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• Transcript

  John R. Luna (00:00): 

  There's 48 million Americans with hearing loss and 38 million Americans do not own a solution, and this will change that for them because now they'll be able to afford it and they'll be able to access it wherever they live. 

  James Kotecki (00:20): 

  This is CES Tech Talk. I'm James Kotecki. CES 2023 is January 5th through 8th in Las Vegas, and we are here to get you hyped and get you smart about the world's most influential tech event. Today, digital health in the form of a product you can use to hear this very podcast, Smart Earbuds for hearing enhancement are here promising a generational shift in how we listen, not only to audio from our personal devices, but to the sounds of the real world around us. The company bringing this technology to CES is Nuheara and its CEO, John R. Luna joins us now. John, let's start with some context, when people come to your booth at CES and they try on your earbuds, what are they going to experience? 

  John R. Luna (01:08): 

  For Nuheara, we will be able to show them for the first time how we've made a change from just a consumer electronics company with hearable products and personal sound amplifiers to a medical device manufacturer with our first hearing aid as a medical device cleared by the FDA called the HP Hearing Pro. They'll be able to experience the product, ask us questions about it, and then see our complete lineup of what we have available today and talk about our future innovations as well. 

  James Kotecki (01:35): 

  I can see you, the audience cannot, but you are wearing one of your products right now. Can you just describe to people just what these look like on your head? 

  John R. Luna (01:42): 

  Sure. Well, I think they look great. For those of you that can't see it, they're earbud style devices, I'm actually wearing the HP devices right now. These will be available soon. The reality is they are different from other hearing aids. They basically are earbud style. They look like true wireless earbuds, and they have the ability to self fit and be able to meet a person's hearing loss needs for mild to moderate hearing loss. 

  James Kotecki (02:07): 

  And visually, they're kind of... They're black, they're slick, they look high tech. It looks like something that you might see somebody jogging around with any day of the week. These are not like traditional hearing aids people might be thinking of that might be more intentionally flesh colored or kind of designed to blend in. Is that intentional? 

  John R. Luna (02:23): 

  It is intentional. I mean, I think you have other brands and products that have chosen specific colors and have stayed with those colors throughout the lifetime of their products. I see that you're wearing one of the competitor products now, but- 

  James Kotecki (02:34): 

  We shan't name it. 

  John R. Luna (02:35): 

  The reality is we've stuck with the darker colors and it's intentional. You want it to know that you're wearing something and it's worked for Nuheara throughout its life of cycle of products. 

  James Kotecki (02:46): 

  Is the idea though that people might be more comfortable getting something, even a medical device now that you're able to sell? Is it people are more comfortable with it if it looks like something that might not necessarily be a medical device? Is it less embarrassing for people in some ways? 

  John R. Luna (03:00): 

  I think that people are used to wearing something in their ears. People in public are used to seeing other people wearing something in their ears regardless of color or style. So I think the traditional hearing aid form factor 80, 90% are behind the ear over the last 10 years, they look like hearing aids. When somebody thinks of a hearing aid, they can picture it in their mind. These are something that look different than traditional hearing aids, and I think those that have hearing loss, especially at a younger age, don't mind having something in their ears. And these progressively will get smaller over time, but they offer a lot of innovation in technology within their form factor, currently. 

  James Kotecki (03:34): 

  My understanding is one of the innovations here is that you can kind of tune into the world around you in different ways. So as much as we can describe this in words, what's the experience of someone wearing these and putting these on and what they're able to hear from the world around them and directionally in terms of what they're able to tune in and tune out? 

  John R. Luna (03:49): 

  There's so many features in our consumer electronics product, the IQBuds 2 Max that was introduced at CES 2020, I call it a Swiss Army knife for hearing. I mean, it has everything that you would want in a product from active noise cancellation to directionality to preset programs for different listening situations that someone may choose to listen to. Putting that product on, you automatically have an excellent sound quality and you've got the ability to personalize it to some level. In addition to being able to stream music, turn off the world with active noise cancellation and have an immersive sound experience. And then in the medical device, through our clinical research and our studies on it, we've taken that and simplified it so that it reaches hearing impaired consumers regardless of age. Our average consumer for the consumer electronics product is in their 50s. They're active, they're still working. They may have different use needs than maybe somebody 20 years older. 

