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Interview: Sennheiser CEO sees consumer audio sale as big step for hearables

Sennheiser announced early Friday that it had found a buyer for its consumer audio division: Swiss hearing aid maker Sonova. Sennheiser had been shopping its consumer division around for several months, so it was simply a question of which company would make the winning bid.

Had another audio brand like JBL or Panasonic met Sennheiser at the altar, it would have been a big step for the legendary headphone company, but it wouldn’t have given us many clues as to the future direction for Sennheiser’s products. But an acquisition by a hearing aid company — especially one as big as Sonova — raises questions about what’s in store not only for Sennheiser but also the headphone category as a whole.

We spoke with Sennheiser co-CEO Andreas Sennheiser and Sonova CEO Arnd Kaldowski to find out more about where the newly acquired Sennheiser division is headed.

We realized that we’d be better off partnering with somebody like Sonova.

Digital Trends: Let’s start with the obvious question. Why are you selling Sennheiser’s consumer division and why did you pick Sonova?

Andreas Sennheiser: We took a strategic look at all of our business segments and we saw great growth opportunities in all four segments: Pro audio, business communication, [Georg Neumann microphones], and also the consumer segment. We realized that we’d be better off partnering with somebody like Sonova [for the consumer business].

We believe that on the pro business, we can grab the growth opportunities ourselves. That’s why we were looking for a partner. The combination of our strengths and Sonova’s strengths together make this the best possible match for the future.

DT: Sennheiser already enjoys an incredible brand reputation in the consumer space. It’s impossible to discuss headphones without talking about Sennheiser. What does Sonova bring to the table that’s going to push the consumer side of the Sennheiser brand even further?

Sennheiser: We believe that Sonova is really strong in combining their strengths on the [research and development] side, but also on the scaling side and the potential investment into that area, which Sennheiser was not able to do on their own at the same magnitude. Sonova is [publicly traded] and a much larger company than we are, and as such has great experience in taking businesses and scaling them in the field of audio. We will manage the Sennheiser brand together.

If you think about the hearable space, there are clearly strong audio capabilities one needs which Sennheiser brings.

Arnd Kaldowski: Sennheiser is a fantastic brand that resonates super-well in the audio space on the high end and with audiophiles. At Sonova, we live on the same side of great hearing performance improvements: High price, high quality.

With regard to what we can bring to the party on the Sennheiser side and the products there, I think with regular headsets, probably not as much. But if you think about the hearable space, there are clearly strong audio capabilities one needs which Sennheiser brings. I think over time they will become multifunctional devices if you bring in speech enhancement, denoising, and artificial intelligence. These are all technologies which we are working on.

Sennheiser technology will support on the audio side — I think then you see the two technologies coming together.

DT: One of Sennheiser’s competitors, Jabra, is a division of a company that also makes hearing aids. Jabra has credited the hearing aid side of the business for some of the improvements found in its latest Elite 85t true wireless earbuds. Do you see a similar sort of synergy between Sennheiser and Sonova in terms of what you will do in the consumer space?

Kaldowski: I think the Jabra [situation] is certainly somewhat comparable, although what you see today in their technology still doesn’t bring some of the go-forward technologies, from sensor technologies to artificial intelligence. But clearly, [Jabra] is an example of where those technologies benefit from each other.

DT: Do you think that Sonova will leverage the Sennheiser brand on the hearing aid side of the business? I see that some Phonak models list “powerful, rich sound” as a benefit — could Sennheiser play a role there too?

Kaldowski: Some people don’t want to see themselves buying a medical product and vice versa. I imagine we could do some element of a co-branding exercise where you may want to underline the strong audio performance of a hearing aid. This is not decided in any shape or form, but you can have, let’s say, a combination where [one brand] is powered by the other.

We’re going to see more and more speech-enhancement capabilities will come to the hearable.

DT: Hybrid devices like the Nuheara IQbuds2 Max are beginning to emerge that combine high-end true wireless audio with hearing enhancement technologies. Where do you see this category going over the next two to three years?

Kaldowski: I think you will see improvement. I think for that technologically, you want to be in the camp of the people who have the best speech algorithms and probably also the best microphones. We’re going to see more and more speech-enhancement capabilities will come to the hearable. We call that “situational hearing” —  augmenting your own hearing capability in a noisy environment for a couple of hours. It’s a new emerging segment where we can bring the capabilities and the knowledge together from [Sennheiser and Sonova].

DT: One year from now, where do you see the combined Sennheiser-Sonova business?

Sennheiser: We believe that the Sennheiser brand will shine much brighter. We’ll have great products out. We have a full pipeline that Sonova can take over now and enhance and even accelerate. In one year, I suspect we’ll see the first combined project where enhanced technology comes into hearables and makes the life of the consumer easier while delighting them with the known Sennheiser audio experience that they all love.

Kaldowski: We see very positive momentum right now in the market reception of new products. I trust that this will continue. It’s a strong team in place and we will find ways over time to add more good things to the road map. I think over time, you’ll see us branching out to new opportunities, but keeping the focus on the things which make the Sennheiser brand strong.

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