FDA released the new OTC hearing aid, the tens of billions of Blue Sea market is close at hand

In August, the US FDA announced the establishment of a new OTC (non -prescription) hearing aid class, which will take effect on October 17, 2022. This new regulation started in 2017, and it was not released until October 2021 that the draft regulations were released. Today, the new standard has finally been approved and will have a significant impact on the entire hearing aid industry.

Announcement posted on the official website on the official website (the screenshot is from the FDA official website)

The industry giant quickly heard the wind. In September, Consumer Electronics Giant Sony announced that it reached a cooperation with the world's well -known company Denmark WSA (WS Audiology) to develop OTC hearing aids and promoted in the United States. At the same time, more companies have expressed great interest in this emerging market.

What impact will this new policy affect the hearing aid industry? Except for Sony, will there be new consumer giants into this market? What impacts will it have? The arterial network hopes that this article can be interpreted.

The root cause of hearing aid problem

The hearing problem has become more and more intense in the world.

According to WHO's "World Hearing Report", listening loss currently affects more than 1.5 billion people around the world, of which about 430 million people need to recover services for hearing loss. By 2050, it is estimated that more than 700 million people may experience a medium or more serious hearing loss.

Hearing aid is an effective auxiliary means to solve hearing loss. However, only 17%of the people who can benefit from hearing aids worldwide have actually used hearing aids. Among them, the penetration rate of hearing aids in the UK and France exceeded 40%, the United States is about 27%, and only about 5%in my country.

Dr. Liang Qi, the founder and chairman of the Ear Age, who has decades of experience in the medical listening industry, has a doctorate degree in clinical hearing in the United States and is a practicing hearingist in North America. She founded the Ery Age in 2013. The reason for the low penetration rate of hearing aids, she believes that it mainly depends on the three dimensions.

The first is the user's awareness of the needs, whether the user is aware of the hearing loss, understands the hearing device, and is willing to accept intervention. Secondly, channels and services, that is, whether users have convenient channels can understand products and get services. Finally, the payment ability, that is, whether the user can afford the cost of this product.

"Different countries are different in listening loss education and demand, listening service channels and insurance payment systems. These three dimensions are also different, which affects the penetration rate of hearing aids. This is why the penetration rate of domestic hearing aid is far lower than that of European and American countries. . "Dr. Liang Qi introduced.

Compared with other diseases, the loss of ear disease and hearing has not been paid enough attention, and corresponding professionals and services are lacking in China -except for a few hospitals that are famous for this, even in the three hospitals in large cities, the Department of ONES andophageal are also the Department of ENT. A discipline that is not very valued. This makes patients unable to understand and pay attention to the disease.

Generally speaking, the main wearing crowd of hearing aids is the elderly. The elderly groups in our country are restricted by the growth environment and concepts. They believe that hearing recession is a natural phenomenon, and the degree of attention is not high, which also affects the application of hearing aids in my country.

On the other hand, for a long time, ear disease and hearing loss have often been attributed to disability. The stigma of "wearing aid is equal to the disabled" often makes patients unwilling to use hearing aids. Even though the state has begun to pay attention to publicity and guidance in recent years, the change of concept cannot be achieved overnight.

However, although the United States has a strong sense of user needs and developed channels, the penetration rate is not ideal. In the final analysis, high costs are the main reason why hearing aids cannot expand the audience.

Taking the United States as an example, purchasing traditional hearing aids requires doctors (listeners) to check and prescribe prescriptions. This specification can indeed put the sales and use of hearing aids under strict supervision to ensure the safety and effectiveness of users during the use of hearing aids. Of course, this also means the closed market.

Five major groups including Swiss Sonova Listening Group (Peak Li), Denmark Demant Group (Audikang), Denmark Ruishengda, American Sidak and Danish WSA (only listening, Xijia) occupy more than 90%of majors worldwide The hearing aid market share, the comprehensive gross profit margin is around 55-75%, the profit is quite exaggerated.