  James Kotecki (04:43): 

  Rounding out the description of the consumer experience, my understanding is both of these, both the consumer product and the medical device product are using an app on a phone or a mobile device to be able to control and tune this in. Is that right? And have you had to make adjustments for maybe an older crowd that may be using this for medical purposes? 

  John R. Luna (05:00): 

  That's a great question. Yeah, we do use an app, the IQBuds App for the IQBuds and then the HP Hearing App for our hearing aid. And the OTC Hearing Aid went through, as I mentioned, clinical studies with the National Acoustics Laboratory in Sydney, Australia. It had different age groups from younger folks, 18 to 50, and then we had folks that were over 50 to 60 and then those over 70 years old. And so as you change the population of who's going to be wearing these in the US initially and then globally, you have to meet the consumer where their technology savviness is. And we did learn that less is more when it comes to some of the features through the app with regard to usability. And so that's what we've taken into the medical device. As a consumer wearing these products every day and using them every day, you have to be using your app on your smartphone and be familiar with that. And so I think those that are going to be the most successful would be those that use their cell phones every day. 

  James Kotecki (06:02): 

  And are there certain adjustments that this product can make or maybe will be able to make in the future automatically? If it goes into a noisy room and you're wearing it, is it able to make adjustments on the fly without you going onto the phone? 

  John R. Luna (06:13): 

  It always has what's called compression or the ability to reduce loud sounds for comfort and so that the product doesn't cause any damage to your hearing. So it reduces sounds around the environment by frequency specifically automatically. As far as changing directionality and some of the other features, right now we're leaving that in the user's control on a conscious basis to make those decisions with the environments that they go into. We do have the ability to automate that, but from what our experience has been over the last five years with products in the market and iterations of the product as it's brought out over time, we find that consumers like to control their personal listening experience in all environments that they go in throughout the day. Automation is good for some populations, but what we're finding is people like to have that control and to be able to tap or use an app to be able to make those changes. 

  James Kotecki (07:01): 

  So a product like yours obviously combines a number of different technologies and innovations together. What was the hardest part of this nut for you to crack technologically to make this all work? 

  John R. Luna (07:10): 

  For us, it was our algorithm, which is the digital part of the software that basically can do what a professional can do in a clinic, but do it automatically. So through the devices we can actually test the person's hearing by frequency, and then in each ear we can have the algorithm called Ear ID automatically set the amplification in each of the devices so that it's custom to that person's hearing loss or hearing needs. That's one of the main innovations that allows us to do this, and that's really what self fitting OTC hearing aids are meant to do. 

  James Kotecki (07:46): 

  And then I assume you could continue to do tests over time as the person's hearing situation progresses, and each individual earbud could then change and continue to be custom for that person's hearing. 

  John R. Luna (07:58): 

  They can do the test every day if they choose and have it automatically calibrate, or every six months or every 12 months. I think it's recommended that once a year you recalibrate or if you notice a difference in your listening over time. 

  James Kotecki (08:09): 

  So when you quantify how much better you can make someone's hearing with a device like this, how much hearing loss can a person have and still get use out of a Nuheara product? 

  John R. Luna (08:20): 

  So the devices are made for adults, 18 and over, in the United States per FDA guidelines and rule, that have a mild to moderate hearing loss, typically a moderate hearing loss will go to about 60 decibel of hearing loss or 60 DB hearing loss. And so the devices are made to fit that population, which is about 90% of the hearing losses that are unaided out there of the 38 million folks that need devices in the United States. We can improve their hearing by 30%, speech, understanding and noise. So the improvement is through the use of directional microphones. We have the ability to reduce sounds from all around and just focus forward. And that results in a 30% improvement in speech understanding in the presence of background noise. And we've clinically proven that in our study, in our 510(K) submission to the FDA. 

  James Kotecki (09:09): 

  And I suppose the nuance there is it's much better than just simply jacking up the volume, right? Because you're doing things directionally and algorithmically and on a custom basis, you're able to do a lot more improvement than just raising the volume on what someone's getting in their ears. 

