During Sonos’ Q1 2023 earnings call, CEO Patrick Spence expressed the usual optimism about his company’s financial performance, sales momentum and the upcoming product roadmap. This man really loves the word “flyer”, folks. But he also took clear blows at Big Tech’s competitors, including Amazon, Google and Apple, for barely putting up a fight in recent months.
With Amazon rumored to be taking a hard look at its ambitions around Alexa and Echo products and Google focusing heavily on all things Pixel, Spence said Sonos didn’t face serious competition during the crucial holiday quarter. “We’ve been through the fiscal first quarter, which is the height of audio and consumer electronics season and, you know, it was… we’ve seen some of the traditional players do deep discounts and, like a playbook traditional for CE that, you know, we’ve always fought against and don’t really believe in,” he said. “And then, you know, the big tech players, we just haven’t seen them active and we haven’t seen them, you know, doing anything interesting.”
“The big tech players, we just haven’t seen them active.”
None of Sonos’s main smart speaker rivals released any new audio hardware during the holiday quarter. And Apple’s second-generation HomePod arrived after it was already over. But Sonos doesn’t seem all that impressed or concerned with Apple’s resurrected $299 device. “We never want to get too confident in these things, but even looking at what has come out of Apple recently, I couldn’t be more excited or confident about the product roadmap that we have and our ability to take more and more of that $96 billion.” [global audio market]Spence said.
“I feel like there are others who are probably questioning their investments in this area, and we’re investing in four new categories. We are going to raise the bar on our existing categories. I mean, we have a lot going on,” Spence added.
Sonos has said it will launch a product in the first of those new categories sometime in 2023. In the near term, Sonos will reinvigorate its high-end home audio lineup with new speakers, including the Era 300 and Era 100. Both are designed to showcase spatial audio and Dolby Atmos. A second-generation Sonos Move portable speaker is also in development, the edge has learned.
Holiday discounts on Sonos products helped the company post strong earnings and beat Wall Street expectations for the fiscal first quarter. This was the first time Sonos was able to offer such promotions in three years; The multiroom audio leader has struggled to keep its speakers and soundbars in stock during the Covid pandemic, facing the same supply chain issues that have reverberated throughout the tech industry.
But the deals are back this time, even if some of them simply put Sonos products back at their previous price. Either way, the company placed greater emphasis on bundles that increase its percentage of multi-product customer households. The average number of products for each Sonos household is currently 2.98. Sonos sees a $5 billion revenue opportunity if it can successfully convert customers from a single product to the multi-device lifestyle.