This objectively caused the price of hearing aids to remain high. According to statistics, the average price of the US hearing aid is about $ 4,700. However, according to data released by the US Department of Labor, the per capita monthly income of the United States in 2020 is only about $ 3167. It can be seen that even for Americans, the price of hearing aids is unbearable.

Why does FDA issue new OTC hearing aids

To solve this problem, the FDA has newly established OTC hearing aids for the Light to moderate hearing loss. It is still a medical device that needs to be approved by FDA medical device. However, it no longer needs a doctor to open a prescription or configuration process, which can directly buy online or online e -commerce companies, thereby saving a large amount of circulation costs.

This measure allows patients to not have to experience complex and tedious prescription processes, and have more comparative products on transparent e -commerce to choose from, which is undoubtedly good news.

More importantly, the hearing aid circulation channel that was originally controlled by a few hearing aid giants has been released to a certain extent. New entry companies can be less trapped by channels and improve their possibility of entering the market. This will help promote industry competition and reduce prices.

According to foreign media reports, BOSE, a well -known brand of consumer headphones, has always been expected to the huge market for hearing aids. As early as 2014, BOSE acquired startup Ear Machine. The latter has developed a mobile app that can adjust the hearing aid by patients, and no longer needs to be adjusted by the listener. Subsequently, BOSE has been actively lobbying to promote OTC hearing aid regulations, and in 2018, the medical and health department Bose Health was established. One of the main businesses is to use BOSE's accumulation of acoustics to enter the hearing aid market. In October 2018, BOSE's auxiliary headset BOSE Hearing AID was approved by the FDA's De Novo channel, and in May 2021, it was officially obtained by 510 (K) certification.

Bose SoundControl Hearing Aids passed the FDA certification (the picture is from the official website of BOSE)

Unfortunately, because the obvious interests -mainly the resistance of doctors and hearing divisions who are responsible for prescribing prescriptions and compatibles, OTC hearing aid policies have been difficult to progress until 2021. At the same time, BOSE's basic disk -consumer audio field is also facing huge competition, and has to make choices.

According to foreign media reports, BOSE announced in July this year to establish a partnership with Lexie Hearing, and Lexie B1 hearing aids under Lexie will be supported by Bose. The BOSE hearing aids that have been approved by FDA before will no longer produce or sell, but retain the after -sales support of the previous products. In the end, the BOSE hearing aid policy gave up the Bose Health business before the approval of the OTC hearing aid policy, which is a pity.

Although BOSE withdraws from the medical business, other consumer electronics brands are still going forward. In addition to the Sony mentioned at the beginning of this article, the well -known headset brand Jabra is also interested in this market. Its auxiliary products have passed the FDA approval in February.

For domestic, the reference of the FDA's new regulations is very obvious.

Like abroad, the five major groups of hearing aids have basically occupied a monopoly position in China, which has led to the same high prices of domestic hearing aids. According to different product performance, ranging from thousands of yuan to tens of thousands of yuan. Especially in high -end products, domestic prices are significantly higher, and they are extremely unfriendly for audio -obstacles.

However, the relaxation of medical devices on e -commerce platforms in previous years has led to the sales of entry -aid products from a large number of mimic machines to a large number of less than 1,000 yuan. Although these entry products may not meet the needs of patients, it is enough to show that there is huge unsatisfactory demand in China.

"The channels of domestic hearing aid are mainly divided into online and offline. Online and offline are purchased through e -commerce platforms. Offline is mainly through hearing aids and allocating products. Not only the innovation of product technology, but also a new channel service model to provide a new channel for consumers who do not want to go to the hospital and listening center. "Dr. Liang Qi introduced.

"For example, patients can pass the hearing test through a smartphone, then buy the hearing aid directly, and debug the hearing aid according to the patient's hearing condition." Dr. Liang Qi said that for the market that lacks professional listening divisions in China, the OTC mode may may Establish better models and create more innovative service channels and models, so that more consumers accept hearing aids.

