Apple Airpods as a hearing aid: Should Sonova be afraid?

Apple's Airpods are becoming hearing aids. Should we be worried about Sonova?

When Apple introduced the smartwatch, watch manufacturer Swatch reacted – and was overtaken. What the Swiss hearing aid company can learn from this.

Published today at 17:58

Apple is continuing to make inroads into the hearing aid market: On September 9, the company introduced new Airpods, which become simple hearing aids via a software update.

Photo: EPA

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Apple, the world's most valuable company, last week various innovations presentedOne of them is initially somewhat overlooked and only now seems to be really making its mark: Optimized functions of the wireless Airpod headphones so that they can also serve as hearing aids in the future. «Wall Street Journal» writes of a “big moment”, the new Airpods “will quickly and magically improve the lives of millions of people”.

Observers are transported back ten years. In 2014, Apple presented the Apple Watch – looking back, this moment was formative for an entire industry: Apple, a powerful company, had emerged and threatened watch companies all over the world with its products. Later, it became clear that the mid-range and low-price segment in particular was under great pressure, including the traditional Swiss brand Swatch. The luxury brands, however, were still able to hold their own.

Swatch was the first to admit that it was a good idea. The Apple Watch is “an interesting toy, but not a revolution,” said chef Nick Hayek. But Apple's watches were quickly successful. The company now produces more watches per year than the Swiss watch industry. The latter has coped well with its entry into the market by concentrating more on expensive products. According to the “Handelszeitung” of luxury watch manufacturer Rolex, Rolex will overtake Apple again this year and become the watch brand with the highest sales. The Swatch Group, based in Biel, has been stagnating for several years and is cutting jobs. It is becoming “the Migros of the watch industry,” wrote the NZZ this summer.

The industry as a whole has fallen into a crisis: the falling demand for Swiss watches and the strong franc are putting pressure on manufacturers. The situation seems critical. This week, the Swiss Watch Industry Association is calling on the authorities to support the watch industry. Among other things, the National Bank should intervene in the foreign exchange market and weaken the franc.

Apple Watch is not a medical device

Is the Swiss company Sonova, the world market leader in hearing aids, now facing the same fate? “In any case, they must take Apple's advance seriously,” says Manuel Peter, research analyst at Helvetische Bank. This also applies to other important hearing aid manufacturers such as Demant and GN Store (both from Denmark). Apple is a powerful new competitor because it has considerable financial resources, technical know-how and a large, loyal customer base.

For him, the comparison between Sonova and Swatch is not entirely valid. Firstly, the watch is a leisure accessory and not a medical device like a hearing aid. Secondly, the additional functions of the Airpods are not comparable to the launch of a completely new product like the Apple Watch. “Back then, many people were eagerly awaiting this new Apple watch and bought it so they could try out a smartwatch for the first time,” says Peter.

This is not the case with Airpods with extended functions. “In general, many people with hearing problems are reluctant to wear a hearing aid and even in old age they are more likely to buy a hearing aid because they cannot understand conversations properly,” says Peter.

Sonova could even get a boost from Apple

Even if Apple now simply turns millions of headphones into hearing aids, this innovation will hardly affect Sonova at first, because the improved Airpods can at best be compared to an entry-level hearing aid. They are still a long way from a full-featured hearing aid, which currently costs up to 6,000 francs.

The improved Airpods therefore primarily appeal to people with mild to moderate hearing loss, who have previously been able to buy cheaper models in stores without having to seek advice from an audiologist. Sonova also offers such simpler devices, but according to analyst Peter, these are generally of little importance for business development.

He predicts that Sonova could even get a boost if Apple slowly introduces more people to the issue of hearing loss. Namely, if the company develops hearing aids for beginners who will then sooner or later have to switch to the more powerful, “real” hearing aids from specialists like Sonova.

The Sonova headquarters in Stäfa ZH are also optimistic. Although they do not yet know all the functions and possibilities of the new Airpods Pro 2, the company has “always supported new, innovative ways to raise awareness of the important issue of hearing health,” writes a spokesperson. “In general, we welcome any development that enables people with hearing loss to benefit from easy access to solutions.”

Sonova buys Sennheiser

Sonova nevertheless seems to have at least become aware of the new situation. Two years ago, it bought the headphone and speaker division of Sennheiser. The company already has headphones in its range that amplify noise.

And what if Apple also offers higher-end, fully functional hearing aids one day? “That could be the case, but it is more attractive for Apple to expand into other fields than hearing aids, which are still a relatively smaller market,” says Peter.

At Swatch it was different. First Two years later, Hayek confirmedSwatch is developing its own operating system for smart watches and other small devices called Swiss OS. Things have gone quiet around this operating system, while Apple's “toy” continues to dominate the smartwatch business.

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Edith Hollenstein is a business editor. She has been working in journalism for more than ten years. More info

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