R&D DEVELOPMENT IN GN RESOUND

Peter Scheel, SVP R&DNovember 20, 2014

Introduction to GN Store Nord

Leading the wireless revolution in hearing aids

Collaboration with Apple

Innovation continues

AGENDA

Slide 2

THE HISTORY OF GN STORE NORD- MORE THAN 140 YEARS OF COMMUNICATION

Slide 3

From industrial conglomerate…

1872 GN opened the

world’s first telegraph

connection between

Europe and Asia

1940-70s Diversification

1990s from

Services/products

2000s mid

Personal communication

… to focused technology leader in personal communication

1869 The Great Northern

Telegraph Company was

established on the initiative of

C. F. Tietgen

GN STORE NORD GROUP STRUCTURE

54% of revenue 8% of revenue 26% of revenue 13% of revenue

GN Store Nord

GN ReSoundHearing instruments and diagnostic equipment

GN NetcomHands free audio

MobileOtometricsHearing

Instruments

Contact Center &

Offices (CC&O)

Slide 4

Introduction to GN Store Nord

Leading the wireless revolution in hearing aids

Collaboration with Apple

Innovation continues

AGENDA

Slide 5

Slide 6

WHY WIRELESS TECHNOLOGY IN HEARING AIDS?- THREE MAIN APPLICATIONS TO IMPROVE QUALITY OF LIFE FOR HEARING

AID USERS

Ear-to-ear

connectivity

Connecting to

external

devices

Wireless

fitting

• Connecting to external devices thereby

sending signals directly from the external

device into the hearing aid

• Best method of improving the signal-to-

noise ratio, which is an important

consideration for all hearing impaired

• No uncomfortable cables or any

intermediate device for patients to

wear during fitting

• The two hearing aids exchange data to

make the hearing aids work as one

system. Improving usability and sound

quality in different sound environments

… Not the easy solution, but the right solution…

2.4 GHzWIRELESS

PLATFORM

ON THE

LEADING THE WIRELESS REVOLUTION

Slide 7

William Demant

Sonova

Widex

Siemens Starkey

GN ReSound

(Starkey)

Magnetic induction

(3-15 MHz)

Near-field wireless transmission has a limitation in range of around 50 cm

• Signal degrades proportionally to the distance cubed

Wireless signal easily passes through and around objects

Characteristics of wireless solutionWireless technology

Direct wireless streaming is possible

• Signal degrades proportionally to the distance squared

Not an open standard in all regions – problem when travelling etc.

900 MHz signals can not pass through objects

900 MHz technology

Direct wireless streaming is possible

• Signal degrades proportionally to the distance squared

Open standard for public use since 2001 - future proof frequency

2.4 GHz signal can not pass through objects

2.4 GHz technology

Slide 8

THREE DIFFERENT WIRELESS SOLUTIONS AVAILABLE IN

HEARING AIDS

Key barriers to entry:

• In ReSound Alera, a 3 cm long antenna is

folded into the hearing aid

• Antenna is not built into the device, it is

rather the other way around

• Innovative and efficient power management

of the radio is key for running on HI

batteries

Clear benefits of having succeeded

• Direct streaming of sound

• No latency due to audio data compression to proprietary MI signal

• Material future benefits – an open standard and opportunities to create

solutions with other devices

Slide 9

WHY 2.4 GHZ TECHNOLOGY DIRECT STREAMING WAS

PERCEIVED AS IMPOSSIBLE IN HEARING AIDS

• High frequency entails short wavelength

that does not go through the head

• Waves can only ”bend” around the head if

the antenna is designed correctly

• Waves travel at the speed of the light and

bounces on surfaces but the solution has to

be solid outdoor as well

Clear benefits of having succeeded

• Meaningful audiological end user benefits from ear-to-ear

communication

• No need for two wireless solutions with obvious disadvantages:

• Two radios

• Two antennas

• Potential interference between the radio signals

• Additional power consumption

• Larger instrumentsSlide 10

WHY 2.4 GHZ TECHNOLOGY EAR-TO-EAR CONNECTIVITY

WAS PERCEIVED AS IMPOSSIBLE IN HEARING AIDS

GN RESOUND TECHNOLOGICAL LEADERSHIP- THE THIRD GENERATION OF 2.4 GHZ TECHNOLOGY HEARING AIDS

Slide 11

1st generation

ReSound AleraDirect fitting

Direct to

accessories

Direct ear-to-ear

Direct control

Direct to iPhones

The 2.4 GHz technology development and long-term competitive edge

2nd generation

ReSound

Verso

3rd generation

ReSound

LiNX2010

2012

2014

• While perceived as being impossible, GN ReSound brought the 2.4 GHz wireless connectivity to the

market with ReSound Alera™ in 2010 – a cornerstone of GN ReSound’s turnaround

• Another breakthrough innovation was brought to the market with ReSound Verso™ featuring ear-to-ear

connectivity based on 2.4 GHz technology – today still exclusively offered by GN ReSound

