Baby Boomers, Listen Up

Next year, the first members of the baby boom will turn 60. That might worry policymakers who fret that the U.S. won't be able to afford that generation's Social Security and Medicare benefits. But for Carsten Trads, the graying of the boomers has a silver lining. Trads, a 50-year-old Dane, is the president of Clarity, a Chattanooga (Tenn.)-based division of Plantronics (PLT) that makes telephones for people who are hard of hearing. And as those boomers get older, they're going to be needing Clarity's phones more and more.

"The baby boomers are just about to enter the age where they are going to use our products," says Trads. Speaking the day before the Dec. 3 U.N. International Day of Disabled Persons, he says that the number of people in the U.S. with hearing problems is soaring.

Clarity recently sponsored a Prince Market Research survey showing that 38 million boomers -- about half of all Americans born between 1946 and 1964 -- say they have some kind of hearing loss. "It's a big, big number," says Trads. "That group is going to grow significantly. There's huge growth coming up." A more conservative estimate, from Frost & Sullivan, puts the total at about 30 million.

BARELY TAPPED MARKET.

Clarity is one of several companies specializing in hearing technology that hope to gain from the graying of the baby boom (see BW, 11/14/05, "Listen: The Sound of Hope"). Producers of cochlear implants, devices surgically placed within the inner ear to help people regain their hearing, see opportunities from the boomers, too. Cochlear, the Australian company that's the world's leading producer of the implants, is diversifying into other types of hearing technology to capture more of the booming boomer market (see BW Online, 12/7/05, "Cochlear's Roberts: 'We Have a Unique Opportunity'").

About 1.5 million amplified phones and assistive listening devices (ALDs) are sold in the U.S. each year. Clarity estimates that the market is only about 10% penetrated -- which leaves a lot of room for growth, both now and in the future.

Clarity's innovation is a digital signal-processing (DSP) telephone. DSP hearing aids have been common since the late 1990s, and they've revolutionized the field. Now, Trads says, they're about to do the same for people with hearing aids who need to use the phone. "When you amplify any sound, it's actually very complicated. There are a lot of side effects," he explains. "In the good old days, when you got a hearing aid, you just amplified everything, and that had the tendency to make things worse: You amplified speech, but you also amplified background noise. It was a garbage-in, garbage-out situation."

TAKING OUT THE GARBAGE.

The garbage is particularly bad on the phone. For people with hearing aids, background noise is a real obstacle to using the phone, says Trads. "Phone lines, whether they're cell phones or landlines, tend to have a lot of noise coming with them."

That's where the DSP comes in. What Clarity -- which has an R&D team in Tennessee and does its manufacturing in China -- has done is put a Texas Instruments (TXN) DSP chip in its telephones. That's the same as "build[ing] in a small computer in the phone," Trads says. The computer analyzes the sounds, and "if this computer can figure out this sound has the characteristic that it's noise, it simply takes it out," Trads adds.

But how can the DSP determine what's noise and what's not? "Noise has the tendency to be very stable. If you have something that doesn't vary a lot, it tends to be noise." Take the steady, droning sound of an air conditioner, for instance.

GLOBAL EAR.

Today, there's nothing revolutionary about DSP technology for hearing aids. According to Trads, about 90% of hearing aids on the market are equipped with DSP chips. But he claims that Clarity is the first to bring DSP to the telephone. Clarity's engineers have been working on the project for three years, and a top priority was to bring down the cost: A DSP hearing aid can easily go for over $1,000. That's largely because DSP chips in hearing aids have to be so small.

Miniaturization isn't as important for a DSP phone, though, so Clarity was able to save money. Trads says that producing in China (in the southern city of Shenzhen, across the border from Hong Kong) also helped. Until the late 1990s, the company did its manufacturing in Tennessee. Clarity is now offering two different DSP phones -- a cordless and a corded model -- for $239 each (MSRP)

Plantronics, based in Santa Cruz, Calif., doesn't break out numbers for its Clarity division. Trads says that most of his revenue comes from the U.S., but with populations in Western Europe rapidly aging, too, he's looking to expand across the Atlantic. Throughout the aging countries of the developed world, there's no shortage of people with hearing loss who are eager to take advantage of what the latest technology has to offer.