Sonos Seeks New Markets: Headphones, In-Car Audio, and Battery Powered Speakers
Bloomberg reported late last week that Sonos Inc. is seeking new markets following their August IPO, targeting over the ear headphones as well as looking into the possibility of in-car audio and a battery-powered speaker, according to people familiar with the plans. Mainly focused on the headphones, these same people told Bloomberg that Sonos is expecting a target price range of $300+, as high-end pairs of headphones often do. Reportedly, the headphones will support multiple voice assistants. Bloomberg asked Laura Morarity about the headphones, however, she said that the company doesn’t comment on future product plans. This news also coincides with a recent letter from Sonos to its shareholders, where the company wrote that half of music listening occurs outside the home and suggested it will tackle that part of the market:
We plan to push our boundaries by investing resources to make the experience of Sonos outside the home a reality.
Headphones Represent a Potential for Growth
Sonos needs an opportunity for growth, and producing headphones could provide that. The company went public in August at $15 a share, however, has dropped more than 25 percent since then, now at $10.80 a share. As noted by T3, high-end headphones, which generally include active noise-canceling (ANC) and sell for over $300 a pair, make up the biggest share of the headphones market. This is because they sell more than any other kind, and sell in large quantities. As T3 reporter Duncan Bell writes, “That’s a price a lot of people can afford but is nobody’s idea of cheap. It’s the classic, Apple-style ‘affordable premium’ approach, in fact.” Sonos’ home speaker sets essentially already follow the ‘affordable premium’ model. It would make sense for a brand focused on sound quality to use ANC headphones as a way to grow.
A Crowded Market May Be Sonos’ Biggest Challenge
The headphone market is certainly growing. However, growth is often accompanied by crowding. Bose Corp., Sennheiser, Monster, Apple Inc. unit Beats, Skullcandy Inc., and more have all already made their mark in the space. Last year Report Buyer found that the global earphones and headphones market is expected to grow at a CAGR of 7.31% during 2017–2023 and cross $20 billion in revenue by 2023. More than just Sonos wants in, too, as rumors point to Apple developing their own over-ear headphones, as reported by Voicebot in November. What may allow Sonos to stand out in the crowd initially is the expected inclusion of multiple voice assistants. Granted, we are still waiting for the inclusion of Google Assistant in the Alexa-enabled Sonos One smart speaker, so there really is no telling how these supposed headphones will turn out, let alone a battery powered speaker, or in-car audio.