Apple turning AirPods into hearing aids underscores effort to crack massive health market
Apple AirPods Pro
Apple
Soon, people with AirPods in their ears might not be drowning you out — they might be wearing them to hear you better.
Apple announced on Monday that its AirPods Pro 2 headphones will become an FDA-cleared hearing aid in the coming weeks through a software update. That means that adults with mild or moderate hearing loss — about 30 million Americans, according to the Food and Drug Administration — will be able to use Apple earphones to amplify specific sounds they want to hear better.
“After you take a hearing test, your AirPods Pro are transformed into a personalized hearing aid, boosting the specific sounds you need in real time, like parts of speech, or elements within your environment,” Apple’s vice president of health, Sumbul Desai, said in the feature’s launch video.
The announcement is the latest example of Apple’s strategy to break into the health industry, a potential $15 trillion market by the year 2030, according to RBC Capital Markets. Apple CEO Tim Cook has highlighted health features as the company’s “most important contribution to mankind.”
That strategy includes developing FDA-cleared features for its wearable products and replacing what are often more expensive purpose-built medical devices. Since 2020, Apple has added a notification service for irregular heartbeats, an atrial fibrillation reader and an electrocardiogram reader to its Apple Watch, according to FDA filings.
The new feature is a free software update for some AirPods models and will be included with Apple’s $249 AirPods Pro 2.
Many over-the-counter hearing aids are much more expensive, according to buyers guides cited by the Hearing Loss Association of America, an advocacy group. While some OTC hearing aids cost as little as $99, most range from $799 into the thousands of dollars.
“What is really cool about Apple now saying their AirPods can be over-the-counter hearing aids, is we’re seeing that technology innovation at a price point and in a product that’s very mainstream,” said Barbara Kelley, executive director of the Hearing Loss Association of America.
Apple is trying to jump-start AirPods sales after a few soft years.
The company doesn’t break out AirPods stats individually, but its Wearables category declined 2% annually for the most recent quarter that sales are available. Analysts say that adding health features like a hearing aid expands the market for the device, which could help sales.
“The hearing aid piece is a very specific use case,” said Deepwater Asset Management founder Gene Munster, who estimates that AirPods account for about 5% of Apple’s total revenue. “It does open it up to a different market.”
How it works
Apple’s hearing health experience requires a pair of Apple’s AirPods Pro headphones and an iPhone.
The company has built a hearing test into its devices inside the Settings app. After the program checks to make sure the headphones fit the user’s ears correctly, it plays a series of tones over about five minutes. The user has to tap the screen when or if they hear a tone.
This creates a profile of various frequencies and volume settings that the user may have trouble hearing, which are stored in the Health app. That profile can be applied to turn the AirPods Pro into personalized hearing aids.
Apple said that the test was scientifically valid and based on data it collected from its noise detection apps and a study with 160,000 participants that started in 2019.
In a promotional video, Apple showed a mom putting in AirPods to better hear her son on her birthday.
Over the counter
Apple’s launch has been boosted by a recent regulatory change.
Previously, all hearing aids required a prescription after testing from a licensed audiologist. In 2022, the FDA opened up the market to over-the-counter hearing aids that were significantly cheaper due to the use of audio testing software or at-home fittings.
However, Apple’s AirPods won’t immediately make other hearing aids obsolete.
Among its limitations are the battery, which lasts six hours. That’s not enough for the kind of all-day wear that some OTC hearing aids can manage.
Also, the AirPods Pro are only for those with mild or moderate hearing loss, meaning people who have trouble making out speech in noisy settings. Anyone with “severe” or “profound” hearing loss still needs to see a licensed audiologist, experts said.
Additionally, Apple’s hearing aids still need FDA clearance.
Devices that use technology or software to customize hearing aid fit or settings require premarket clearance from the agency, an FDA press officer told CNBC. Apple is awaiting FDA clearance as well as clearance from regulators around the world, the company said Monday.
Bridget Dobyan, executive director of the Hearing Industries Association, said that she welcomed Apple’s entrance into the market to increase awareness of hearing health, but there are still many hearing loss situations that require a doctor-based approach.
“OTC hearing aids may be suitable for adults with mild to moderate hearing loss, but seeing a licensed hearing care professional can also help determine unique hearing health needs,” Dobyan said.
It’s not uncommon for Apple’s foray into health to draw criticism from incumbents who say the tech company’s features aren’t a replacement for actual medical devices.
For example, Joe Kiani, CEO of Masimo, a medical device company that is currently in litigation with Apple over intellectual property and trade practices, said earlier this year that the Apple Watch’s pulse oximeter feature was “masquerading” as “a reliable, medical pulse oximeter.”
After a legal victory over patents, Masimo forced Apple in January to turn off the pulse oximeter on newly sold Apple Watch devices.
Broadcom CEO Hock Tan.
Lucas Jackson | Reuters
Broadcom is scheduled to report earnings for its fiscal third quarter after the close of regular trading on Thursday.
Here’s what analysts are expecting, according to a consensus from LSEG.
