Jan 2019 Australian Financial Review
Smart earbud maker Nuheara hopes a shift in its sales strategy will pays off this year, with the company moving from selling its products in big-name electronics retailers to focusing on optical shops. Nuheara makes wireless earbuds called IQbuds, which let users make phone calls and listen to music and act like a hearing aid for people with mild-to-moderate hearing loss, allowing them to amplify conversations and reduce background noise. Previously the earbuds have been sold through retailers such as Best Buy in the United States and on Amazon, but now the business is focusing on the optometry market as it offers more services to the hearing impaired.
Nuheara chief executive Justin Miller hopes the IQbuds will encourage more people to seek help for hearing loss
Nuheara co-founder and chief executive Justin Miller said he found that selling through optical chains resulted in a more "consultative sales approach", which was better suited to the positioning of the product as an alternative to an expensive hearing aid, rather than just as an electronics gadget. "We found that it's a product that doesn't sell itself on the shelf. It takes a consultative-style approach, and optical chains let us have this approach," he said."It doesn't mean that consumer electronics aren't important, but even Best Buy is changing the way they present the product and putting it in the health-related section, rather than the audio section. "In a large consumer electronics store, people don't understand what it really does and it just gets classified as an expensive pair of earphones."
Last month Nuheara scored a deal with Specsavers, one of the first big optical chains to begin cross-selling hearing products, giving it a presence in almost 2000 stores worldwide. The shift from optometrists and glasses retailers into audiology has been recent, with Specsavers announcing in October 2017 that it would start selling hearing products and running hearing clinics in its Australian stores. OPSM is yet to follow its lead.
Nuheara has sold between 30,000 and 40,000 Ibuds in the past 15 months. In November, the IQbuds also became the first "prescribed hearable" device to win a government contract when it was selected by Britain's National Health Service for treating adults and children with mild-to-moderate hearing loss. Beginning in April, the two-year contract with the British government (with a provision for a two-year extension) is expected to generate tens of millions of dollars in revenue.
The British government has forecast spending £34.5 million ($61.5 million) in the first year and £138 million over two years on devices aimed at helping in the early stages of hearing loss. Mr Miller was optimistic the British deal would be the first of many government contracts.
"With the NHS deal ... if you don't want a hearing aid, then IQbuds are the only other choice," he said. "We're expecting a significant amount of revenue from it ... but it's also important because it's a government recognising that there's other ways to treat mild-to-moderate hearing loss. Mild-to-moderate hearing loss is the biggest part of the hearing market, but it's totally underserved."
Nuheara has sold between 30,000 and 40,000 devices in the past 15 months. In the last financial year, the company generated $5.3 million in revenue, up 80 per cent on the previous corresponding period, and a net loss of $7.4 million.
At the Consumer Electronics Show in Las Vegas last week, Nuheara unveiled new products, including the IQbuds Max, which has in-built active noise-cancellation technology and a new design, plus better processing power and power consumption. The company also launched a hearing app store, IQstore, as part of a play to create a broader "hearing ecosystem”. As part of that vision, the company also launched IQconnect, a hearing assessment and sales tool. It is designed to allow sales staff to offer customers a two-minute, in-store hearing test with different frequencies to establish the level of hearing loss. Mr Miller said he hoped IQbuds would encourage people with mild hearing loss to seek treatment earlier. "Earbuds are becoming a fashion item, like what happened with glasses," he said.