Xie Guanhong, the chairman of the well -known headset brand Wan Mo Shengxue Co., Ltd. (1MORE), also agrees with this view. He said that hearing aids are a strong -testing and strong experience industry. The listening service agency currently occupies the main value composition of the industry chain. With the development of technology, hearing aid sales have gradually developed in recent years, and other sales methods such as online and offline with remote medical hearing diagnosis have gradually developed. The FDA's new OTC regulations will further promote emerging channels, making the sales of online and retailers more vigorous.

"We believe that with the development of technology and channels in the future, the value chain of OTC hearing aids and auxiliary headphones is expected to reshape, and the value of upstream and brand will gradually appear." He added.

Guo Qing, who focuses on the development of medical -grade hearing aid products, said that although there are still no relevant regulations for OTC hearing aids in China, the FDA regulations have made everyone realize that traditional hearing aids are not well satisfied with the light moderate medium. The needs of the crowd of listening to the crowd: "This emerging market will be valued and developed. After all, light moderate to listening to users does not have national borders, whether it is the United States or China's light -losing the needs of users, they need to be met."

In addition, from the perspective of regulations, he believes that the OTC hearing aids of the FDA are relatively rigorous, and they have made good specifications in terms of safety and effectiveness, especially the safety. This will have a better reference for domestic hearing aid product requirements and market specifications.

First of all, the FDA OTC hearing aid standard clearly stipulates that OTC hearing aids are only applicable to adults over 18 years of age, so as to minimize the risk of minors under the age of 18.

Secondly, the standards also reduce the safety risk by restricting the maximum output sound pressure. For example, when entering the 90DB SPL pure sound, the output limit of OTC hearing aids at any sound frequency cannot exceed 111dB SPL (products with input compression and user adjustable controls cannot exceed 117DB SPL). "It is foreseeable that the domestic market will also be available to the OTC standard products that meet the FDA at the latest to meet the needs of domestic light moderate to listening to users." Guo Qing added.

The new rules are the blue ocean market, and the consumption and medical camps are based on the ability

For the domestic industry, OTC hearing aids may mean a considerable opportunity. According to the survey, from 2015 to 2019, the market size of the domestic hearing aid industry increased rapidly from 2.84 billion yuan to 5.51 billion yuan, with an average annual growth rate of 18.02%. According to this trend, the domestic hearing aid market will reach 10 billion yuan in recent years.

With the advent of OTC hearing aids, the market growth rate will accelerate significantly, and it will not be a problem. This is a "blue ocean" to be excavated.

For a long time, my country's hearing aid market has been controlled by global hearing aid giants. Although domestic professional hearing aid manufacturers have been catching up, because they started late, although there are listed companies such as Jinhao Medical, overall enterprises are generally not large, and the core key technologies are not perfect. They have not been able to get very good. Breakthrough. This is not much different from the global situation.

However, once the track is switched to the consumer electronics field, the situation may be much optimistic. You know, in recent years, domestic brands have made rapid progress in the consumer audio market, which is a force that cannot be underestimated.

Since Apple released AirPods in 2016, the TWS wireless headset separated by the ears has developed very rapidly. According to data from Canalys, an independent analysis agency in the world -renowned science and technology market, TWS shipments in the second quarter of 2022 have reached 63 million, an increase of 8%year -on -year. It is expected that by 2025, TWS headphones will reach 600 million amazing shipments.

In the field of TWS, domestic forces have played a very critical role: the field of foundry, Goer and Lixin Precision are foundries including many big names including Apple; in terms of brands Domestic brands are well -known brands in the field of TWS headphones; and in the chip field that has been subject to people for a long time, domestic manufacturers such as Hengxuan Technology, Zhu Li and Zhuhai Jayli also lived later and gradually seized share.

The intervention of these domestic forces has caused the price of TWS headphones to drop significantly within a few years. In 2016, Apple AirPods's release price was 1288 yuan, which is a typical light luxury positioning. With the entry of a large number of domestic brands, the price of TWS headphones is almost avalanche, and there are even less than 200 yuan. The decline in prices has obviously stimulated huge market demand.

