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.
- Signal & Noise: Are We Entering the “Just Good Enough” Era?
- 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.