Apple HomePod competitor Sonos lays off 96 employees ahead of expected IPO

Posted:
in General Discussion edited May 2018
Wireless speaker manufacturer Sonos on Thursday revealed plans to cut 96 employees from its workforce in a bid to boost profitability, a move that comes just ahead of an expected initial public offering said to be valued in the billions.

Sonos One


The eliminations whittle down Sonos' workforce of approximately 1,500 employees by some six percent and will impact multiple departments within the company, Bloomberg reports.

"Like any healthy business, we occasionally make adjustments to the size and structure of our teams to stay nimble and align resources with market opportunities," Sonos said in a prepared statement. "Sonos is growing and profitable."

Details of the job cuts or the planned reorganization's timeline were not made available to press.

Word of the eliminations arrives on the eve of an anticipated IPO that, according to The Wall Street Journal, could come as soon as June or July.

In April, it was reported that the company confidentially filed for an IPO with the Securities and Exchange Commission and held an analyst meeting at its offices in Santa Barbara, Calif. Citing people familiar with the matter, the WSJ said Sonos is targeting a market value of $2.5 billion to $3 billion, a sum that would result in a capital infusion of several hundred millions of dollars.

Sonos, a leader in the connected home speaker market, is facing increased competition from smart speaker makers like Amazon, Google and, most recently, Apple. When former CEO and company founder John MacFarlane resigned early last year, he admitted to turning a deaf ear to the threat the up and coming technology might pose to his company.

Speaking specifically about Amazon's Echo, which enjoys a commanding lead in the smart speaker space, MacFarlane said he was dismissive of the device's intrinsic benefits. Unlike Sonos' more traditional app-based streaming setup, smart speakers feature native audio playback controlled by a user's voice.

"I fell into that trap where I've been watching voice recognition for years," he said at the time. "I tried Echo in the beginning and wrote it off. I had too many distractions at that time. I wasn't playing at the level I should have been playing at in all frankness."

Sonos released its first smart speaker, the Sonos One, in December with support for Amazon's Alexa voice assistant. With premium internals -- and a premium price tag of $199 -- the speaker is often compared to Apple's HomePod, a $349 device loaded with advanced audio technology and Siri smarts.

It seems Sonos' efforts to break into the space have yet to be rewarded, as fresh statistics from market research firm Strategy Analytics show the company failed to end the first quarter as a top-five smart speaker vendor. As expected, Amazon led the pack with 4 million Echo units shipped, followed by Google and Alibaba. Apple placed fourth with around 600,000 HomePods sold, a respectable feat considering the device went up for sale in February.

Today's announced job cuts follow a round of layoffs performed two years ago. At the time, Sonos said it would shift focus toward streaming music services and voice control systems.



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Comments

  • Reply 1 of 46
    SpamSandwichSpamSandwich Posts: 31,518member
    “We’re growing and profitable” doesn’t quite match up with ‘here are your pink slips’.
    chopdogleavingthebiggbrian greenmejsricStrangeDaysbonobob
  • Reply 2 of 46
    claire1claire1 Posts: 510unconfirmed, member
    Now THIS is a proper comparison. Not HomePod vs. some cheap spy machine with sound quality as a last thought.
    chopdogmejsricchasmwatto_cobra
  • Reply 3 of 46
    chopdogchopdog Posts: 10member
    As a very big Sonos user and fan, I do question some of their decisions - to launch Playbase without updating Playbar - and then releasing AirPlay 2 for one and not the other. No Airplay 2 on some of their speakers still being sold as current models.

    Updating their apps, throwing all that as good out, and then spending a year clawing back usability.

    But grumbles aside, the speakers ARE great and completely changed how we listen to music in our house - the diversity and the 'shared' nature. Airport Express units just never cut the mustard. Sonos's management are responsive (which is unusual in this day and age). They seem to have some interesting products in the pipeline, and I do not want a listening speaker. I was a music system. I am sure there are enough people out there who don't want a spy in their kitchen who are interested in music....

    So let's hope it's just normal pre-IPO trimming, and they are getting fit for a major boost in investment and growth. We have new speakers to buy later this year!! Hopefully Play 3 Gen 2!
  • Reply 4 of 46
    matrix077matrix077 Posts: 793member
    Used to consider Sonos system for my house but I just don’t like to play music from 3rd party app. Now there’s HomePod there’s just no point anymore. Maybe one or two small ones once they’re AirPlay 2 compatible for small rooms but that’s it. 
    edited May 2018 StrangeDayswatto_cobra
  • Reply 5 of 46
    kkqd1337kkqd1337 Posts: 222member
    My sonos speakers are fantastic. They are so robust, and have never failed me in years.

