- Published on 18 October 2018
François Julita, Phonak’s director of digital experience, is responsible for developing digital solutions for responding in better ways to the needs of hearing aid users and hearing care professionals. While he was at EIPA (São Paulo, June 20-22), he discussed current changes and their impact on the hearing aid sector.
Mr. Julita, can you explain to us your role at Phonak?
I have been working for the company for some twelve years. I was initially responsible for medical and fitting software, as well as e-business and e-commerce. For the past five years, I have been working on projects related to hearing aid connectivity through smartphones and the Internet, as well as connectivity for medical software.
What exactly is “digital transformation”, the topic you addressed during the EIPA? Connectivity? Online retail? Remote fitting? All of the above?
It is a term that causes a great deal of confusion. Many believe that digital transformation is about apps, websites or “e-business”. In fact, what is happening is that many business models are being redefined in order to adapt to the new technologies at our disposal. These imply setting up new value chains, and this process as a whole goes far beyond a single smartphone app. It is a much deeper (r)evolution, it is about how business models and processes in hearing health care together.
How will this affect the field of hearing loss treatment?
That is a difficult question. What we have seen so far is that in the past two years, telecare solutions, i.e., remote support of hearing device users, have started to emerge on the market. I have been working in the hearing aid industry for twelve years, and it’s only in the last 2 years that things have started shifting. In the future, we will probably see the emergence of new service models including activities such as online remote fitting. In this context, what is usually causing concern for audiologists are the tasks that might be handled directly by end users.
So, changes in the sector are still in their infancy. How do you explain this in view of the high technological component of the hearing aid sector?
Indeed, this can be surprising for such a high-tech industry. I would say that in terms of adaptation of our field to the digital transformation, we are five years behind other industries. Hearing aids have a high technological component; our professional practices, however, rely on traditional and regulated processes. One of the reasons for this is that the service model which has been in place for many decades, has been quite static. The biggest change in last decades was probably the introduction of digital signal processing.
What are the challenges posed by the digital revolution in the hearing aid sector?
The emerging challenges that can be observed are similar to those found in other industries, such as automotive, home automation or consumer electronics when all products can be connected to the Internet. The conversation that is happening now is about determining why and how a hearing device shall be connected and to what other device. A mobile phone? Medical software? Or something else, like a car or a TV or even Alexa?
What can be said, then, concerning the convergence with “hearables”?
That is a vast topic. With the law that was recently approved in the United States, the FDA now has two years to define what products will fall within the OTC (Over-The-Counter) category. The misunderstanding stems from the fact that the FDA has stated that the instruments under this category will still be considered as medical devices, but at the same time, these products can also be sold in a less regulated way. Alongside this, new players are emerging, such as Bragi, which initiated a partnership with Mimi, which distribute the Mimi IO app for a hearing test. The two companies announced their collaboration during this year’s Consumer Electronic Show at CES2018. One can assume that this type of convergence is linked to the legislative developments in the United States. I am confident that within two years, a whole new range of products occupying a niche half way between hearables and hearing aids will emerge. Today, you do not see many people in the street using hearables on a regular base. Yet, with the new Apple AirPods, I see many more people, and even more mature persons, using a device in their ear, also in conversations. This is an interesting phenomenon, because it means that having something in your ear is no longer seen as a psychological barrier to communication.
What about big players such as Samsung and Apple?
Historically, the hearing aid sector was very small compared to the consumer electronics market with the large players. But with the recent regulatory developments in the United States and the upcoming emergence of OTCs, this market could, in theory, become much larger and consequently could attract new and big players. Many of the big companies have a portfolio of patents in the area of hearing loss compensation.. Bose for example launched its “Hearphones” two years ago. When you look at the TV ads for Hearphones, you would think it is in fact an ad for a hearing aid. So, I think there is a high chance for some convergence in three to five years. The beginnings of this trend can be seen with AirPods, whose features are gradually increasing with, for example, real-time streaming through the iOS 12 operating system, which allows the use of the phone as a remote microphone.
How do you think this boom will crystalize in the future?
That is another difficult question, because we have been experiencing exponential curves in all sectors, and we are only at the beginning of a more fundamental change. It is not easy to say what we can expect in ten years’ time, other than the fact that current trends will continue and grow.
How do professionals in our sector feel about the uncertainty inherent to these developments?
At conferences, audiologists and hearing care professionals usually mention two main fears. The first concern is the protection of consumers’ personal data. Hearing care professionals are worried these data will be taken by manufacturers. My answer is that the hefty fines set out by the new regulations on data protection in the event of infringement are a strong deterrent. This means that both patients and hearing care professionals are protected by new privacy laws. The second fear expressed by professionals is that their jobs may disappear. We should move beyond this fear and look at what is happening in other areas of medicine where these new technologies are already at play. What can be observed is that, even if the place of professionals is evolving, the digital transformation will not replace their role as experts. Today, many hearing care professionals are feeling a little overwhelmed... I believe that all industry players, manufacturers and hearing care professionals, should come together to build a shared body of knowledge geared towards the creation of value. At Phonak, for example, we have launched an eAudiology initiative (see #eaudiologyphonak), which brings together professionals who already have experience in this field to identify and share best practices and protocols.
Would you say we are moving from a sales-based model to a servicebased system, given that sales are now provided by other channels, such as the Internet?
When you look at online retail in our industry, many players in the past have disappeared after only a few years. This can be explained by the fact that our sector remains closely linked to health care and therefore to the concept of trust. The same phenomenon occurred with e-banking and banks that wanted to transition to an exclusively online offer. Most of them disappeared because customers expect the bank where they have all their savings to exist physically. So even if people adopt e-banking practices, they also want to be able to talk to their banker in person. This is why fully virtual models have not succeeded. It seems to me that there is a similar phenomenon in our sector. There will be a mix between virtual and “real” contact, because of the need for trust inherent to a sector related to healthcare. The end result might be a market divided into a medical segment on the one hand, and a non-medical one on the other. If this happens, the first would concern the most complex cases, paediatric cases and implant cases. As for the second segment, it is difficult to say what will happen, even if we can assume that it will be more aggressive with online sales for patients with mild to moderate hearing loss.However, for now, the issue of trust is still core to our business, therefore, the market will tend to evolve slowly with a gradual change in the role of hearing care professionals.
Read this feature on our Audiology Worldnews EUHA 2018 Special Issue:
Translation: Ròisein Kelly