World Audiology Sales To Grow At 5% Rate, Spurred By Aging Population, Smaller Hearing Aids

Business Wire, April 30, 1995

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Spurred by an aging population in the industrialized world and development of ever-smaller and less visible hearing aids, audiology product sales will grow from $1.1 billion in 1993 to $1.6 billion by the year 2000 at a 5 percent compound annual rate, projects a new study just released by Frost & Sullivan.

Ninety percent of the market is currently accounted for by hearing aids while audiometers and impedance analyzers each make up 3 percent of total revenues and the rest of the market is divided, in descending size order, into EP (evoked potential equipment), real ear and hearing aid analyzers, otoscopes and electronystagmographs, says the report, WORLD AUDIOLOGY PRODUCT MARKETS: COMPETITORS KEEP EARS TO THE GROUND FOR HINTS OF IMPROVING SALES.

Aging of the population will provide a steady stream of hearing aid customers. Advances in microelectronics and biomaterials may result in proliferation of hearing aids so small they are invisible to others, eliminating the stigma still associated with the devices. Growth is projected to increase later in the decade and in the early years of the next century compared with 1 percent levels in 1993 and 3 percent growth projected for 1994.

Audiology products will also be in greater demand as ear disorders become more widely recognized and understood. Market strategies emphasizing consumer education will become more prevalent. Audiology products are becoming more computerized as they grow smaller. Computers are being increasingly used in design of nearly all audiology products, resulting in more efficient, durable and cost- effective equipment that is easier to use and offers more data analysis and storage capabilities. Prices for many types of equipment have been dropping as a result.

The first completely-in-the-canal (CIC) hearing aids were introduced in the early 1990s and the future will bring even smaller devices, such as micro hearing aids that can be placed within the substance of the eardrum or attached to the ossicles. By increasingly eroding consumer reluctance to use hearing aids for appearance reasons, these developments will support growth. Hearing aid circuitry will continue to improve as well, screening out unwanted noise and producing more life-like sound.

The trend toward combining instruments, such as evoked potential systems and ENGs, will continue. Many vendors now design their systems to be expandable. With the growing use of standardized computer systems, even instruments from different manufacturers can be combined together.

Service is the key competitive factor in the audiology products market. Up to 20 percent of hearing aids are returned by end-users. Other audiology products, marketed to practitioners, normally last many years and may require occasional service or upgrades, making after-sale service crucial.

Frost & Sullivan is an international high-technology research firm. All Frost & Sullivan reports are based on extensive interviews with marketing and technical experts from selected companies in each market segment. Primary research is validated by thorough analysis of available secondary research. Frost & Sullivan is the leading publisher worldwide of high-technology research reports.

Report: 5034-54 Publication Date: 1994 Price: $1695

Total Audiology Product Market:

Revenue Forecasts (World),

1990-20003-1 Total Audiology Product Market:

Revenue Forecasts (World),

1990-2000gures

Revenue

Revenues Growth Rate

Year ($ Billion) (%)

1990 0.98 _-

1991 1.05 7.2

1992 1.10 4.9

1993 1.12 1.2

1994 1.15 3.0

1995 1.21 4.7

1996 1.27 5.2

1997 1.33 5.5

1998 1.41 5.6

1999 1.49 5.6

2000 1.57 5.6

Compound Annual Growth Rate (1993-2000): 5.0%

Note: All figures are rounded. Source: Frost & Sullivan

CONTACT: For further information please contact:

Amy Arnell Kristina Menzefricke Nadge Keryhuel

Mountain View London Paris

(415) 961-9000 44 71 730 3438 33 1 4742 9127

(415) 961-5042(fax) 44 71 730 3343 33 1 4742 9129

REPEATS: New York 212-575-8822 or 800-221-2462; Boston 617-330-5311 or

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