Hearing aids price & product development update

Hearing Aid merger will effect consumer price and product choices

How will the new Widex and Sivantos MERGER effect the hearing aid community? I will review some of the probabilities.

Usually, when two big companies combine in an industry that’s already highly concentrated, antitrust regulators are suspicious. It can mean less competition, higher prices, slower innovation, and weaker customer service.

But the hearing-aid industry is already in the midst of technology-driven economic change. New low-priced competitors are now challenging the Industry leaders by taking advantage of constant reductions in the costs of advanced hearing-aid technologies. And in the U.S., the “Over-The-Counter Hearing-Aid Act” Which deregulated hearing aid sales is expected to continue making it easy for new competitors to enter the retail market.

The largest Six hearing-aid manufacturers have already responded to increased competition by lowering prices for their entry-level products. At the same time, they have consolidated their leadership in the premium-priced high end of the market with a succession of new, high-tech innovations. And the profits from those high-end sales are helping them continue their traditional investments in hearing-technology improvements.

Widex and Sivantos MERGER should be able to compete more effectively at the entry level on price with affordable, high-quality products. And they will probably continue to compete with the other leading manufacturers to be first to develop and deliver the latest new products and technologies to high-end customers.

So consumers looking for the latest advancements in high priced hearing aids should be able to continue looking forward to a constant stream of innovation from the “Biggest Five Manufacturers,” including Widex/Sivantos. At the same time, they should continue seeing more moderate prices for entry-level custom hearing aids.

“Sivantos” was grown out of the former “Siemens”hearing-aid business in 2015 with backing from EQT Partners, a private equity firm funded by Sweden’s Wallenberg family. EQT is known as a patient investor that has said it’s committed to the company’s long-term growth.

“Widex” has been a family-owned company since its introduction decades ago and is known for its commitment to R&D and constant development. The merger should help meet Widex’s need for a stronger financial foundation to continue competing at both the high-end and entry level of the hearing-aid market.

So, hearing-aid sellers can expect continuity from their sales, supplier and support relationships. And professionals should look forward to more cutting-edge products and technologies coming from the combined company.

However there are countless uncertainties. Especially about how it will impact consumers and the professionals who depend on both companies.

For example, if there’s a big push to save money, consolidation of Home-office functions could impact the professionals who rely on consistent product and sales support from each company. The details will be revealed when the merger is finalized, in about one month

More important will be how the combined companies respond to competition from new market entrants. If Widex/Sivantos and the rest of the “Big Five” are able to compete successfully with new, lower-priced competitors while continuing to lead the industry in hearing-technology innovation, then everyone wins.

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