In March 2022, the Swiss hearing aid major, Sonova AG, acquired the consumer business of Sennheiser in order to expand its portfolios and to have a direct connection with the consumers. There have been talks about how Sonova will approach the different markets and leverage the reach and trust that Sennheiser products have worldwide. We had an exclusive discussion with Martin Grieder, GVP Consumer Hearing of Sonova AG, to understand the company’s approach and its India-specific plans. Edited Excerpts:
What were the thoughts behind Sonova acquiring Sennheiser’s consumer business?
Grieder: Sennheiser has a very strong business in audiophiles and in premium headphones which Sonova liked. The actual strategic aim was the speech-enhanced hearable segment. We have been looking at this market for quite some time. About 7% of consumers who purchase earbuds are looking for speech-enhanced functionalities in their earbuds. We project this market to be about $3 billion worldwide in a couple of years.
Sonova has the technologies for the speech enhancements, but we as a company were missing the direct access to the consumer channels, and as a brand which consumers recognise, and that is why we acquired Sennheiser.
Sennheiser is going to act as a bridge between Sonova and the consumers. Sennheiser will launch products developed by Sonova under its own branding through its existing channels.
What was the valuation of that deal?
Grieder: Sonova acquired the consumer business of Sennheiser for over EUR 200 million.
Did the Sennheiser’s engineering and the R&D team remain the same or have you made any changes to suit your perspective and business model?
Grieder: We were very complimentary to each other. Sennheiser has all the expertise in terms of sound quality while Sonova brings to the table its advancements in the speech enhancement, battery life and wearing comfort. There was no real overlap in terms of R&D.
In essence, Sennheiser has three R&D facilities now. Germany, Singapore that were already there and the third unit came with us at Switzerland that does all the speech enhancement algorithms.
What are your views on the Indian TWS market and where do you see Sonova in it?
Grieder: Sonova is quite excited about India and the growth opportunities it has to offer. The TWS segment is growing rapidly here with over 60% year-on-year growth. The TWS now contributes nearly 50% in the overall headphone market in India.
What are your plans for India-specific investment/partnership?
Grieder: We have to create high brand awareness in India, both offline and online. We are planning to partner with key retail chains in India to expand our business here and we are in discussions for it.
What do you think of the competition here as the Indian TWS market already has players like Jabra and Sony? Did the absence of Bose help Sonova to expand and capture more market share?
Grieder: We performed well in the premium segment because Bose has a low presence here. India is a very dynamic market and it’s amazing the inroads boAt has made into the entry segment TWS though we do not compete with it. It’s quite impressive that a local Indian company can create such a success story.
Have you ever thought of lending your sound expertise to any other vendor for example a smartphone or a smart TV maker?
Grieder: We have had some discussions with Samsung about lending our expertise to their smart TV solutions but that did not bear fruit. There have been talks now as well with other brands to lend our well-known sound technologies and algorithms.
Aren’t you bothered by the fact that the TWS market is being dominated by Chinese players offering functionalities at a very cheap rate?
Grieder: No, we aren’t. Let them come to us with the quality and performance because we do not compete with them directly. We are much more comfortable in the premium segment.
