During Sonos’ Q1 2023 earnings call, CEO Patrick Spence expressed usual optimism about his company’s financial performance, sales momentum and upcoming product roadmap. This guy really likes the word “flywheel,” folks. But he also took clear blows at Big Tech competitors, including Amazon, Google and Apple, as they’ve barely put up a fight in recent months.
With Amazon rumored to be scrutinizing its ambitions around Alexa and Echo products and Google largely focusing on all things Pixel, Spence said Sonos didn’t face serious competition during the crucial holiday quarter. “We’re going through the first quarter of the fiscal year, which is the peak of the consumer electronics and audio season and, you know, it was… we’ve seen some of the traditional players start discounting heavily and, a little bit like a traditional script. for CE which, 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’ primary smart speaker rivals launched any new audio hardware during the holiday quarter. And Apple’s second-generation HomePod arrived after it already ended. But Sonos doesn’t seem all that impressed or concerned with Apple’s resurrected $299 device. “We never want to get overconfident in these things, but you know, even seeing what’s come out recently, you know, from Apple, I couldn’t be more excited or confident about the product roadmap that we have and our ability for more and more of that $96 billion [global audio market]said Spence.
“I just 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 in our existing categories. I mean, we’ve got a lot to do,” Spence added.
Sonos has said it will release a product in the first of those new categories sometime in 2023. In the nearer term, Sonos will revitalize its high-end home audio range 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 the works, The edge has learned.
Discounts on Sonos products during the holiday season helped the company generate strong revenues and beat Wall Street expectations for its fiscal first quarter. This was the first time in three years that Sonos was able to offer those promotions; the multiroom audio leader struggled to keep its speakers and soundbars in stock during the covid pandemic, with the same supply chain issues echoing in the tech industry.
But this time the deals were back – even if some of them just returned Sonos products to their former pricing. Regardless, the company put more emphasis on bundles that increase the percentage of multi-product households. The average number of products per Sonos household is currently 2.98. Sonos sees a $5 billion revenue opportunity if it can convert customers into a multi-device lifestyle with one product.