  John R. Luna (09:21): 

  Yeah, I think the key here is that it's by frequency, the amplification is specific by frequency from low frequency to high frequency. So you think of a piano keyboard as an example for listeners, right? If somebody with a mild to moderate hearing loss may hear the first... Below middle C or all the low frequencies to the mid range just fine and not have a hearing loss there, but they might have a hearing loss in the higher frequencies. And as you go up in octave, it's like hitting the mute pedal at some level and at some keys you're not going to hear it. So the reality is with amplification by frequency, we can provide the amplification only where they need it and then add in directionality and add in noise reduction in some of the other algorithms, which gives them a hearing ability better than those without devices in their ears. 

  James Kotecki (10:03): 

  We should definitely bring up the OTC component of this, it's something that you've continued to mention on this interview, the over the counter factor here. We're recording this episode in mid-October of 2022. And really as we're recording this, the news is coming out of a seismic change for your business thanks to a change in government policy. So can you kind of set that up for us? What is new here? What happened and why does that matter for your business? 

  John R. Luna (10:27): 

  Sure. Over the last five years, the FDA has been working on an OTC Hearing Aid legislation that went into law this October 17th of 2022. So there has been a huge shift. It did happen in October. It was a historic day for Americans for the first time ever being able to access hearing aids in retail, and that's going to stop professional retail. That's actually any retailer that will offer the products. And so from affordability and access, it allows those 38 million Americans who do not have a solution or chose not to purchase in the previous scenario, to be able to go to their local consumer electronic store, online or a local pharmacy that carries OTC hearing aids and actually purchase something over the counter and walk out with it that day and fit it themselves or subjectively fit it themselves. 

  (11:15): 

  So if they've got to perceived mild to moderate hearing loss, they can access hearing aids for under a thousand dollars in many cases, a pair. And that changes things because in the past, the average was about $5,000 a pair in the United States, and many times it was out of pocket with little to no insurance coverage. 

  James Kotecki (11:30): 

  It's interesting that you said this has been going on for five years. Was it a struggle to get this through Congress and the legislative process and the regulatory process? 

  John R. Luna (11:39): 

  The legislation side of it took some time. It was introduced initially in 2014 and 2015 by Senators Elizabeth Warren and Chuck Grassley in the Obama administration. At the end of the Obama presidency, he mentioned it in one of his last speeches in December of that year, and then CTA when the bill came through the legislation bipartisan approval, CTA was behind it and advocated for it in March of 2017. And then in August of 2017, President Trump signed it into law and then nothing happened really at that timeframe. Then the pandemic hit, of course, and then this year, August, in the Biden administration after a July mandate by the President, an executive order... President Biden said, "You have 120 days FDA to publish the rule. It's passed due. It was due three years after it was signed. It was due in 2020." 

  (12:31): 

  This year then in August 17th, it came out as the final rule, and there was a six day enactment period, and that got us to October 17th, 2022. So it was bipartisan, it did pass, and it took a couple times to go through to get it passed, but there was a lot of advocacy and work done by Consumer Technology Association and other groups to make this happen. So it's a big win for CTA and it's a big win for Americans in general. 

  James Kotecki (12:54): 

  CTA, which you're mentioning most listeners probably know this, is the organization that puts on CES and the Consumer Technology Association, in addition to doing CES in Las Vegas every year, is also a trade association that advocates for the consumer technology industry. Do you think that your legislative and regulatory journey here has lessons for other consumer electronics companies or issues about how to approach these kinds of policies when it comes to the government? 

  John R. Luna (13:22): 

  As long as it's bipartisan, yes. I think that there's a lot of work in Washington DC that has to happen, and I think the CTA and CES with the Government Affairs Council and bringing legislatures to CES, having that awareness, doing CES on the hill, and for those legislatures that don't get to the CES event in Las Vegas can have some exposure to the innovations, the technology is key. And then the work that the technology and standards team does as well as the leadership driving the awareness and then creating standards around this technology and innovation will continue to allow other products that may be prescribed or not OTC at this time, move in this direction. And I can tell you from a recent technology and standards meeting that I attended, there's a lot going on that will move in this direction from devices from different areas in health and wellness. 

  James Kotecki (14:13): 

  Was there a certain way that you messaged this that allowed it to get bipartisan backing? Were there different choices that you made along the way that you think might have made it easier for people on both sides of the aisle to get on board? 

  John R. Luna (14:27): 

  I think bringing for the first time the awareness of the limitations of the past distribution model, having the scientific community come in and present as well as the medical community and industry gave both the Democratic side and the Republican side and the House and Senate and the President's Council, the ability to understand the overall need and why this would benefit Americans, not only from a health standpoint and the ability to hear better, but also from a financial standpoint and access. And I think that that was the key, access and affordability, those were the two big ones. 

