In what is seen as ‘not a surprise move’ struggling US audio Company Sonos, has stalled the roll out of their new $749 headphones claiming they have hit a ‘software snag’.
However, insiders are claiming that the business whose sales in Australia are down over 30% are more concerned over the market conditions for a $749 pair of headphones from a Company who has failed to impress consumers with their move into soundbars.
One observer said, “Right now the market is not there for a $700+ pair of headphones especially from a Company that has no track record in the headphone market”.
Project Duke has been under development for some time, with Sonos management punting on headphones to turn around the Company’s fortunes.
Currently Sonos is selling more cheap speakers under the SYMFONISK brand at Ikea than they are in mainstream CE retailers.
Locally Sonos sales declined to $US28.6 million from $35.57 million in the last quarter.
Globally Sono’s speaker sales fell from US$539.1M to just $503M a fall of over $36M.
Sales via their custom installer dealers fell from $114M to just $84M, this is despite Sonos launching new in ceiling speakers in the last quarter.
In what appears to be a deliberate leak Sonos claim that their current headphone problem, is tied to how the wireless over-ear headphones connect to Wi-Fi networks.
The new headphone is tipped for June 2024 however several premium headphone brands claim that Sonos “will struggle to get ranging especially in specialist retailers as Sonos sells direct. Retailers will only place limited orders and if Sonos wants to get traction they are going to have to spend on marketing. The next problem is that they have no pedigree in the headphone market and where do they sit alongside Bose and Sony or up with the likes of Bowers & Wilkins” said one industry executive.
The headphones are being manufactured in China by Luxshare Precision Industry Company with the Company claiming that validation testing, or PVT identified the problem with Wi Fi connectivity.
Their sales targets are between 650,000 and 1 million units over the next year despite headphone brands struggling due to inflation issues impacting the market.
Bloomberg claims that Chief Executive Officer Patrick Spence is betting that the headphones can help reignite growth at the company after sales stagnated in recent years.
Their comeback plan involves getting into a number of new categories a move that has failed in the past with a move into soundbar not delivering the growth they expected.
It also means going up against big rivals, including Apple, Sony, Bowers & Wilkins and Bose.
Brands such Sennheiser have been losing share since they were acquired.
In 2023 shares in the business plunged 43% year to date and following the headphone announcement their shares are up 12.65%.
Sonos plans to sell the device in black and white options — similar to the colour choices on its current products.
The headphones are designed to work with existing Sono’s devices, including smart speakers, and stream audio directly from TVs and various music services.
ChannelNews understands that the business is also contemplating getting into the PartyBox market dominated by archrival Harman whose JBL brand has over 80% of this market.
The move into headphones is seen as a massive test for CEO Spence, who took the helm in 2017.
The market has said that they plan to bring on “new retailers” in markets such as Australia to sell their headphones.
As part of the launch Sonos is planning a revamped mobile app codenamed Passport. That will allow users to set up and control Sono’s products outside of the home.
This app has also faced software-engineering challenges with no firm date set for a launch in Australia.
The business is also working on a television set-top box, which will compete with Hubbl as well as new TV sound bars, and an upgraded portable speaker and new amplifiers.
Like a lot of Sonos projects their Set Top Box has been delayed with industry executives questioning “Why”.
