I suspect that, as this year and the ’00 decade come to a close, few people will pine for 2009’s business climate. The recession continued to take its toll on our enterprises and investments, posing the question, “Will I ever be able to retire?” Here a few “top items” from this rapidly expiring year:

Stability returns to the market. Although most business types will not remember 2009 as a stellar year, the hearing aid market did rebound from the poor second half in 2008. Hearing Industry Association (HIA) figures through September show a 6.1% increase in unit sales, albeit only a 2.2% increase for the private sector compared to huge unit gains (27.7%) for the Department of Veterans Affairs (see August 2009 Staff Standpoint). It’s a pretty good bet that we’ll see strong fourth-quarter growth figures—not so much because hearing aids are flying off the shelves, but rather last year’s fourth-quarter sales in the private sector were awful (-6.6%). However, even taking this into account, the hearing industry was spared much of the pain that many other industries felt; we saw overall sales decrease by only -0.73% in 2008 (-2.5% for the private sector), followed by four quarters of positive growth in 2009. This year’s sales should substantially exceed those of 2007.

But revenues lag for many. Several indicators suggest that, for most dispensing offices, revenues from hearing aid sales and related services probably remained at about 2008 levels. For example, a mid-year HR online Web poll on this website indicated that about one in three practices (34%) experienced net revenues similar to 2008, while one in four reported their net revenues were worse than in 2008. So, from a “glass-half-empty” viewpoint, 58% reported that their net revenues stayed the same or decreased. However, 29% reported increased sales of more than 10%, while 13% reported increases of 1% to 5%.

Flight to value. In general, consumers were more reluctant about making large purchases, and those who did purchase hearing aids in 2009 were more likely to opt for lower-cost devices compared to previous years. Some market analysts believe that the worst period of the recession caused a temporary halving of the premium market (ie, there was a mass migration to mid- and lower-priced product lines). In a March/April HR online poll, a total of 74.5% of respondents said that the recession caused their patients to seek lower-priced hearing instruments. Not surprisingly, many new product launches in 2009 were aimed at the mid- to economy-line categories. Financing for consumers’ purchase of aids was also an often-mentioned topic in articles and presentations.

Mini-BTEs. According to HIA third-quarter statistics, behind-the-ear (BTE) hearing aids now constitute 63.4% of the market, a huge increase from 2000, when they made up 20.2% of the market. Likewise, judging from the use of smaller batteries (size 10 and 312), mini-BTEs now make up 43.6% of all the BTEs sold to the private sector. Receiver-in-the-canal (RIC/RITE) BTEs, another subset of BTEs consisting of both mini and standard sizes, constitute 43.3% of the BTEs dispensed in the private offices.

Major acquisitions. Hearing aid manufacturers continued to purchase dispensing offices in 2009, but at a slower pace than in recent years. Among the most notable acquisitions of 2009 was Sonova’s $65 million purchase of Newport Audiology—possibly the nation’s fourth-largest dispensing chain with 360 locations, accounting for about 45,000 hearing aid units. Sonova, the parent company of Phonak and Unitron, also announced the purchase of cochlear-implant maker Advanced Bionics last month for $480 million (see page 46). William Demant Holding (WDH) announced in April a new company, Oticon Medical, which has now introduced the FDA-approved Ponto bone-anchored implant system to compete with Cochlear Corp’s Baha. WDH also purchased Grason-Stadler Inc (GSI), adding to its diagnostic equipment portfolio that includes Interacoustics and Maico. Additionally, Sonion was purchased by the Altor Fund, an investment company based in Stockholm. Even HR and HRP were involved in an acquisition when Anthem Media purchased the Allied Healthcare Group of magazines from Ascend Media.

What else? Check out the perspectives of 16 leaders in the industry in our annual HR Looking Back, Moving Forward feature. Also, look for more end-of-the-year compilations here online and in our March annual industry analysis.

The staff of The Hearing Review wishes you the very best of the Holiday Season and New Year, and we thank readers and advertisers for your continued support and valuable input.

Karl Strom