Sonos who generate over 55% of their revenue flogging products in IKEA stores is banking on a new range of products to lift their fortunes in 2023.
Currently Sonos management whose shares are down over 41% year to date recently confirmed that the SYMFONISK, product range at Ikea which was developed jointly by Sonos and IKEA is a key part of their business and that in 2023 the US audio business is banking on entering the cluttered headphone market next year in an effort to take on the likes of Apple Beats, Sony, Sennheiser, Bose and Bowers & Wilkins.
In their recent earnings call, Sonos CEO Patrick Spence claimed, “we will enter new naturally adjacent product categories, as you have seen us do with portables.” That move was already the natural next step for Sonos after its wireless speakers, resulting in some fantastic products like the Sonos Move. However, it’s less clear what these “naturally adjacent” product categories could with insiders telling ChannelNews that wireless noise cancelling headphones and new speakers including a new premium speaker are among the mix.
In Australia, the business has increased their direct sell operation while also generating “excellent profits” from the specialist channel where Sonos is getting higher margins due to the high price of their custom install product range.
Last year Sonos branched out from its streaming speakers with the Sonos Amp, which is being used by custom installers in Australia.
According to sources business has also been working on a content engine with some insiders speculating that Sonos could bring out a content puck similar to Apple TV.
Earlier this year, Protocol reported that Sonos was hiring for a “Home Theatre OS” project, indicating the development of a home streaming device or puck.
Additional revenue will be generated from content providers when consumers sign up for a content service via the Sonos puck that will deliver both audio and video content.
Currently Sonos is being sued by Google with Sonos facing a significant threat of import bans if Google wins its legal complaints.
Sonos has already won one round with Google in the US Courts with new court cases scheduled for next year.
In 2022 Sonos’ profits have plummeted with net income down 33%
“The macroeconomic backdrop became significantly more challenging in Fiscal 2022,” Sonos CEO Patrick Spence said in an earnings call.
The company’s net income, adjusted for one-time losses, was $64.7 million in fiscal year 2022, down from $158.6 the year before.
Spence said the big drag this year was Sonos’ fourth quarter.
Revenue decreased 12.0% from the previous year’s fourth quarter.
Net GAAP net loss grew to $64.1 million for the quarter from $8.7 million in the year before quarter.
