Rising need-based demand for hearing aids from the elderly population will grow revenue
New York, NY (PRWEB) March 26, 2014
Hearing aid manufacturers have benefited from the estimated 38.0 million Americans with hearing loss. While 90.0% of individuals with mild to moderate hearing loss are not expected to require hearing aids, the industry still managed to develop a market niche among the burgeoning elderly population. According to IBISWorld Industry Analyst Sarah Turk, “Age-related hearing loss buoyed demand for hearing aid devices, as many individuals with heart disease, diabetes and chronic illnesses, were more susceptible to hearing loss compared with other demographics.” The advent of technology, particularly 3-D printing, has streamlined the manufacturing process by enabling manufacturers to create hearing aid shells individually tailored to fit a patient's ear, which lowered operational costs. However, the industry has contended with mounting price-based competition from global manufactures. Aging populations, particularly in countries within Asia and Europe, have incited more manufacturers to offshore their manufacturing facilities to be in closer proximity to end users.
While the industry has grappled with strong price-based competition and a highly concentrated market, many hearing aid manufacturers have managed to develop a market niche. In particular, many hearing aid manufacturers have moved toward including high-tech, high-margin cochlear implants and bone-anchored hearing aids in their product portfolio. During the five years to 2014, industry revenue is expected to grow an annualized 1.0% to $1.3 billion, including 1.5% revenue growth in 2014 alone, due to industry operators increasingly investing in research and development; many manufacturers have invested in making their products compatible with bluetooth technology, enabling the industry to differentiate itself from global manufacturers. Profit is also expected to rise, as consolidation lowered operational costs and allowed operators to focus on high-margin product development, such as light and inconspicuous hearing aid devices.
During the five years to 2019, industry revenue is forecast to grow due to rising need-based demand for hearing aids from the elderly population, which is expected to make up a larger share of the overall population. “As hearing loss continues to be one of the most common, unaddressed health conditions in the United States, the industry will benefit from a relatively untapped market,” says Turk.
The Hearing Aid Manufacturing industry is composed of a small number of large companies, with the average establishment employing 95 workers, according to IBISWorld estimates. As a result, market share concentration within the industry is high. Industry player Siemens employs over 700 people at its hearing instruments-manufacturing facility in Piscataway, NJ, and manufacturers about one in every four hearing aids in the global market. The area is highly concentrated, with the majority of industry operators looking to serve the global market. Moreover, given the high-tech nature of the industry, research and development expenses can be substantial deterrents for new entrants, further leading to higher market share concentration. Due to the financial constraints and the established brands already in the industry, concentration is expected to remain high. With new technologies being introduced, such as cochlear implants, established firms will look to enter this market with the acquisitions of smaller companies who are familiar with these technologies. This is evident in Sonova Group’s acquisition of cochlear implant manufacturing company Advanced Bionics, in late 2009.
For more information, visit IBISWorld’s Hearing Aid Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Hearing Aid Manufacturing industry manufactures audiological devices, including hearing aids, measurement and testing devices and cochlear implants.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.