Due to the fierce competition, these brands are also looking for all opportunities to enter the field of medical and health. Apple, Huawei, and OPPO's smart watches have been approved by NMPA's medical devices. Ear -wearing health equipment represented by TWS headphones is also being included in the plan -public information shows that the use of headphones to achieve health surveillance design has continued to come out recently.

Wan Mo's first -generation auxiliary headphones -EHD9001B wireless intelligent auxiliary headphones (the picture is provided by Wan Mo)

The advent of the new regulations of OTC hearing aids is undoubtedly an excellent opportunity for these consumer brands. In fact, as early as 2018, the well -known domestic audio brand Wan Mo released the auxiliary headphones. In fact, the auxiliary headphones and OTC hearing aids are technically similar.

Guo Qing explained the difference between the two: First of all, it is different of the regulations. OTC hearing aids are still second -class medical devices. The auxiliary headphones belong to 3C headset products. The requirements of the two in terms of safety and effectiveness are different. Secondly, the positioning of the auxiliary headphones is slightly lower, mainly for those who have normal hearing and mild listening; OTC hearing aids mainly face mild to moderate hearing people. Finally, because of the differences in the crowd, the increase in gain is also different. Generally speaking, the amplification gain of the auxiliary headphones is controlled within 15DB, and the amplification gain of the OTC hearing aid can reach about 25DB.

Whether it is an auxiliary headset or an OTC hearing aid, segmentation compression amplification and regulating algorithm uses segmented compression. This algorithm can be described as one of the cores of hearing aid function. It not only needs to regulate the loudness of the volume according to different frequency bands, but also compress and magnify according to the different sound loudness -enlarge the subtle sound that cannot be heard clearly, and suppress the loud sound with a louder.

"In this way, you can satisfy the listener and not excessively enlarge the sound while listening to the sound, so that the listener can hear the sound and protect the hearing." Guo Qing said.

It is not difficult to see that it is not very difficult to change the headset to OTC headphones. If you choose the right scheme at the beginning of the design, follow the corresponding OTC hearing aid standards, and it is not as difficult as expected through approval.

In addition to listening to headphones, more and more ordinary consumer headphones can also be adapted to the external environmental sound to achieve the function of active noise reduction or amplification.

Xie Guanhong introduced that there are more and more TWS headphones equipped with adaptive intelligent adjustment technology. On the surface, they seem to be similar to the auxiliary headset/OTC hearing aid. However, such products are only applicable to users with normal hearing. Although they can indeed sound big, they cannot be used to compensate for hearing loss. "This type of product is mainly used to enlarge sound signals in a special acoustic environment, such as noise environment, hunting and entertainment. At the same time, the sound gain of such product design is magnified within 35DB. The OTC hearing aid is like a fine personalized adjustment for different frequency bands. "

Of course, even if the TWS consumer headset is completely supplemented at all, it is possible to meet the requirements of OTC hearing aids by improving. From the perspective of core technologies, hearing aids include segmented compression amplification, noise reduction and screaming suppression on the multi -channel of WDRC.

"There is no such algorithm technology in consumer headphones. But if the acoustic structure and hardware meet the requirements of the earphones itself, such as high -end headphones itself has innate advantages in these areas, and combined with the corresponding algorithm, you can achieve from consumer headsets to through small changes to consumer headsets to The transformation of OTC hearing aids. "Guo Qing introduced to the arterial network.

According to Guo Qing, the OTC hearing aid scheme listening to technology strictly follows the principles of medical equipment that strictly follows safety and effectiveness, and has met the technical requirements and hearing security requirements in the FDA OTC hearing aid bill. At present, its algorithm plan has been adopted by many manufacturers, which can help consumer electronics brands quickly develop OTC hearing aids.

Looking back at the development of TWS headphones, domestic consumer electronics brands have entered the field of auxiliary headphones, and then entered the field of OTC hearing aids, and quickly reduce product prices, thereby stimulating huge market demand, thereby increasing the penetration rate of hearing aids.

