remember: The ReSound aids sold at Costco are LOCKED, meaning if you have a problem, you MUST go back to Costco. What’s more, their philosophy is to only fit about 80% of the people who need hearing aids, which is why the aids ship[ped to them have tinnitus masking disabled: If they cannot easily satisfy the patient, they would rather give you your money back and move on to the next customer than take the time to get your problems sorted out.


  7. steve
    May 31, 2015 at 4:25 pm

    When will ReSound ever upgrade it’s Smart app to work with Androids Lollipop…I need this and hate to have to cancel my samsung s5 app and penalty to go elsewhere to get the iPhone


    • Dan Schwartz
      May 31, 2015 at 9:24 pm

      @Steve: It’s not as easy as it seems at first blush, as the firmware in the aids needs to be upgraded as well as making the Bluetooth stack work correctly in the Android OS. Also, and as we reported last week, they are having all kinds of problems rolling out Aventa software updates, which has the hearing aid firmware upgrader.

      All this being said, although we don’t have it in a published article yet, for a number of reasons we recommend the iPhone 5S or higher over other mobile platforms for our patients, especially those who own ReSound MFi hearing aids, doubly so the ones who wear the LiNX or Enzo (yours truly included), and as Molly Watt pointed out, those who have Usher Syndrome (deaf-blindness)~


  8. Ted W
    June 17, 2015 at 12:19 am

    Thanks for this invaluable information. I have been using the Linx 9’s for a year and while its bells and whistles are nice I am not happy with their basic performance. I was hoping the new ones will be better but it seems that they are not


    • Dan Schwartz
      June 17, 2015 at 5:33 pm

      Ted, please be more specific as to why you not satisfied with the LiNX basic performance. There is a good probability that they can be adjusted. Also, there is a possibility that your hearing is too far gone to where hearing aids can help you, especially if you have cochlear dead zones, which can start to occur at 50dB thresholds in the lows & 60dB thresholds in the highs.

      If the problem is one of noise, I recommend the “Red Flag Matrix” tests of Acceptable Noise Level (ANL) and QuickSIN. You can take the ANL test on your iPhone by following the instructions at this link and then give the results to your hearing care professional so s/he can marry them with the QuickSIN for proper counseling and hearing aid adjustments.


      • Ted
        June 18, 2015 at 10:28 pm

        My problems are in three areas. First, I cannot hear much when people are whispering to me, especially with background noise. Second, unless the PA system is very well adjusted, I cannot understand people using a microphone. Finally, I cant hear actors in a theater or a movie. I find that when I am speaking to a person one to one, the HAs work very well. I will try the tests you suggested.


  9. Dr. Greg A Steinke
    July 15, 2015 at 8:14 pm

    All these comments are very helpful to me as I am about to upgrade my hearing aids so as to have iPhone capability. My hearing loss is very moderate at this point but I would like to have the features available through the iPhone connection. I now have a good sense of the questions to ask as I search and look and make comparisons, etc.


    • Dan Schwartz
      July 15, 2015 at 8:27 pm

      Greg, since you’re a musician, you’ll probably want the capability to adjust your music program(s) to suit your taste. You can do this with aids you buy from local dealers; however the Beltone versions as well as the ReSound aids sold at Costco are “locked,” i.e. you must go back there for adjustments.

      This is especially important if you want to use a TV Streamer when performing to turn your hearing aids into custom in-ear monitors.


      • Dr. Greg A Steinke
        July 16, 2015 at 4:10 pm

        Can you clarify a little more about “locked” and “unlocked?” Are you saying that with an unlocked aid one can change the basic settings of the aid? It would be helpful to know more about what one can be changed by the user whether having to go back to a dealer or Costco. Are there some features that one must still go back to the dealer?

        thanks,

        Greg


        • Dan Schwartz
          July 18, 2015 at 8:36 am

          “Locked” means that if you buy a ReSound or Rexton hearing aid at Costco, then you must go back there for service as we cannot connect the aids to our versions of the programming software. If you have a typical hearing loss from presbycusis and you have a relatively trouble-free fitting, you’ll be OK. However, if you have a problem-filled fitting that goes beyond the skills of the hearing aid professional, then you are pretty well stuck.

