European MedTech "Hearing aid incumbents come out top in an AI-disrupted..."

Research evidence excerpt

European MedTech "Hearing aid incumbents come out top in an AI-disrupted..."

Global Research

21 May 2026ab

European MedTech Equities

Europe including UKHearing aid incumbents come out top in an AI-

disrupted world Healthcare

Kavya Deshpande

Analyst

kavya.deshpande@ubs.com

Clear structural upside to deteriorating sentiment +44-20-7567 8515

Hearing aids are increasingly viewed as the "fallen angels" of EU Medtech: once above- Graham Doyle

sector growers, now deliverers of double-digit downgrades and beset by structural Analyst

concerns around penetration and fading demographic tailwinds. In this note, we show graham.doyle@ubs.com

with detailed modelling that volume growth is indeed set to mature, but a transition +44-20-7568 2587

from the current hardware-centric industry model to AI-driven monetisation can refuel Thyra Lee

market expansion and maximise value capture for incumbents. With buyside and sellside Analyst

expectations having rebased lower in recent months, we see clear long-term upside but thyra.lee@ubs.com

remain mindful that near-term performance hinges on operational delivery. Net, we +44-20-7568 0083

retain our preference for Demant (Buy) vs. Sonova (Neutral).

AI could address structural inefficiencies and add 2-3ppt growth p.a.

The hearing aid industry is a device-centric model that exhibits two core

inefficiencies: the high price of sale increases demand volatility at limited economic

benefit to the manufacturer, and episodic hardware replacement every 4-5 years slows

the release and monetisation of R&D. We believe a shift to an AI aftermarket model in

which manufacturers sell continuous, AI-driven software improvements through the

installed base could add 2-3ppt of market growth per year. This would be sufficient to