Photo: Sonos
Most business advisors would say that it is a bad idea to enter a new market with the hope of competing with the industry leaders, but for top-end wireless speaker maker Sonos Inc., they are getting ready to do just that.
With sales dipping in the home speaker sector as of late, Sonos has decided that now is the time to try and make a splash in the headphone marketplace. They did this by unveiling the Sonos Ace yesterday. The wireless over-ear headphones are now available to pre-order for $449, with a launch date slated for June 5.
The California-based company is one of the leading manufacturers in the wireless speaker space, and now it is looking to use this notoriety to establish itself as one of the leading headphone makers too. And, with the headphone industry in the United States being almost 50% bigger than that of the speaker market and totaling over $2 billion last year, it’s easy to see why.
Breaking into the headphone sphere won’t be an easy task though, not by any measure. With well-established brands like Sony, Bose, and Apple already dominating the space, Sonos certainly has its work cut out for it if it wants to compete with these juggernauts.
Sonos can take some encouragement for Apple’s recent success, as the tech giant also initially struggled when it first launched its AirPods Max. The product was criticized in the beginning for its bulky appearance and hefty price tag but has since gone on to massive success, with sales increasing by more than 40% last year.
Another encouragement for Sonos is that this won’t be the first time it has gone head-to-head with such big household names. In 2016, sales of Sonos speakers were impacted by the release of Google and Amazon’s ‘Cheap-smart speakers.’ However, the mediocre sound quality and privacy issues surrounding these speakers actually helped Sonos in the long run and it was able to bounce back in 2018, with sales increases of nearly 30% from the year before.
Apple also released its first smart speaker, ‘HomePod’, the same year. This speaker also received subpar ratings and reviews, resulting in a cheaper redesign. This further helped Sonos cement itself as a more reliable speaker brand.
Since then – post the Covid-19 pandemic sales boom – both Sonos and the speaker industry as a whole have seen a significant decrease in speaker sales. In the past 12 months, the company’s sales and revenue both decreased by 23% and 6% respectively.
With just over 5 million devices sold and a reported revenue of 1.66 billion dollars, dips in both these avenues revealed potential financial concerns for the company. Thankfully for Sonos, it is estimated that over 15 million homes now own some kind of Sonos speakers, and this brand recognition is sure to increase the sales potential of the new headphones launch.
Sonos stated that headphones are the no.1 requested item by customers and if even only 1% of these customers buy one set of headphones, it would generate an estimated $69 million in sales for the company. In its financial projections for 2024, forecasts for headphones are ambitiously set to bring in as much as $100 million.
Both ambitions and confidence are high for Sonos, as it expects high sales from its current customers early on. With recent diminished yet relatively stable share values, Sonos believes now is the right time for a headphone launch. With current sales performances tantamount to the likes of Apple and the other major players, Sonos may now even be looking to jump ahead of its competitors with this new tech move.
Photo: Sonos
Most business advisors would say that it is a bad idea to enter a new market with the hope of competing with the industry leaders, but for top-end wireless speaker maker Sonos Inc., they are getting ready to do just that.
With sales dipping in the home speaker sector as of late, Sonos has decided that now is the time to try and make a splash in the headphone marketplace. They did this by unveiling the Sonos Ace yesterday. The wireless over-ear headphones are now available to pre-order for $449, with a launch date slated for June 5.
The California-based company is one of the leading manufacturers in the wireless speaker space, and now it is looking to use this notoriety to establish itself as one of the leading headphone makers too. And, with the headphone industry in the United States being almost 50% bigger than that of the speaker market and totaling over $2 billion last year, it’s easy to see why.
Breaking into the headphone sphere won’t be an easy task though, not by any measure. With well-established brands like Sony, Bose, and Apple already dominating the space, Sonos certainly has its work cut out for it if it wants to compete with these juggernauts.
Sonos can take some encouragement for Apple’s recent success, as the tech giant also initially struggled when it first launched its AirPods Max. The product was criticized in the beginning for its bulky appearance and hefty price tag but has since gone on to massive success, with sales increasing by more than 40% last year.
Another encouragement for Sonos is that this won’t be the first time it has gone head-to-head with such big household names. In 2016, sales of Sonos speakers were impacted by the release of Google and Amazon’s ‘Cheap-smart speakers.’ However, the mediocre sound quality and privacy issues surrounding these speakers actually helped Sonos in the long run and it was able to bounce back in 2018, with sales increases of nearly 30% from the year before.
Apple also released its first smart speaker, ‘HomePod’, the same year. This speaker also received subpar ratings and reviews, resulting in a cheaper redesign. This further helped Sonos cement itself as a more reliable speaker brand.
Since then – post the Covid-19 pandemic sales boom – both Sonos and the speaker industry as a whole have seen a significant decrease in speaker sales. In the past 12 months, the company’s sales and revenue both decreased by 23% and 6% respectively.
With just over 5 million devices sold and a reported revenue of 1.66 billion dollars, dips in both these avenues revealed potential financial concerns for the company. Thankfully for Sonos, it is estimated that over 15 million homes now own some kind of Sonos speakers, and this brand recognition is sure to increase the sales potential of the new headphones launch.
Sonos stated that headphones are the no.1 requested item by customers and if even only 1% of these customers buy one set of headphones, it would generate an estimated $69 million in sales for the company. In its financial projections for 2024, forecasts for headphones are ambitiously set to bring in as much as $100 million.
Both ambitions and confidence are high for Sonos, as it expects high sales from its current customers early on. With recent diminished yet relatively stable share values, Sonos believes now is the right time for a headphone launch. With current sales performances tantamount to the likes of Apple and the other major players, Sonos may now even be looking to jump ahead of its competitors with this new tech move.