Thursday, February 29, 2024

Sonos is waging a war to stay relevant

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This puts Sonos in the unenviable position of battling Google in court and fighting stronger competition in the smart speaker market. Sonos didn’t have to compete in the lower end of the market to be successful, but it didn’t face such significant challenges from large competitors either.

A license agreement Earlier this week, between Sonos and digital infrastructure company Legrand could announce what Sonos hopes to accomplish with its lawsuits. Legrand is now paying the Sonos patent license for its own multi-room audio solutions. If the company succeeds in securing a similar deal from Amazon and Google, it would surely bolster Sonos’ bottom line and make it easier to compete.

“We believe in a fair market where companies compete on an equal footing and contribute with their own innovations and experiences,” Sonos chief legal officer Eddie Lazarus said in a statement earlier this week. “We are delighted to see more companies such as Legrand recognize the strength and value of our intellectual property and offer appropriate compensation. It’s not hard to read this as a message to Google and Amazon.

Considering how long a complicated legal battle can take to resolve, it will likely be months or more before we know whether Sonos can resolve its issues through a settlement or court order. Sonos has not commented on its pending litigation

In the meantime, Sonos will likely stick with its existing strategy – but if this new wave of smart speakers makes a dent in its business, a $ 100 Sonos speaker could become a reality. It wouldn’t be the first time Sonos has embraced a technology it had previously rejected. The company has published its first portable speaker with Bluetooth in 2019, an extension to part of the loudspeaker segment where it was previously not in competition.

To be clear, I don’t think Sonos is going anytime soon – the company has millions of dedicated users, and its share price has jumped for much of 2020 after hitting a low earlier in the year. But it wouldn’t surprise me to see the company diversify its offerings over the next year to better compete with cheaper offerings from Amazon, Google and Apple. If these companies can make small speakers that sound great, Sonos should be able to use its years of experience to strike back as the big players move through its territory.


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