Yes, I agree that the decision to go with single hose regulators by the major manufacturers was a business decision, i.e. motivated by profit more than by product innovation. And it is true that at the time, the single hose regs solved the position-sensitivity issue, which I'm sure was seen by many divers as a significant improvement. The regs were cheaper to build and more popular for the expanding recreational dive market. You can't blame them for going in that direction.
But this thread is about regulator performance innovation, not about what makes the most money for manufacturers.
In the 1970’s the primary reason for discontinuing the double hose (specifically the Royal Aqua Master) was not the breathing performance. As a matter of fact , the RAM had a strong reputation of being a better performance regulator than most of the single hose regulators at the time.
Part of the explanation could have been that the single hose regulators (US Divers Calypso or Conshelf, Scubapro Mk-5, Poseidon Cyklon, et.) did not come out of the box tuned to the level that we have come to expect or have achieved now-a-days. The expectations have changed a bit through the years.
The RAM does not require the same level of fine tuning to perform and we were all using plain backpacks which places the DH in a good position.
The RAM was at the time venerable as a better performer, but it required more maintenance (due to the rubber parts), it required re-tooling to add HP and LP ports, it was bigger and occupied more space in a dive bag, and probably most important: it was not slick looking like the newer single hose regulators.
Actually, IMO, the lack of an HP port to attach a pressure gauge was probably the “kiss of death” for the RAM. At least it was at for us at Divers Service Center where I worked. The delicate appearance of the big hoses (even if they weren’t that delicate) was also a big factor.
After production of DH regulator stopped, the supply of specialized rubber parts (specially the duckbill) dried up and many DH regulator were not serviced or kept in operation, but many owners did go out of their way to find or make parts.
When designing the new DH regulator, I intentionally decided to study lessons learned (from both DH and single hose regulators) and to try to resolve the major issues and improve anything that was reasonable (under the budget of essentially a hobby).
We have design tools and prototyping tools that were not even dreamed of in the 1970’s. Even as an individual I have access to computer, instrumentation, and prototyping tools that Gagnan, Spirotechnique, US Divers, or Scubapro couldn’t even dream of having back then. And I have samples of their designs (and some documentation) to use as background knowledge to build upon.
Aqualung obviously has many more resources that than I or VDH has, but they don’t have the interest and I am OK with that. The “new Mistral" was basically a "bad-design" and all it did was set back the acceptance of new DH concept.
For many reasons (breathing performance not necessarily being one of them) the DH will probably always be a specialized market. I keep comparing it to driving a stick-shift versus driving an automatic transmission vehicle. A very small population (me included) drive a stick-shift in the US anymore. It is just “too much trouble” and it requires skills that many drivers don’t want to learn. I think it is a lot more fun, but that is just me.
BTW, to the OP, I still have a concept in my mind on how to add a “muffler” to the exhaust bubbles and a way of dispersing them a bit. The trade-off may be the size which may make it less appealing, but I will be looking into it.
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