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-15%

-10 %

-5%

0 %

5%

10 %

15%

Launch of

ReSound AleraTM

Launch of

ReSound VersoTM

GN ReSound organic growth

INNOVATIONS DRIVE GROWTH- 2.4 GHZ TECHNOLOGY HAS BEEN DRIVING GROWTH AND MARKET SHARE GAINS FOR GN

RESOUND

Slide 12

Introduction to GN Store Nord

Leading the wireless revolution in hearing aids

Collaboration with Apple

Innovation continues

AGENDA

Slide 13

SOLUTIONS WITH DIFFERENT TECHNOLOGIES- 2.4 GHZ TECHNOLOGY HAS OBVIOUS ADVANTAGES

Transmitter

Magnetic induction solution

Relay

Hearing aids

2.4 GHz or Bluetooth

3– 15 MHz

Transmitter

2.4 GHz technology

Hearing aids

2.4 GHz

Sound

streaming

Mobile

phone

connection

Mobile phone Relay

Hearing aids

2.4 GHz or Bluetooth

Mobile phone Relay

Hearing aids

2.4 GHz or Bluetooth

Apple

collaboration

Slide 14

• Accessibility – everybody should have full access to Apple devices regardless

of impairment

• Innovation leader – first on the market with breakthrough technology

• Building Made-for-iPhone hearing aids on 2.4 GHz technology require limited

hardware changes as Bluetooth is already in the phone

APPLE’S AMBITIONS ON HEARING AID TECHNOLOGY

Slide 15

• Secretive - also internally. Normally not all participants on a project know the

full project content in detail

• Small teams – maximum 5-10 persons – work on a specific part of the project.

Interface to other teams is handled by technical management meaning that

the individual team do not know their position in the bigger picture

• The small teams give extreme technical focus and high efficiency in each

team, but requires very clever management from the technical leadership

higher in the organization

• The small teams makes it surprisingly easy to work with Apple on the

technical level. Each team can make their own decision within their area of

responsibility and time from idea to decision is very short

APPLE’S WAY OF WORKING

Slide 16

GN RESOUND MADE-FOR-IPHONE HEARING AIDS WERE

LAUNCHED EARLY 2014

Slide 17

• The world’s first Made for iPhone

hearing aid with direct stereo sound

streaming

• Taking Surround Sound by

ReSound™ to an unprecedented

level with new premium audiological

features

• Powered by SmartRange™ – the new

chip with 3rd generation 2.4 GHz

wireless technology

• GN ReSound’s smallest wireless

Receiver-In-the-Ear ever

”SAY HELLO TO THE WORLD’S SMARTEST HEARING AID”- BREAKTHROUGH TECHNOLOGY IN THE HEARING AID INDUSTRY

ReSound LiNXTM

THE RESOUND LINX APP- MODERN AND INTUITIVE DESIGN FOR A BEST IN CLASS USER EXPERIENCE

Simple and intuitive start-

menu to adjust the sound

Adjust the sound of the

television as well as the

surroundings

Simple and intuitive

program menu for choosing

settings

Use the Iphone’s GPS to

find missing hearing aid

Slide 19

RESOUND LINX MEDIA ATTENTION- ACHIEVING THE IMPOSSIBLE: A HEARING AID CREATES MASSIVE USER INTEREST AND

MEDIA COVERAGE

Slide 20

NBC

CNN

FOX ABC

TV 2 DanmarkThe New York Times

CBS

RESOUND LINX AWARDS- ACCLAIMED FOR ITS DISTINCT INNOVATION

Slide 21

January - 2014

Innovations Design

and Engineering

Awards Honoree

March - 2014

Recognize the most

Innovative, adaptive &

assistive technology

March - 2014

Winner for Product

Design; recognized for

Medical Device

June – 2014

Winner in the Health &

Wellness category

June - 2014

Awards to innovative

new products serving

seniors

September - 2014

ShowStoppers

Envisioneering

Innovation & Design

Award Winner

September - 2014

IFA Gold Usability

Award Winner

September - 2014

Chosen to represent

Denmark as one of its

top innovative

companies

September - 2014

Chosen as Top 100

finalist, currently

competing for top

award

October - 2014

Awarded for its

innovative features

and its value to users

& customers

IMPACTING QUALITY OF LIFE FOR USERS

(MOVIE CLIP)

Slide 22

GN RESOUND TECHNOLOGICAL LEADERSHIP

Slide 23

1st generation

ReSound AleraDirect fitting

Direct to

accessories

Direct ear-to-ear

Direct control

Direct to iPhones

The 2.4 GHz technology development and long-term competitive edge

2nd generation

ReSound

Verso

3rd generation

ReSound

LiNX2010

2012

2014

• While perceived as being impossible, GN ReSound brought the 2.4 GHz wireless connectivity to the

market with ReSound Alera™ in 2010 – a cornerstone of GN ReSound’s turnaround

• Another breakthrough innovation was brought to the market with ReSound Verso™ featuring ear-to-ear

connectivity based on 2.4 GHz technology – today still exclusively offered by GN ReSound

• ReSound LiNX took the technology to the next level with direct connectivity to iPhones

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Q&A

Slide 24