    I hope sonos continue to make high quality speakers and don’t get drawn too far into the smart speaker world. I like that my echo can control my sonos but I don’t want them to be a combined product like the Sonos One, and I see sonos speakers used in commercial environments now and I can’t imahine they want voice activated speakers there.
  • Reply 6 of 46
    macxpressmacxpress Posts: 5,001member

    I'm seeing a pattern with every single new Apple release. Apple releases something, the same people put it down as crap, overpriced, doesn't work, doesn't do anything something else already does, etc, etc and it will fail (or its already failed). They give it a month or two, maybe six, continue to push how much of a failure it is. About a year goes by, Apple keeps improving the product with software updates and it starts to sell and push others out of the market. Two, three years down the road, some of the major players are now struggling if not out of existence. A new Apple product is announced in the mean time and the cycle starts all over again for that product.

    Maybe I'm just failing to see the point, but this is a cycle that I've experienced a few times:

    -iPod-Certain Macs (Depends on the category/audience)

    -iPhone

    -iPad

    -iCloud

    -Apple Watch

    -HomePod

    I'm sure I'm missing some.

    Does HomePod need work? Of course it does. I think everyone knows that, including Apple. Some are just too impatient and give Apple no more than 6 months before they start calling something a failure.

    I think there's a strategy with these products. People at Apple don't just sit in an office and say, we need to make a speaker. They have an idea of yes, we could make a speaker. Then I think they start planning from there and its not just planning of 6 months out...its planning of sometimes several years out. It takes time to get a product to market from design, production, to sale. It also takes time to get the strategy out...it can be years before its complete. Just look at iPhone! People just didn't sit in an office and say where gonna make a phone!

    dewmeStrangeDaysgregg thurmanwatto_cobra
  • Reply 7 of 46
    monstrositymonstrosity Posts: 2,230member
    Loved my sonos system until they recently redesigned the apps UI. 
    watto_cobra
  • Reply 8 of 46
    gatorguygatorguy Posts: 21,305member
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.
    muthuk_vanalingam
  • Reply 9 of 46
    lerxtlerxt Posts: 185member
    Thats swung me into buying a Home Pod over the Sonos. Cynical and selfish Sonos. 
    watto_cobra
  • Reply 10 of 46
    ericthehalfbeeericthehalfbee Posts: 4,107member
    Sonos lays off 6% of their workforce.

    HomePod apparently captured 6% of the market last quarter.

    Anyone else find this funny?
    chasmwatto_cobra
  • Reply 11 of 46
    polymniapolymnia Posts: 942member
    There is another story today that paints Sonos in a better light, with Onkyo (which owns several popular brands of AVRs) rumored to add native Sonos capability to their devices. Probably at their event interestingly a couple days after WWDC. 

    https://www.theverge.com/circuitbreaker/2018/5/16/17362208/onkyo-receiver-sonos-app-integra-pioneer-elite

    Not sure how many existing owners will opt to peruse a more elaborate Sonos system based on a firmware update, but it does put what amounts to a free demo unit in millions of living rooms. 

    But hey, let’s go with a story about a small round of layoffs. 
  • Reply 12 of 46
    ericthehalfbeeericthehalfbee Posts: 4,107member
    gatorguy said:
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.

    Up to your usual tricks. Trying to confine a HomePod to the category of “smart speaker” so you can claim there are many competitors.

    Name any speaker that adjusts to your room like the HomePod. And no, I don’t mean lame-ass adjustments that only involve EQ (like Sonos or Home Max). I mean speakers that can adjust bass in real-time using a dedicated feedback microphone to precisely control driver excursion. Or speakers that can make adjustments in the time domain (phase). Or any speaker (even just one) that can accurately locate its position in a room. Then you’ll have found a HomePod competitor. 
    StrangeDayswatto_cobra
  • Reply 13 of 46
    tmaytmay Posts: 3,984member
    gatorguy said:
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.
    I would use "user base" rather than "fan base" but the context comes out much different than what you intended.
    StrangeDayswatto_cobra
  • Reply 14 of 46
    tmaytmay Posts: 3,984member
    gatorguy said:
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.

    Up to your usual tricks. Trying to confine a HomePod to the category of “smart speaker” so you can claim there are many competitors.

    Name any speaker that adjusts to your room like the HomePod. And no, I don’t mean lame-ass adjustments that only involve EQ (like Sonos or Home Max). I mean speakers that can adjust bass in real-time using a dedicated feedback microphone to precisely control driver excursion. Or speakers that can make adjustments in the time domain (phase). Or any speaker (even just one) that can accurately locate its position in a room. Then you’ll have found a HomePod competitor. 
    In essence, Apple dropped the most sophisticated wireless speaker on the market in its price class, which is almost universally panned for its poor "smart speaker" performance, is tested and found wanting in a number of "unbiased listener tests", and yet, the revenue based on the numbers appears to match the revenues, more or less, for Sonos' entire product line.

    Looking at revenues for the HomePod in the neighborhood of $800 m for the year, and would note that is on its first attempt at a speaker in many, many, years.