- Earnings per share: $1.65
- Revenue: $15.83 billion
Broadcom, which develops custom chips for Google and other huge cloud companies and also makes networking gear needed to tie thousands of artificial intelligence chips together, is expected to report revenue growth of 21% from $13.07 billion a year ago.
Analysts project revenue growth will hold steady the rest of this year and accelerate a bit in 2026.
Broadcom has been one of the chief beneficiaries of the AI boom thanks largely to its accelerator chips, which the company calls XPUs. The processors are generally simpler and less expensive to operate than Nvidia’s graphics processing units, or GPUs, and they’re designed to run specific AI programs efficiently.
Analysts at Cantor Fitzgerald wrote in a report last week that they expect to see increased signs of demand from Google and Meta.
“Additionally, all eyes will turn towards any visibility of current AI Custom Silicon engagements converting into customers with high-volume ramps in sight,” wrote the analysts, who recommend buying the stock.
The analysts estimate that custom silicon could generate $25 billion to $30 billion in revenue for Broadcom next year and more than $40 billion by around 2027. The company generated total revenue of $51.6 billion in the latest fiscal year.
Shares of Broadcom are up 30% this year and have almost doubled in the past 12 months, lifting the company’s market cap to $1.4 trillion.
In the fiscal second quarter, AI revenue jumped 46% from a year earlier to more than $4.4 billion, with 40% from networking. CEO Hock Tan said that number should reach $5.1 billion in the third quarter, “as our hyperscale partners continue to invest.”
Some of Broadcom’s expansion has been fueled by acquisitions, most notably the purchase of server virtualization software vendor VMware for $61 billion in 2023. VMware is key to Broadcom’s infrastructure software business, which accounted for 44% of sales in the most recent quarter.
Salesforce CEO Marc Benioff attends the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 23, 2025.
Halil Sagirkaya | Anadolu | Getty Images
A bad year just got worse for Salesforce.
Following a disappointing revenue forecast in its quarterly earnings report late Wednesday, Salesforce’s stock slumped 8%, bringing its decline for 2025 to 28%. That’s the worst performance in large-cap tech.
Revenue increased 10% in the fiscal second quarter from a year earlier, cracking double-digit growth for the first time since early 2024. Sales of $10.24 billion topped the average analyst estimate of $10.14 billion, and earnings per share also exceeded expectations.
However, for the fiscal third quarter, Salesforce said revenue will be $10.24 billion to $10.29 billion, while analysts were expecting $10.29 billion, according to LSEG.
Salesforce regularly touts its investments in artificial intelligence and the advancements in its software as a service, or SaaS, but the company hasn’t been lifted by the AI boom in the same way as many of its tech peers — particularly those focused on infrastructure.
There’s also a concern on Wall Street that AI is going to eat away at much of the software sector.
“While the investor community oozes angst over the future of SaaS, the here and now from Salesforce, while impressive at scale, is not enough to reshape the narrative,” wrote analysts at KeyBanc Capital Markets, in a report on Wednesday. The analysts have a buy rating on the stock.
Salesforce is dealing with challenges selling marketing and commerce products, Robin Washington, the company’s president and chief operating and financial officer, said on a conference call with analysts.
In its earnings release, Salesforce said it closed over 12,500 total deals for Agentforce, which can automate the handling of customer service questions. That includes 6,000 paid deals. The company said that over 40% of bookings for Agentforce and its data cloud came from existing customers.
CEO Marc Benioff maintained his optimistic tone, downplaying concerns about the AI threat to software and telling analysts on the earnings call that “we are seeing one of the greatest transformations” in the space.
“To hear some of this nonsense that’s out there in social media or in other places, and people say the craziest things, but it’s not grounded in any customer truth,” Benioff said.
Salesforce kept its full-year revenue outlook but now sees higher earnings. The company is targeting $11.33 to $11.37 in adjusted earnings per share on $41.1 billion to $41.3 billion in revenue.
Figma shares plummeted nearly 20% on Thursday, falling to the lowest price since the design software vendor’s IPO in July after the company reported earnings for the first time as a public company.
Results for the second quarter were largely inline with expectations, as Figma had issued preliminary results a little over a month ago. Revenue increased 41% from a year earlier to $249.6 million, slightly topping analyst estimates of $248.8 million, according to LSEG.
Analysts at Piper Sandler described the report as “largely a non-event,” but noted that the “shares have witnessed hyper-volatility” following their 250% surge in the trading debut.
Since closing at $115.50 on its first day, the stock has lost more than half its value, lowering the company’s market cap to about $27 billion.
For the third quarter, Figma forecasted revenue of between $263 million and $265 million, which would represent about 33% growth at the middle of the range. The LSEG consensus was $256.8 million.
Figma’s IPO was significant for Silicon Valley and the tech sector broadly as it represented one of the highest-profile offerings in years and signaled Wall Street’s growing appetite for growth. The market had been in a multiyear lull that began in early 2022, when inflation was soaring and interest rates were on the rise.
Figma reported a 129% net retention rate, a reflection of expansion with existing customers. The figure was down from 132% in the first quarter.
— CNBC’s Jordan Novet contributed to this report.
WATCH: Figma shares plunge
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