Additive Manufacturing or 3D Printing – frequently thought of as the technology that is going to make traditional manufacturing obsolete. What many individuals fail to recognize is that this technology has been around since the 1980s (1) and is far from overhauling the current manufacturing industry.
3D Printing will primarily be a complement to current manufacturing versus a revolutionary technology due to unit cost economics. This form of manufacturing works best in areas where unit customization is vital (versus mass produced units), however, 99% of all manufactured parts are standard and lacking the need for customization (2).
Sonova (the “Company”), the market share leader in hearing aid manufacturing (3), falls in the 1% of customized manufacturing that is a perfect candidate for 3D Printing. Sonova was one of the earliest adopters of this technology, and in 2001 started using 3D Printing to improve its manufacturing process (4).
Traditionally, Sonova had employees handcraft custom hearing aid shells. The issue with this process is that ear canals are so tight that a fraction of a millimeter mistake in production can lead to severe discomfort for users. Shells printed by 3D Printers are precise replicas of silicone ear impressions taken by healthcare professionals and thus reduce the time and error previously experienced using handcrafted hearing aid shells (5).
“It’s really important that we accurately reproduce that impression in order to make sure that we wind up with a very comfortable fit for the patient and good retention in their ear,” said Bill Lesiecki, Director of Business Services at Sonova US. “There are ears that are very challenging. 3D printing is made for that kind of customization, so it can really have an impact.” (5)
Despite being a leader in its use of 3D Printing, Sonova is consistently looking for ways to remain in front of its competition. In July 2017, the Company printed its first Vitro B’s titanium casing, which is 15x stronger than the shell of an average acrylic device, is water resistant, and is the size of a fingertip (26% smaller than the average product) (6).
Scott Witt, Director of Product Management, calls the Virto B-Titanium “the most discrete hearing aid ever produced” by the company and matches demand from patients for an “invisible device” that fits well within the ear canal but also provides performance (6).
Sonova’s strategy is to lead innovation in audiological performance and consumer experience (7). The Company plans to use these innovations to increase penetration in developed and developing markets.
It’s widely cited in developed markets that individuals in need of hearing aids don’t get or wear them for reasons including: cost, unattractive look, and discomfort (8). As the Company continues to innovate and come up with improved products such as the Virto B-Titanium, management expects to increase penetration, in this case due to the “invisibility” and comfort of the Virto B-Titanium.
Penetration of hearing aids in developing markets is significantly below that of developed markets, 2% -3% and 27%, respectively. The primary drivers of this are i) access to hearing care professionals, ii) awareness & trust, and iii) purchasing power (7). As the Company continues to print products and the technology improves, it’s reasonable to assume the cost per unit will lower, especially in older model hearing aids, making access to products more achievable in developing markets.
Despite the promise that can be seen from innovation, I’d caution the Company of new competition as costs to manufacture decrease. The focus on audiological performance, or the technology within the 3D Printed shell, is where Sonova can maintain its competitive advantage for the long-term. Without strong and protected technology, it is reasonable to expect healthcare professionals to attempt to enter the hearing aid manufacturing market given the relationship with patients and relative ease associated with 3D Printing.
A similar case is currently unfolding in the orthodontics space with patent expirations. Within a month of this happening, five startups have started making products that will compete with Invisalign at half the price, using e-commerce and telemedicine to cut costs. Some analysts expect new entrants with cheaper offerings could mean more patients, rather than chipping into Invisalign’s existing customer base, however, many other analysts disagree (9).
As 3D Printing continues to evolve especially within the hearing aid industry, I’d urge Sonova to focus its attention on the technology within the 3D Printed shell to ensure the competitive advantage created to date remains in place for years to come.
Several questions remain – How can Sonova create a competitive advantage in the hearing aid shell space in a world of advancing 3D Printing (if possible at all)? Will the continued advancements in 3D Printing make it so that doctors can make their patients hearing aid on the spot?
(1) D. Spaeth. 3D printing is changing the face of multiple industries. ECN: Electronic Component News 61, no. 9 (October 2017): 21–23.
(2) M. Holwef. The limits of 3D printing. Harvard Business Review Digital Articles (June 23, 2015).
(3) Sonova Leads The Future Of Mass Customized Manufacturing. https://envisiontec.com/inside-a-world-leading-3d-printing-factory/
(4) 3D printing technology for improved hearing. https://www.sonova.com/en/features/3d-printing-technology-improved-hearing
(5) How EnvisionTEC 3D printing is enabling the mass manufacture of hearing aids. December 8, 2017. https://www.tctmagazine.com/hear-and-now-enabling-mass-manufacture-hearing-aids/
(6) B. Jackson. Sonova Introduces First 3D Printed Titanium Hearing Aid. July 12, 2017. https://3dprintingindustry.com/news/sonova-introduces-first-3d-printed-titanium-hearing-aid-118089/
(7) Sonova. Investor & Analyst Day Presentation. October 16, 2018.
(8) E. Manfred. The Problems with Hearing Aids – and the Solutions. April 27, 2017. https://seniorplanet.org/the-problem-with-hearing-aids-and-the-best-solutions/
(9) M. Tindera. Bracing For Competition? Cheaper Challengers Enter Invisalign’s $1.5 Billion Market. May 2, 2018. https://www.forbes.com/sites/michelatindera/2018/05/02/bracing-for-competition-cheaper-challengers-enter-invisaligns-1-5-billion-market/#fd962dd23920