The maker of hearing aids is expanding through acquisitions, improving its technology, and changing its name to SonovaValentin Chapero can sympathize with peers who sell things that people don't like to admit they need, like antiwrinkle cream and adult diapers. Chapero is chief executive of Swiss company Phonak Holding, one of the world's top producers of hearing aids. By Chapero's reckoning, some 10% of the world's population is hard of hearing, but only about one-tenth of them get a hearing system. Some are unsatisfied with the technology's performance. Many don't want to admit they need one. "It's very difficult when you are making a product that actually nobody wants," Chapero says.
Phonak is determined to change that, through rebranding, improved technology, and expansion. Phonak, an owner of several brands, plans to adopt the brand-neutral name Sonova in August. And as the No. 3 producer of hearing aids by sales, Phonak also wants to get bigger through acquisitions. The company said in October it would acquire smaller German rival ReSound. Phonak is appealing a decision by Germany's Federal Cartel Office to nix the acquisition.
For Phonak and other companies specializing in hearing technology, the time for expansion is now, as the number of aging baby boomers in need of hearing help climbs rapidly. "Demographics are on our side," says Chapero. In the U.S., where about 2 million hearing aids are sold a year, boomers are "turning 60 at a rate of several hundred per minute," adds Dave Fabry, a Phonak vice-president.
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