Dr. Liang Qi said that consumer electronics manufacturers have entered the field of hearing aids, including Apple, Samsung, Philips, and Sony, have all been deployed in the hearing aid field. Volkswagen consumers are very familiar with and trusting these brands. They can no longer rely on professionals, making choices easier, especially in China with lack of professionals. Consumers can accept intervention earlier through these familiar brands.

At the same time, consumer electronics manufacturers are particularly good at iteration. Once they enter the market, they will quickly reduce the price of high -performance hearing aids and make it easier for patients to accept hearing aids.

"However, for listeners and compatriots, this means greater challenges. How to make consumers get better hearing health services in the future may be a problem they need to face." She added.

Guo Qing is also optimistic about this. He believes that from the market, OTC does not need to be prescribed, and consumer electronics brands have natural channel advantages to quickly spread out the market. From a technical point of view, consumer electronics giants actually do not need to invest in huge research and development. Professional OTC hearing aid/auxiliary algorithm solutions can quickly launch products that meet the requirements to enter the market.

"In fact, some consumer electronics companies have cooperated with us to develop products that meet the technical requirements of OTC hearing aids." He said.

In terms of product design, consumer electronics brands are almost victorious. The exquisite and small shape can dispel the patient's sense of shame -from the outside, no one can connect a pair of TWS headphones with hearing aids. Under this premise, patients do not exclude hearing aids.

"OTC hearing aid is an extension of the medical -grade hearing aid industry, and the TWS hearing device is developed from consumer -level listening products. This market will attract consumer electronics brands and medical device manufacturers. However, these operators do not have the design and development foundation of consumer products, so there are still certain clocks. "Xie Guanhong said.

It must be acknowledged that the traditional hearing aid industry still has huge advantages. They have many years of clinical accumulation, and they also have more complicated research and development experience in prescription hearing aids. And more familiar with hearing health services. Because of this, consumer brands are currently more cautious about this.

"Consumer audio brands can also be divided into mobile phone brands and headphone brands. The former has the design and development foundation of consumer electronics, while the latter has strong sound product design experience. However, we think Small, the threshold is very high and requires medical qualifications. If you do not have a corresponding preparation, it may not be a good choice. "Xie Guanhong believes that consumer electronics brands still need solid preparation.

He believes that the core competitive barriers of hearing headphones/OTC hearing aid comes from the comprehensive advantages of hardware and software. Hardware parameters and algorithm advantages and disadvantages will greatly determine product performance and patient satisfaction. At present, mid -to -high -end auxiliary headset brands have the research and development capabilities of mainstream algorithms. The main differences come from the control of the chip's autonomous controllable, algorithm ability and advancedness, and the integration capabilities of downstream channels and industrial chains.

According to Xie Guanhong, Wan Mo now has single -ear and bipolar auxiliary headphones. Among them, single -ear auxiliary headphones are mainly based on offline distribution store sales, and double -ear -aid headphones are sold online, focusing on life scenes. The next -generation support/hearing headphones based on TWS form will enter the medical field. It is expected to obtain medical qualifications by the end of the year and will be officially launched next year.

FDA's OTC hearing aid new rules will undoubtedly be a mileage regulations.With the entry of new players, it may greatly subvert the current status of the industry -patients will benefit, and the status of domestic enterprises in the industrial chain may also have a chance to achieve certain breakthroughs.Hearing aid giants may take the initiative to embrace changes and quickly enter the emerging blue ocean market of OTC hearing aids.This can not only compete with consumer electronics manufacturers in emerging markets, gain a place, but also consolidate its advantageous position in the professional prescription hearing aid market.

Perhaps, with the strong union with the consumer electronics brand, like the cooperation between Sony and the WSA, forming a new combination, perhaps a win -win choice.However, the two sides were used to a strong style on their respective battlefields. Whether it can cooperate well, I am afraid that further observation is needed.

It is foreseeable that around OTC hearing aids, there will be more movements in the industry in the future, and the arterial network will continue to pay attention to this.

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