  James Kotecki (15:04): 

  Well, I think it's an encouraging story to folks that if you have the right policy and you have the data on your side, that Congress and the government is able to actually work together and get something done here. And by the way, do you have numbers on, before this was happening, X number of people just weren't getting any kind of hearing device, and now Y number of people that didn't before might be able to have access. 

  John R. Luna (15:28): 

  The statistics are there's 48 million Americans with hearing loss and 38 million Americans do not own a solution. And so 15 to 20% who have hearing loss have done something about it. They've purchased through medical or professional channels in the past, but it's the 85% of the mild to moderate population or those that don't have access or can't afford hearing aids that are missing out. And this will change that for them because now they'll be able to afford it and they'll be able to access it wherever they live. 

  James Kotecki (15:57): 

  And do you think that there's an element of consumer training that goes on here because you now have these two different lines of business. One is a consumer electronic earbud product, one is a medical device, but they both look and in many ways kind of function somewhat similarly from the user's perspective. Is it easier to get people understanding that they might have hearing loss or that they can easily do something about it by wearing and getting something that looks very similar to the kinds of things that they already have and some cases, have actually purchased through Nuheara itself? 

  John R. Luna (16:25): 

  Yeah, I think the difference is the FDA clearance, right? And the 510(K). Medical device quality of manufacturing is very different than consumer electronic device manufacturing, components are different. There's UL laboratories tests, there's cytotoxicity tests, there's all sorts of things that you have to be compliant with to be a medical device versus a consumer electronic device. So there's some technology innovations and some hurdles to be a medical device that are different. But more importantly, it is encouraging that we have this product available that consumers can try and try it whenever they choose to, any day of the week. 

  (17:00): 

  I think that there are some functionality differences. There's definitely some manufacturing differences, and it'll prove out over time because now the law has changed. The FDA behind it, meaning behind the law and behind the change for consumers should have a level of confidence at the consumer level that these are reasonably safe and effective for use as hearing aids, as an option for them. And there are consumers that have hearing loss that would've never tried an earbud in a consumer electronics version, but there are also folks wearing consumer electronic products that need hearing aids and need the different functionality. So I think there's a market for both, but we do know that there are 38 million Americans right now that could benefit from these types of devices. 

  James Kotecki (17:44): 

  Because this is CES and we're always looking to the future, I want to ask you a couple questions about some places that this technology could go or maybe even is going. Is there a world where I can put on something that looks like your product and there's someone across the room who's speaking and maybe the device can't pick up the sounds properly, but can you do any kind of integration with computer vision and voice synthesis and be able to kind of reconstruct a person's voice and then put it into my ears? 

  John R. Luna (18:12): 

  Our product and technology can integrate with any kind of device, whether that's an earbud, a headset, an audio speaker from a computer, looking forward there's a lot of possibilities. One of our large investors is Realtek. Realtek is a semiconductor manufacturer in Taiwan. Their legacy and our technology combined together can do a lot of things. And so we're looking towards the future and we'll be bringing some of that to CES in 2023, and then you'll see much more of that in the future at CES 2024 and beyond. 

  James Kotecki (18:42): 

  I wonder how this looks from a VR and immersive gaming perspective, especially if we're talking about fine tune nuance technology that can understand directionally where things are coming from and amplify certain things. Obviously audio is a big part of that VR immersion that people are trying to achieve. And so how does your product play into that? 

  John R. Luna (19:02): 

  Well, much like looking at the computer vision and voice synthesis net question, VR and gaming is very similar. We're looking at those applications and use cases as well for our technology and future products and as are our competitors. You can see that there are other companies in the space, including us, that look at gaming because obviously you want to reach all populations, and it's such a large part of the world now, and it is something where you have this immersive experience where with VR as an example, you're using two or three of your senses from tactile to vision to hearing. And if you have a hearing loss or if you want personalization or if you have other gamers coming through audio or you're actually trying to read... If it's a virtual game with live folks on the other end, you want to be able to have that in real time without latency issues and without any delay. I can tell you from playing games with latency and delay, that's why I stopped playing games with my younger children because they're much faster at it than I am. 

