The Next Sound You Hear

Beyond the Hearing Aid

You’d think that business would be booming for hearing aid manufacturers, given technological advances, an aging population, and the fact that hearing aids receive high satisfaction ratings for consumer electronics. But as a whole, the industry only sells $2.5 billion worth of hearing aids a year, and recent overall growth rates have been stagnant, Ruzicka says—about 2 to 5 percent per year. Both Ruzicka and Dybala attribute slow growth to the stigma that hearing aids still possess as being a last, low-tech resort for the old.

“People still have the idea that hearing aids are not high tech,” Ruzicka says. Efforts to get doctors to test people’s hearing regularly and advocate for hearing aids to provide better quality of life have also fallen flat, he adds.

Starkey currently holds 14 percent of the world hearing aid market—behind Siemens (based in Germany) and Oticon (Denmark), primarily because many European government health agencies pay for hearing aids. “They really don’t care about providing a miniature product,” Ruzicka says. “They want to buy them like razor blades.” On the other hand, Starkey holds the largest U.S. market share for hearing aids, at 25 percent. Most American customers must bear the full cost of hearing aids themselves; if they’re plunking down their own cash, they want the tiniest models with the most high-tech features, which can cost up to $3,000 apiece.

And that’s the part of the market where Starkey is staking its future. Ruzicka has completed the first phase of this by concentrating on R&D to build up its technological prowess. Destiny is the first fruit of these efforts. Phase two will once again tap the lesson he learned from Bill Austin. “He believed if enough people had a chance to try a hearing aid, they would benefit and the company would grow, and he was right,” Ruzicka says.

Starkey also is looking for opportunities beyond the hard-of-hearing market. Last year, the company introduced SoundPort, a custom-fitted Bluetooth-compatible wireless telephone headset for people with normal hearing. Fitting professionals attending a Starkey training conference last fall were enthusiastic, says David Olson, director of Starkey’s telecommunications products division: “They really cheered us on and wanted us to develop this category [audio products for normal-hearing people] for them.”

Olson’s 18-year-old division has always served a small, separate market for custom headsets for office workers and pilots, he says. But Ruzicka has given his division a new mandate to develop products that blend hearing technology with Bluetooth. Bluetooth is a fast-growing wireless technology for headsets that uses less battery power than other technologies, like Wi-Fi. More than 40 percent of cell phones sold worldwide in 2006 are expected to be Bluetooth enabled.

Starkey is already taking advantage of Bluetooth to make hearing aids more compatible with everyday ear gear, like telephones and TVs. One new product in this area is ELI (for “ear level instrument”), a tiny device that clips onto the bottom of any make of behind-the-ear hearing aid for use with cell phones. It reduces feedback by turning the aid, in effect, into a wireless headset.