Sonos is in a bit of a rough patch with its consumer hardware business. Demand isn’t nearly on the same level that it was a few years ago, and CEO Patrick Spence has used the word “challenging” more than once when discussing the company’s last several financial quarters. Today’s earnings, which saw revenue decrease by 5.5 percent year over year, are another example.
“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 said in Sonos’ press release.
But Spence and the Sonos team predict big things ahead in 2024. Namely, some sort of significant new product is on the roadmap for later next year that Sonos seems pretty excited about.
“This is the beginning of a multi-year product cycle where we expect to reap the rewards of our R&D investments,” Spence said. “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.”
During Sonos’ earnings call, Spence shared a few more 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 said.
Could he be talking about the long-rumored Sonos headphones? The headphone and earbud market is massive, and if Sonos is looking for a revenue driver, that’s certainly one way to get there. The mention of R&D could also mean we’re finally going to see the fruits of Sonos’ acquisition of Mayht, a startup that came up with an innovative new approach to speaker transducers to produce massive sound from small components.
Just about one year ago today, Spence announced that Sonos would be entering four new product categories over the coming years. The first one, Sonos Pro, ended up being commercially focused. It’s a subscription offering for businesses that are seeking easy control over the music played throughout their space. That kind of thing is important for Sonos’ long-term strategy, but it’s also a bit of a snooze for regular consumers like you and me. Hopefully we can count on something a little more intriguing next year. Based on Spence’s tease, I certainly am.
The timing is starting to feel right for headphones. Between LE Audio and upcoming earbuds that will use Wi-Fi to make up for Bluetooth’s weaknesses, Sonos might finally see an opening to do something unique compared to other tech players — perhaps with intelligent handoff with the company’s speakers, soundbars, and portable devices. As for new in-home audio products, I wouldn’t expect a new Sonos Arc anytime soon, but the Sonos Five is a prime candidate for a revision in the next couple years now that the company is so invested in spatial audio.
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