Hearing Aid Stocks Drop After Apple Adds Health Features to AirPods

By Helena Smolak

Shares of hearing-aid makers took a hit after Apple unveiled a new version of its AirPod headphones that offers hearing-aid features.

In morning trade in Europe, shares in Italy's Amplifon fell 5.6%, while stocks of Switzerland's Sonova Holding, Denmark's Demant and GN Store Nord dropped 1.1%, 2.8% and 1.8%, respectively.

The news stoked concerns about new competition in the hearing-instrument market, after some analysts had long seen Apple and consumer-electronics companies as potential new entrants into the space that could pose a threat to higher-priced hearing aids made by specialist.

Apple said its AirPods Pro 2 would include a hearing test to determine hearing loss, which can be shared with health specialists, and real-time sound amplification capabilities among new health features. The AirPods Pro 2 cost $249.

The U.S. tech giant expects the hearing test and aid features will soon get marketing authorization from global health authorities and will be available this fall in more than 100 countries and regions, including the U.S., Germany and Japan.

"We believe that the news confirms that the market focus on the hearing-care market is increasing, and this could have two major mid-term effects: the expansion of the overall addressable market, but on the other hand an intensification of the competition," Equita Sim analyst Davide Marchesin said in a note to clients.

Apple first launched its AirPods wireless headphones in 2016 and has been adding new hearing features over the years, which led some analysts to forecast an entry into the hearing-aid market.

The push into hearing aids aligns with Apple's broader health strategy, Vontobel analyst Sibylle Bischofberger wrote in a note.

"We assume that Apple will broaden the market as it will help people to earlier access hearing aids when their hearing problems are still less severe," Bischofberger said. "Once the disease progresses, we assume that these patients will eventually need to see a professional fitter."

More than 1.5 billion people around the world suffer from hearing loss, according to the World Health Organization. The U.S. Food and Drug Administration ushered in a category for over-the-counter hearing aids in 2022, but analysts say the market has seen limited uptake.

Hearing aid use is increasing, but stigma remains a barrier to wider adoption, Vontobel's Bischofberger said.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

September 10, 2024 06:08 ET (10:08 GMT)

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