Apple Has Another Stealthy Path Into This $4 Trillion Market | The Motley Fool
Apple (AAPL 4.86%) has made no secret about its healthcare market aspirations and has made steady inroads into the space over the past several years. Numerous features on the Apple Watch are geared toward health and fitness. The device boasts a heart rate sensor that can also administer an electrocardiogram (ECG) and detect an abnormal heart rhythm, alerting the wearer to a potentially life-threatening condition. Both the iPhone and the Apple Watch can detect when the user has fallen or has been in a car accident. The iPhone can also store a variety of patient medical records.
Now, another Apple product is helping the company along its path into the massive healthcare market.
Can you hear me now?
An estimated 30 million people in the U.S. are afflicted with hearing loss. That amounts to roughly 15% of the population suffering from the condition — and most don’t wear a hearing aid. In fact, as many as half of people over 75 years or older will develop a disabling hearing loss. Yet as many as 75% of those with the condition don’t use a hearing aid. Why so few?
The devices can be expensive and require ongoing visits to a hearing specialist. Additionally, patients complain that many hearing aids are uncomfortable and don’t fit well. There’s also a social stigma associated with hearing loss, as people fear they will be seen as old. Enter the Apple AirPods.
An Apple a day
Scientists in Taiwan conducted a groundbreaking study to determine if AirPods could aid people with difficulty hearing. In a clinical study of 21 patients, researchers at the Taipei Veterans General Hospital tested Apple’s Live Listen feature, which is available on the iPhone when paired with AirPods or Beats headphones. Live Listen “can act like a microphone” and “can help you hear a conversation in a noisy area or even hear someone speaking across the room,” according to Apple.
In the study published in the medical journal iScience, researchers read a short sentence to patients under various conditions. These included unaided (nothing in their ears), using a basic hearing aid, a premium hearing aid, AirPods 2, and AirPods Pro.
The research found that the AirPods Pro performed as well as a basic hearing aid in quieter situations, only slightly less effective than the premium models. In a noisier environment, AirPods Pro performed as well as premium medical devices, though the researchers noted some limitations. The AirPods Pro performed best if the sound came from the listener’s side, but they weren’t as effective if the sound originated directly in front of the user.
Furthermore — and perhaps more importantly — the AirPods Pro also met four of the five electroacoustic standards required by the U.S. government in order for a device to be called a “hearing aid.” It would only take some tweaks to the decibel level to achieve the fifth standard, meaning AirPods Pro paired with an iPhone could meet the criteria to serve as a government-sanctioned hearing aid.
Then there’s the cost factor. Premium hearing aids cost roughly $10,000, while more basic models run about $1,500. Compare that to the cost of AirPods Pro — which cost $249 — and the advantage is clear. Given the ubiquity of the iPhone and the affordability of AirPods, it isn’t a stretch to envision a future where Apple dominates the hearing aid market.
Another multibillion-dollar market
While estimates vary, according to Precedence Research, the global hearing aid market was valued at roughly $11 billion last year and is expected to grow to $19.5 billion by 2030. For context, Apple generated sales of more than $90 billion in its 2022 fiscal fourth quarter (ended Sep. 24), so it won’t move the needle for the tech giant or its investors — at least not on its own.
Furthermore, this study had a small sample size, but this could ultimately lead to much more comprehensive research. There’s still a way to go before iPhone users can officially use AirPods Pro as a hearing aid, but it suggests yet another stealthy way Apple could grow its slice of the nearly $4 trillion spent every year on healthcare in the U.S.
Danny Vena has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.