How can tiny devices that seem to provide real benefit to hearing loss sufferers be so expensive? In earlier posts, we saw that research and development play a critical role in how much hearing aid manufacturers charge for their products. Also, many audiologists include various services and accessories in the price of hearing aids to ensure the patient can receive the maximum benefit from each instrument. In this post, we discuss how "market penetration" impacts how much hearing aid manufacturers charge for their products.
Market penetration is the extent to which a product is recognized and purchased within a particular market. Apple enjoys enormous market share and brand recognition. The iPad is considered the most successful launch of new technology in the history of the United States. As of September, Paul Slone points out that 84 million iPads had been purchased with 94% of Fortune 500 companies owning them for business purposes. Apple boasts a 68% market share of all "tablet" sales. Also, 350 million iPods have been sold since its introduction in October, 2001. Apple's iTunes store is now available in 63 countries and has sold over 20 billion songs. Over 66% of all items purchased through the iTunes store are downloaded onto another Apple product. Apple products enjoy a high percentage of market share and brand recognition. Because their products dominate the market, they have the luxury to lower their prices accordingly. As of this date, hearing aids do not enjoy the same level of market penetration. Dr. Bettie Borton, a clinical audiologist in Alabama, states the following:
Hearing aids still have a fairly low market penetration. Of the 37 million Americans who might benefit from amplification, only about 1 in 5 actually utilize the available hearing technology. We have not seen the same price reductions that are inherent to widely used electronic devices like TV’s, computers, cell phones, etc., found in virtually every household. So, what’s the result? Without sufficient market penetration, the product pricing remains higher for everyone.
With this in mind, it's easier to understand how pricing for hearing aids is determined. To read Paul Slone's article about Apple products, click here. Dr. Bettie Borton's blog can be read by clicking here.
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