Turning Up the Volume at Phonak

(page 2 of 2)

Underdeveloped Chinese Market

While the biggest markets for hearing aids are now in the U.S. and Europe, the fast-growing (and fast-aging) populations of Asia are likely to be the real growth markets in the years ahead. Both China and Japan lag behind Western nations in adoption of hearing aids. "Asia in general is a very under-penetrated part of the world," says Chapero. "The stigma is very strong."

China, with a population more than 10 times that of Germany, has sales of only 200,000 hearing aids annually, vs. 700,000 in the German market. "China is brutally underdeveloped," says Chapero. The U.S. has more than 13,000 retail outlets where consumers can purchase hearing aids; in China, the figure is at most 500. Japan is better, but not by much: Annual sales of hearing aids in Japan, with a population of 127 million compared with Germany's 82 million, are only about 400,000. Phonak is trying to find Japanese partners, and in China the company has opened retail outlets of its own in more than 20 cities.

Chapero is hopeful that advances in hearing-aid technology will make people in Asia—not to mention in the U.S. and other Western countries—more willing to put up with hearing aids. The goal, he says, is to get people to change the way they think of the devices. One way to do that: Ban the words "hearing aid." Says Chapero of the new Audéo device: "We don't call it a hearing aid. It's your PCA, a personal communication assistant."

In Chapero's best of all possible worlds, people will use their PCAs not only to hear better but also to connect to their mobile phones. "I do see within a few years a product where you actually can hear the headline of the e-mails coming in," he says. "So instead of people nervously grabbing their BlackBerry (RIMM) all they time, they will have a voice in their PCA" alerting them about incoming messages.

If the prospect of hearing a voice in your head that nags you about your boss's e-mails is too frightening, though, not to worry. The feature, says Chapero cheerfully, will "definitely be something that can be turned off." That's just another way he's trying to make hearing aids—or PCAs, rather—more appealing.

Einhorn is a correspondent in BusinessWeek's Hong Kong bureau .