By John Miller
ZURICH (Reuters) - Sonova on Thursday launched a new hearing aid microchip capable of streaming audio directly from wireless mobile devices as the Swiss company aims to close the gap to Danish competitors that pioneered similar technology years ago.
Sonova, the world's biggest hearing aid maker, was criticized for missing an opportunity with tech-savvy Baby Boomers when rival GN Store Nord introduced direct-streaming hearing aids for Apple devices in 2014.
Sonova now aims to compete on that turf with a 2.4 GHz chip that enables direct streaming from not just Apple but most other Bluetooth-equipped devices as well, including those running Google's Android system and conventional cell phones.
Android-based smart phones now account for more than 80 percent of sales, according to research firm Strategy Analytics, with iPhones at about 13 percent.
"We needed a solution that works for everybody," Sonova Chief Executive Lukas Braunschweiler told Reuters in an interview. "We finally showed up with a solution on their (GN Store Nord's) home turf."
GN Store Nord credits its "Made for Apple" hearing aids, now in their third generation, with capturing market share and boosting profits.
Its switch to the 2.4 GHz technology started in 2010 and was initially dismissed by rivals, GN Store Nord CEO Anders Hedegaard said in an interview on Thursday.
"Back then, the others laughed at it," Hedegaard said. "Now, it has taken them seven years to enter this market. Going forward, we will focus on selling our product, which is going very well at the moment."
Denmark's William Demant and Widex, as well as U.S.-based Starkey, also have hearing aids that stream audio directly from devices that run on Apple's iOS system.
Sonova's entry will bolster growth of its $2.4 billion annual sales but is not likely to produce an immediate windfall because it may cannibalize from other Sonova products, analysts said.
Moreover, high out-of-pocket costs mean wearers typically keep their hearing aids for five years or until they break, meaning a mad scramble for the latest gadgets is unlikely.
"Most patients are 70 or 80, and they are dealing with different challenges than whether they can stream music from their phones," Zuercher Kantonalbank analyst Sybille Bischofberger said.
But she added: "Technologically, Sonova was no longer on top, so this helps them catch rivals."
Sonova, which spent $25 million over three years to develop its low-energy microchip that it calls SWORD, will first equip one of its Phonak-brand hearing aids with the new technology before expanding it to its Unitron, Hansaton and Advanced Bionics lines.
The move expands options for "Phonak-friendly" audiologists who since 2014 have had to steer clients demanding direct streaming to hearing aids made by rivals, said Thomas Lang, marketing head for Sonova's Phonak unit.
"This is the slightly younger, Baby Boomer-type consumer that says, 'Direct connectivity is interesting to me because I use the smart phone, it's part of my life, and I want the hearing aid to seamlessly work with that,'" Lang said.
(Additonal reporting by Julie Astrid Thomsen in Copenhagen, Editing by John Revill and Michael Shields)