    Pretty sure that describes disruption.
    lkruppwatto_cobra
  • Reply 15 of 46
    jimh2jimh2 Posts: 185member
    I feel for the fired employees who have done their time working hard on the SONOS products only to be crapped on just prior to the IPO. Hopefully any share awards/options they were granted will stay with them. I do think they, like Spotify, are a slow sinking ship. My prediction is Spotify's stock will be near worthless a year from now as Apple is on the fast track to pass them in paid subscriptions.
    minisu1980christopher126watto_cobra
  • Reply 16 of 46
    minisu1980minisu1980 Posts: 131member
    macxpress said:

    I'm seeing a pattern with every single new Apple release. Apple releases something, the same people put it down as crap, overpriced, doesn't work, doesn't do anything something else already does, etc, etc and it will fail (or its already failed). They give it a month or two, maybe six, continue to push how much of a failure it is. About a year goes by, Apple keeps improving the product with software updates and it starts to sell and push others out of the market. Two, three years down the road, some of the major players are now struggling if not out of existence. A new Apple product is announced in the mean time and the cycle starts all over again for that product.

    Maybe I'm just failing to see the point, but this is a cycle that I've experienced a few times:

    -iPod-Certain Macs (Depends on the category/audience)

    -iPhone

    -iPad

    -iCloud

    -Apple Watch

    -HomePod

    I'm sure I'm missing some.

    Does HomePod need work? Of course it does. I think everyone knows that, including Apple. Some are just too impatient and give Apple no more than 6 months before they start calling something a failure.

    I think there's a strategy with these products. People at Apple don't just sit in an office and say, we need to make a speaker. They have an idea of yes, we could make a speaker. Then I think they start planning from there and its not just planning of 6 months out...its planning of sometimes several years out. It takes time to get a product to market from design, production, to sale. It also takes time to get the strategy out...it can be years before its complete. Just look at iPhone! People just didn't sit in an office and say where gonna make a phone!

    Yeah, one could almost make a nice supplementary income stream shorting the market leaders in spaces Apple chooses to enter with hardware. Worked on AppleWatch shorting FIT. I believe Spotify will start a downward decline once Apple takes the lead position in paid subscriptions. It's harder to say who is the market leader in reference to HomePod since it spans several distinct categories, but I'll likely short Sonos once they IPO as well. 
    watto_cobra
  • Reply 17 of 46
    StrangeDaysStrangeDays Posts: 8,820member
    tmay said:
    gatorguy said:
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.
    I would use "user base" rather than "fan base" but the context comes out much different than what you intended.
    Yeah I noticed the same. “But it’s a cult!” and "Mindless Sheeple fans!" is the subtext here. 
    edited May 2018 watto_cobra
  • Reply 18 of 46
    Sonos lays off 6% of their workforce.

    HomePod apparently captured 6% of the market last quarter.

    Anyone else find this funny?
    Not funny (for those laid off) but telling. It would seem that the HomePod’s only true competition is Sonos and vice versa.
    watto_cobra
  • Reply 19 of 46
    minisu1980minisu1980 Posts: 131member
    jimh2 said:
    I feel for the fired employees who have done their time working hard on the SONOS products only to be crapped on just prior to the IPO. Hopefully any share awards/options they were granted will stay with them. I do think they, like Spotify, are a slow sinking ship. My prediction is Spotify's stock will be near worthless a year from now as Apple is on the fast track to pass them in paid subscriptions.
    I am betting on this as well, I think that vast majority of the stocks current value is tied to Wall Streets love of market share. No one has cared much about the "free user" shackle that attached to Spotify's ankle and the cash it is burning to subsidize this because they are the market leader in number of users. Once the paid subscriptions crown is taken from them, then more focus will be placed on how they plan to further monetize their free user base. They don't have a viable plan for this other than convincing them to switch to a paid subscription. I think most of the potential user base who would ever pay a subscription have already switched, those that are left will never pay and will just serve to drag the company down to the shadowy depths.
    edited May 2018 watto_cobra
  • Reply 20 of 46
    lkrupplkrupp Posts: 7,477member
    tmay said:
    gatorguy said:
    So many smart speakers out there now and many more to come over the next few months. With some of them from the long-time audio companies like B&O and Bose and Sony and Pioneer and Sonos and JBL, there's no shortage of very good to great small speakers with assistant capabilities. Options like truly portable 360 sound smart speakers (ie JBL, Bose, Ultimate Ears and others) put them in a space where they aren't even competing directly with the must-be-plugged-in HomePod. 

    Apple will of course be successful with the HomePod (who has their kind of fanbase?) but with a single non-portable relatively high-priced speaker that has zero usefulness to an otherwise non-Apple owner they certainly have marketplace limits.
    I would use "user base" rather than "fan base" but the context comes out much different than what you intended.
    Yeah I noticed the same. “But it’s a cult!” and "Mindless Sheeple fans!" is the subtext here. 
    He’s crafty that in that way. Just another take on the “only stupid people buy Apple products” meme. Trolls have given up on the “doomed to bankruptcy” narrative. Too much egg on their faces. Now it’s the “Apple will succeed but only because stupid people buy their junk” backhanded slap in the face. Troll evolution and innovation at it’s finest. Somebody should write a book.
    StrangeDaystmaywatto_cobra
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