          To their credit, Costco leverages their size and volume to allow for a 90 day trial; and also their professionals are instructed to refer customers with complex needs (such as tinnitus) out to other local professionals for more “high touch” services.


          • Carol
            July 18, 2015 at 11:40 am

            Does that referral for “complex needs” mean that Costco will sell me the hearing aids at their price and then unlock them so I can take them to a more highly skilled audiologist who can adjust them to my needs, or does that mean that Costco doesn’t sell to “complex needs” people and we have to pay full price elsewhere?


            • Dan Schwartz
              July 18, 2015 at 3:12 pm

              No: The ReSound, Rexton and Hansaton hearing aids sold at Costco can only be programmed at Costco. If you have more complex needs, you’ll need to go to a full service dispenser or audiologist and buy the hearing aids there.


            • Carol
              July 18, 2015 at 6:48 pm

              What about the Phonaks that Costco sells. I understand that they’re the same as the ones i’d get from my dispenser but with less (no?) wind control. Is that accurate? Are they locked to Costco or are they open?
              Thanks!!


            • Dan Schwartz
              July 19, 2015 at 12:36 pm

              That is correct: Phonak Brio aids can be programmed in Target 3.3 & up (current version is 4.1.1). The Brio is not in the menu, but it’s in the internal look-up tables, so when it is connected it will properly detect. The Brio aids do not have wind block (which works quite well), and also they do not have tinnitus management/therapy, as Costco does not want their audiologists to lose time dealing with tinnitus patients — Refer out and move on to the next one.

              As to whether you’ll end up saving money by purchasing Phonak aids at Costco and taking them to an independent clinic for adjustment, it will cost you a lot: Ethically, audiologists should do this; but because hearing aids are a profit center, expect to pay hundreds of dollars for this service.


            • Carol
              July 19, 2015 at 1:14 pm

              Thanks!
              My (beloved) hearing clinic seems to have taken the high road and has unbundled its services. They now price the hardware and ongoing adjustments separately. (Hardware comes with all the adjustments you need during the 45-day trial period — and I think there’s a later check-in adjustment.) This brings down the initial cost of getting HAs.

              After that initial period, you can pay for adjustments as you go — or buy a 1, 2 or 3-year contract for unlimited adjustments. You don’t pay for that contract until you start using it. I think it’s $600 for the 3-year contract.

              “Getting the lowest price for everything” has somehow become the new cultural ideal. But sometimes — usually? — it’s more important to spend some money to support the services and community we rely on. Because if we don’t, they might not be there when we need them most. When I think about it, I have to see that my hearing future is going to depend on having skilled audiologists who can deal with my increasingly complex hearing. So I guess I’m talking myself out of “saving money” at the Big Box store — because I’m going to need a vibrant community of audiologists over the next 25-30 years.


  10. Justine
    November 19, 2015 at 9:42 am

    I have been a Phonak user for over 20 years but after repeated cracked shell problems with the last pair I decided to try Resound Lynx. I did consider Costco but at my local Costco there is only one Audiologist. The other staff are hearing aid dispensers. I was a little concerned about quality of service so I went to an Audiologist at a University who had the real hearing test equipment. I have now been wearing the Resound Lynx for one week. Despite the hype of better technology, etc., I feel that it is about the same as my Phonak. The wind reduction feature is so so. The sound quality and speech recognition is good. The telephone coil on my land phone is good. The background reduction noise feature only reduces the background noise about 10%. It is hardly worth it. I don’t have a smart phone so don’t know how it works. I am considering taking it back and just going to Costco since I am concerned about the repair costs and only a two year warranty.


    • Dan Schwartz
      November 20, 2015 at 1:16 pm

      @Justine: The Phonak aids sold at Costco are good, and their dispensers are supposed to follow best practices, including using real ear measurement (probe mic); so the services you’ll get there will be the same whether you are served by a dispenser or audiologist. Also, the ReSound LiNX aids sold at Costco are one generation behind the LiNX² sold elsewhere. This is a problem as the RIC aid only is powered by a #312 battery, which is inadequate for all but sporadic streaming.


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