Edison Investment Research doubtful about Sonos prospects


Analyst firm Edison Investment Research has put out a note on Sonos’ prospects in the smart-speaker market, with its devices now supporting Alexa as well as Spotify Connect. It’s not optimistic.

“By enabling both Spotify Connect and Amazon Echo, Sonos has removed the requirement for users to use its software which is a sign that it is giving up on trying to create user preference around an ecosystem,” wrote analyst Richard Windsor.

“Because Amazon Echo and Spotify Connect are keen to work with any speaker on the market, Sonos’ differentiation now becomes: audio quality and design. Multiroom functionality is now table stakes in the home speaker game.”

So what can Sonos do to stay competitive? “Sonos’ only chance is to either invest in cool new hardware features and stay ahead of its competition to maintain its price premium or go for volume and gain scale advantages by significantly outselling its rivals,” claimed Windsor.

“Both of these will be extremely difficult to achieve as much bigger and stronger rivals are all investing in producing great audio quality in a small package and the market is rapidly fragmenting given the low barriers to entry.”

Sonos would argue that its ’Switzerland’ approach of supporting multiple voice assistants just as it supports multiple streaming services will be one of its killer apps. But let’s see how that strategy plays out: with Apple’s HomePod delayed to 2018 amid claims that it’s been a difficult project internally, perhaps we’re due a return of the speculation that Sonos might be a good acquisition for that company.

Stuart Dredge

Read More: News
Leave a Reply

(All fields required)