Sonos has a bit of a difficult problem with its consumer hardware business. Demand isn’t nearly at the same level it was a few years ago, and CEO Patrick Spence has used the word “challenge” more than once when discussing the company’s last several fiscal quarters. Today’s earningsWhich saw revenue decline 5.5 percent year over year, another example.
“Although it has been a challenging year in the categories we play in, the strength of the Sonos brand and product portfolio has enabled us to maintain a strong market share position,” Spence said in the Sonos press release.
But Spence and the Sonos team expect big things to come in 2024. Specifically, there’s some sort of significant new product 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 kicks off our entry into a new multi-billion dollar category in the second half of the year that will complement our existing offerings, delight customers and drive immediate revenue.”
During Sonos’ earnings call, Spence shared a few additional tidbits. “In total, we expect to generate more than $100 million from new product launches this year [fiscal 2024]With this exciting new product representing a significant portion of this revenue in the second half.
Could he be talking about the long-rumored Sonos headphones? The market for headphones and earbuds is huge, and if Sonos is looking for a revenue stream, this is definitely one way to get there. The mention of R&D could also mean we’ll finally see its fruits Sonos’ acquisition of Mayhta startup company that has come up with an innovative new approach to speaker transducers to produce massive sound from small components.
Just a year ago, Spence announced that Sonos would be entering four new product categories over the coming years. The first, the Sonos Pro, ended up being a commercial focus. It’s a subscription offering for businesses looking to easily control the music played throughout their space. This kind of thing is important to Sonos’ long-term strategy, but it’s also an afternoon nap for everyday consumers like you and me. Hopefully we can count on something more interesting next year. Judging by Spence’s quip, I certainly am.
The timing is starting to look right for headphones. Between the LE Audio and upcoming earbuds that will use Wi-Fi to make up for Bluetooth’s weaknesses, Sonos may finally see an opportunity to do something unique compared to other tech players — perhaps through smart delivery with the company’s speakers, speakers, and mobile devices. As for new home audio products, I don’t expect a new Sonos Arc to be released anytime soon, but the Sonos Five is a prime candidate for review in the next couple of years now that the company has invested so much in spatial audio.
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