Situation: Sonos entered the stock exchange and may "leave the room"

    California-based startup Sonos, which develops and sells wireless audio systems and smart speakers, went to the US NASDAQ on August 2, 2018. At the end of the first day of trading, the company's capitalization was estimated at $ 1.95 billion and for now there is reason to believe that Sonos has more chances for long-term success than other consumer electronics manufacturers who conducted the first public offering of shares in recent years.

    Not least because the company is preparing in advance to go beyond its “comfort zone” - to start production of audio equipment not only for the home.

    Our microformat - Telemania channel "Audiomania"

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    The effect of a public offering of shares

    Sonos, specializing in compact home audio systems and smart speakers with speech recognition technology, raised $ 208 million during its IPO, valuing $ 15 per share. However, over the next three weeks her quotes rose and mostly stay in the corridor of $ 17.0–19.5, which gives reason to discuss possible prospects.

    The company knows how to earn: following the results of the previous fiscal year, it reported about $ 14.2 million of net loss with a gross income of $ 992.5 million, which is more than acceptable for a relatively young player who invests in R & D and market expansion.

    The proceeds from the placement of securities on the stock exchange, Sonos plans to put on something to competewith Apple and Amazon for influencing audio space in user homes. And she has something to oppose.

    What is the power of sonos

    Founded in 2002, Sonos is working with the creation of multi-room audio systems. Among its competitive advantages is the relatively high quality of acoustics for its price category , ease of installation and layout of system elements, support for many services of online streaming audio, including Apple Music , Pandora and Spotify, through a single application.

    For most of their history, Californians released audio devices that were technologically innovative, but were designed to perform a traditional function — playing music. However, they recently entered a new market for smart speakers.

    Released in 2017, Sonos One is able to serve as a station for communication with Amazon Amazon, and since July 2018 the company's latest devices, including Sonos One, Sonos Beam and Play: 5 second generation, are able to work also with Siri (if the owner of the speaker has from Apple gadgets with AirPlay support 2). Promise in Sonos and support for Google Assistant.

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    Among other things, the heads of Sonos are focusingto the fact that they abandoned the concept of planned obsolescence and still purposefully support all the devices that have been introduced to the market. Such concern for consumers appeals to consumers themselves and at the same time raises questions from investors. For example, if a business will not undermine the long life cycle of a product. However, top managers of the company still have something to counteract these doubts: in 27% of the houses where Sonos products are used, they bought at least four of its devices, and in 61% more than one.

    Sonos is proud of its software platform, which, among other things, provides support for modern technologies with old gadgets. For example, the company recently implemented compatibility of its newest solutions with the Apple AirPlay 2 system, which makes it possible to stream audio tomulti-room acoustics . And even if there are speakers in the home audio complex, released by Sonos as much as 13 years ago, when there was no mention of the first AirPlay, they will work in a single “ensemble” with more modern “weasels”.

    Why all this Sonos and the buyer

    On the one hand, Sonos jumped on the train in time, gaining speed: according to Morgan Stanley, by 2022 more than 70% of US households will have at least one “smart” speaker, and the US Consumer Technology Association reported that in 2018 almost half of adult Americans was going to get such a gadget.

    On the other hand, the company will have to convince both investors and buyers that its products for working with voice assistants are better than those offered by IT giants such as Apple and Amazon. It is important that it becomes dependent on those players with whom it still manages to cooperate, as it steps into their territory.

    Of course, the same Amazon and Google at the early stage of development of digital assistants, it is reasonable to increase the audience coverage of these services, including through someone else's hardware base. However, over time, they may want to control the “hardware” on which their voice assistants work, and in the literal and figurative sense, “refuse from home” Sonos, which will undermine the stability of its business.

    In 2010, not one company in the field of mass consumer electronics experienced a sharp rise, followed by stagnation or even collapse.

    Fitbit, which specializes in wearable sports devices and valued at $ 4.1 billion in IPO, is losing the industry. The manufacturer of fitness trackers Jawbone, though not trading on the stock exchange, had a solid investment history and was valued at $ 3.2 billion - some three years before the bankruptcy that followed in 2017.

    Obviously aware of these risks, Sonos is going to build a larger ecosystem. So, product director Nick Millington (Nick Millington), being extremely cautious in the wording, hints that she plans to bring the user experience that her products give to outside the house. Whether it will let out wireless earphones, whether will make acoustics for operation out of premises or something other, is not specified yet.

    However, a company with unique engineering developments and a clear long-term strategy often has another way - to be absorbed by a strategic investor. This is also possible in the mass audio segment. In 2014, Apple bought Beats, a manufacturer of headphones and portable speakers, for $ 3 billion, which is about one and a half times the amount Sonos is rated at today.

    Photo PxHere / PD

    It seems that Sonos cherishes the intention to become an “industry-forming” player. All of its previous solutions: such as: organizing flexible wireless interaction between speakers in an audio system, aggregating a multitude of online streaming services on its platform, and partnering with the creators of the most popular digital assistants, were designed to create something like “sound” in the home space. Internet.

    Perhaps, if the company manages to realize its strategy and survives under the pressure of IT giants, then in seven to ten years, millions of families will be involved around the clock in the Sonos ecosystem.

    “Smart” speakers, headsets, headphones , conference calling systems will collect and process user preferences in private, business and public, wherever a person is.

    His desire to have highly integrated audio systems at hand can lead to the fact that he will be “at hand” with Sonos, for which the musical part of her business may be, above all, a way to securely gain a foothold in the lives of clients.

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