Sonos is in a little bit of a tough patch with its shopper {hardware} enterprise. Demand isn’t almost on the identical degree that it was a number of years in the past, and CEO Patrick Spence has used the phrase “challenging” greater than as soon as when discussing the corporate’s final a number of monetary quarters. Right now’s earnings, which noticed income lower by 5.5 % 12 months over 12 months, are one other instance.
“While it was a challenging year in the categories in which we play, the strength of the Sonos brand and product portfolio enabled us to retain a strong market share position,” Spence stated in Sonos’ press launch.
However Spence and the Sonos crew predict huge issues forward in 2024. Particularly, some form of vital new product is on the roadmap for later subsequent 12 months that Sonos appears fairly enthusiastic about.
“This is the beginning of a multi-year product cycle where we expect to reap the rewards of our R&D investments,” Spence stated. “This cycle begins with our entry into a new multi-billion dollar category in the second half of the year that will complement our current offering, delight customers and drive immediate revenue.”
Throughout Sonos’ earnings name, Spence shared a number of extra tidbits. “All told, we expect to generate over $100 million from new product introductions this year [fiscal 2024], with this exciting new product accounting for a large portion of this revenue in the second half,” he stated.
Might he be speaking in regards to the long-rumored Sonos headphones? The headphone and earbud market is huge, and if Sonos is on the lookout for a income driver, that’s definitely one strategy to get there. The point out of R&D may additionally imply we’re lastly going to see the fruits of Sonos’ acquisition of Mayht, a startup that got here up with an modern new method to speaker transducers to supply large sound from small elements.
Nearly one 12 months in the past at present, Spence introduced that Sonos can be coming into 4 new product classes over the approaching years. The primary one, Sonos Professional, ended up being commercially targeted. It’s a subscription providing for companies which can be looking for simple management over the music performed all through their area. That sort of factor is vital for Sonos’ long-term technique, nevertheless it’s additionally a little bit of a sleep for normal shoppers such as you and me. Hopefully we are able to depend on one thing somewhat extra intriguing subsequent 12 months. Based mostly on Spence’s tease, I definitely am.
The timing is beginning to really feel proper for headphones. Between LE Audio and upcoming earbuds that can use Wi-Fi to make up for Bluetooth’s weaknesses, Sonos would possibly lastly see a gap to do one thing distinctive in comparison with different tech gamers — maybe with clever handoff with the corporate’s audio system, soundbars, and moveable gadgets. As for brand new in-home audio merchandise, I wouldn’t count on a brand new Sonos Arc anytime quickly, however the Sonos 5 is a primary candidate for a revision within the subsequent couple years now that the corporate is so invested in spatial audio.