  James Kotecki (20:02): 

  By the way, I should have congratulated you earlier on all the work you did on the regulatory legislative side. And I'm mindful of the fact that you basically spent like five years pushing this boulder up a hill and you finally got to the top. And I'm like, Okay, what about VR? What about all this other stuff that you could do with it? And so you've obviously made huge strides, but of course CES is all about looking to the future. So I have to ask these questions, but I'm mindful that it took a lot of work just to get to the point that you're at right now. I wonder if it's possible just to kind of ruminate on society for a bit. I imagine that when the Walkman first came out, personal headphones and audio tapes in people's pockets, there might have been some people who were thinking, what's this going to do to society as everybody walks down the street with their own personal headset on kind of shutting out the world? 

  (20:40): 

  And then of course other kinds of headphones and earbuds and all these kinds of things became basically ubiquitous now. So do you think that your technology is going to make any kind of fundamental shift in how people continue to personalize their audio environments and turn on, turn off the world, as you said, directionally, listen to things? Or is this really just an evolution of where technology has been going for some time? 

  John R. Luna (21:03): 

  It's an evolution of technology and where earbuds and the form factor and personalized hearing has been going for some time. I think the COVID-19 pandemic definitely changed how we all interact around the world, globally, work from home, being isolated to your homes by choice or by decree, is something that happened to all of us. Many people turned to video calls and audio calls as their only interaction for personal conversations, staying connected with family and friends as well as the home office environment. And that technology changed. So we saw a boom in online sales and an increased use during the 2020, 2021 timeframe with people in their work for home and looking for earbuds and active noise cancellation and the ability to control their sounds scapes. So it has happened sooner than the evolution would've taken, but the last couple of years has accelerated that growth. And then this legislation, as we've discussed, has then changed that now more towards a medical device case and a focus on the US market. 

  James Kotecki (22:04): 

  CES 2023 this year has a theme of human security for all. From your perspective, how does better hearing fit into that? 

  John R. Luna (22:12): 

  Healthcare as an example, isolation, anxiety, frustration, stress, ease of listening, All of that has to be addressed when you have a hearing loss. And there's also a correlation between early onset dementia and an untreated hearing loss. So for consumers that have an untreated hearing loss, the longer it goes and the longer they're isolated without sound or that information, they seem to have earlier onset than others that are aided. So there's some studies about that, that'll be coming out in the next 12 months, and I think there's a lot more to learn about that side of it. But healthcare is easily addressed by hearing better, for sure. Personal income, there's been research and studies done historically that you earn more and you have a better work experience, you have higher performance at work in your career when you are aided if you have a need. 

  (22:58): 

  And also if you have the ability to control noise in your environment and don't cause a hearing loss, but actually have a comfortable noise situation or less distraction at work. OTC hearing aids are now affordable in cost, and so does our consumer electronic product on that product. And then personal safety, obviously, being able to hear the world around you, warning signals and sirens alerts, as well as just oncoming traffic and cars or somebody shouting to you, if you have a hearing loss and you're missing that, personal safety's a huge factor in hearing, especially when you're in public. 

  James Kotecki (23:27): 

  Well, I can just tell you from personal experience during the pandemic, the ability to block out some of the noise in my house both saved my productivity and probably my sanity. So I appreciate the work that you guys are doing on all those fronts. 

  John R. Luna (23:40): 

  That makes two of us. 

  James Kotecki (23:41): 

  John Luna, the CEO of Nuheara, thanks so much for joining us. 

  John R. Luna (23:45): 

  Thank you. 

  James Kotecki (23:46): 

  Well, that's our show for now, but there's always more tech to talk about. Here's a preview of the next CES Tech Talk. 

  Speaker 3 (23:54): 

  Over the next 10 to 15 years, you're going to see a big transformation in the energy consumption in the supermarket, as well as all of the greenhouse gases that are emitted from them or not emitted because of the new refrigeration systems and the new technologies that we've deployed. 

  James Kotecki (24:11): 

  Please subscribe to this podcast so you don't miss a moment and get more CES at ces.tech. That's CES dot T-E-C-H. Our show is produced by Nicole Vidovich with Kristin Miller and Mason Manuel, recorded by Andrew Lynn and edited by Third Spoon. I'm James Kotecki talking tech on CES Tech Talk.