Strategy and businesses
Hearing instruments business
It is a very exciting time to be in the hearing instruments business: the market is changing faster than ever before as the baby-boomer generation arrives at the age when hearing loss becomes common. These new consumers are more self-reliant and demanding, seeking optimal performance and connectivity, choice of sales channel, and excellent, flexible support. Developing countries such as China represent large untapped demand with a track record of rapidly adopting advanced technology. The digitalization of our solutions gives our consumers seamless contact with the media and experiences they enjoy, while our online eSolutions provide new opportunities for us to offer services and enhancements.
We are grasping the potential of this rapidly evolving market through our commitment to remain at the forefront of innovation and proven hearing performance. We have the industry’s broadest portfolio of hearing care products, providing a solution for every type of hearing loss. Our three hearing aid brands – Phonak, Unitron, and Hansaton – maintain their distinctiveness, but advance together by sharing R&D, improvements in processes, and new paths to the consumer.
At the center of our hearing instruments business stands the Phonak brand, available around the world through all our sales channels, including our own audiological care businesses. Phonak represents the leading edge of hearing aid technology, regularly setting new industry standards for hearing performance while introducing major advances in connectivity and remote support. Unitron, with its innovative Flex eco-system, supports the businesses of hearing care professionals, while Hansaton is positioned as an exclusive brand focused on independent audiologists.
Key areas of activity
The highlight of this financial year was the launch of Phonak Audéo™ Marvel, powered by our new leading-edge technology, based on Sonova’s proprietary SWORD™ Made For All wireless chip. It allows virtually all users, irrespective of the type of phone or other Bluetooth enabled device they own, to stream high quality stereo sound to both ears. This means genuinely hands-free phone conversations, access to all streamed music, voice, and video content, and hassle-free connection to wireless microphones. But Marvel’s most important feature is a hearing experience so impressive, even at the initial fitting1, that we call it “Love at First Sound.” With Marvel, Phonak has once again taken a major step to significantly improve the audiological performance of hearing aids.
That is not all: Connection to a phone allows instant, easy access to a suite of eSolutions, from remote audiologist support and direct consumer feedback to real-time voice-to-text transcription of phone conversations. And thanks to the low power consumption of the SWORD chip, all of this performance is supported for a full day on a single charge for consumers who have chosen our proven lithium-ion rechargeable technology.
The market response to the Marvel technology has been very positive, further strengthening our market share and average selling price. As always with Sonova innovations, the new technology will be introduced in a phased way across our product portfolio.
- Jansen, S., & Woodward, J. (2018). Love at first sound: the new Phonak precalculation. Phonak Insight, retrieved from www.phonakpro.com/evidence, accessed October 16, 2018.
Sonova has direct access to over 90% of the global hearing care market through its own wholesale companies, and reaches over 100 countries when partner distributors are added. Hearing care is a diverse market with individual, national, and regional variations, so we set our distribution strategy to reach consumers in their preferred way. We offer our brands through multiple sales channels – large store networks, independent audiologists, managed care providers, and government healthcare institutions – to assure each consumer the broadest access to optimal hearing solutions.
We have strengthened our strategic focus on two areas with the greatest potential for increased demand for innovative hearing solutions: the baby-boomer generation of consumers in developed countries and the under-served but quickly increasing middle class in developing, high-growth countries.
Success in these markets depends, not just on excellent performance and technological innovation, but on close engagement with each consumer, ensuring that our solutions make a strong contribution to a seamless hearing experience in everyday life. Here, eSolutions have an important role to play, maintaining the relationship between the consumer, the hearing care professional, and Sonova throughout the lifetime of the product. The consumer gains from continuously optimized performance, convenience, and support; we gain deeper market knowledge and a permanent presence on each user’s hearing journey.
Market growth is one source of future success, but there are also opportunities to further increase productivity and profitability in our current business. Such a wide product portfolio distributed through so many channels offers many areas where processes and structures can be further streamlined. For example, we have optimized our operations structure in the US, folding three separate facilities into one. We are also consolidating the highly-skilled production of our custom products into fewer, advanced centers in each major region. Each of these operational improvements frees up capital for investment in growth opportunities, such as our new dedicated support organization for managed care providers.
We continually assess how we sell, not just what we sell, and are further optimizing our sales and marketing efforts. The marketing launch of our Marvel technology was the largest ever in the industry, and we are capitalizing on that effort through repeat campaigns (including television advertising) throughout the product life cycle. These campaigns are supported by claims from clinical and consumer studies that substantiate the real-life benefits of our solutions, and ensure that we sustain market awareness, fill gaps in distribution, and keep bringing in new customers throughout the innovation cycle. Targeted digital lead generation gives us the ability to pinpoint where we have the greatest potential to generate demand. All in all, we intend that our business processes should live up to our products in their sophistication and performance.
