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Stanford Affordable Hearing Project
Business Report
August 2004
1.2 Industry
Currently, there are dozens of hearing aid manufacturers offering a breadth of products, but it is estimated that six major manufacturers account for 85% of worldwide sales.
These incumbents are known as the “Big 6”, and their established positions in the market present a formidable obstacle to potential new entrants. Because many audiologists appreciate and value their current buying relationships with established manufacturers over smaller new manufacturers, success of new entrants into the market is rare.
These relationships are fostered by reciprocity between audiologist and manufacturer, the convenience of consistency in such a relationship, and the
trusted reputation of an established manufacturer as a maker of quality aids. Another challenge to new hearing device companies is the Federal Code of Regulations that includes FDA regulations relevant to the hearing aid industry. In order to ensure compliance with all legal provisions, a manufacturer must examine the statutes specific to the state(s) in which distribution
occurs in addition to abiding by the broad yet inhibiting federal laws. Another characteristic of the industry is that good health practice requires a patient to undergo a medical evaluation by a licensed physician before purchasing a hearing aid. However, any fully informed adult over the age of 18 can sign a waiver declining medical evaluation.