Sonos Gets Just Smart Enough

Sonos sales are up 13% in 2021 despite continued parts and shipping shortages.


Bloomberg News

“If you can’t beat them, join them,” was once Sonos’ SONO 14.26%

competitive motto with the smart speakers of major technology companies. The development of that mindset can say more about the industry than it does about the company.

Sonos used its second-quarter financial results late Wednesday to announce a new voice control feature for compatible speakers that will launch next month. The software processes requests on the device without any audio files or recordings being sent to the cloud. This is actually Sonos’s in-house replacement for the voice assistants offered by Google and that are also available on some of the company’s devices. But unlike those systems, no one will be able to use Sonos’ voice technology to check the weather forecast, schedule meetings, or order toilet paper.

And that’s kind of a problem. The first smart speaker launched by Amazon in late 2014 was initially seen as a gimmick but turned out to be a surprise hit – a blow that sent sales of Sonos’ higher-end speaker line plummeting. . But over time, Amazon’s Alexa and Google Assistant have raised privacy concerns, as these voice assistants are designed to work with companies’ massive cloud networks. their mother to provide a variety of services to users. Sonos started selling speakers compatible with those voice assistants in 2017, but two years later launched an alternative without them. That was also the year the company made a small acquisition with the goal of building its own voice control system for its speakers.

Sure, many people are still comfortable with big tech’s comprehensive voice platforms. Market research firm Omdia estimates that Amazon and Google both sold more than 20 million units of their smart speakers in the United States alone last year — more than triple what Sonos sold globally in the past year. same period.

But Sonos is also on the upswing, with unit sales up 13% in 2021 despite continued component and delivery shortages. The latest feature should help Sonos appeal to those who want the benefits of voice control without the big tech listening. And it aligns well with the company’s strategy of expanding its offerings while firmly maintaining its position in the premium audio space. The company just announced a new addition to its TV soundbar lineup at a lower price point, which could expand its market share in a category that benefits from increasingly popular home video streaming. .

The latest offerings come as Sonos announced its March quarter revenue rose 20% year-over-year to $399.8 million – beating Wall Street forecasts. The timely price increase announced at the end of last year also helped the company raise the average selling price in the face of inflationary pressure. Shares of Sonos rose 14% Thursday morning following its latest announcement and results. In a fierce market, the premium speaker maker is hitting the right track.

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