Sonos shares have tumbled 10% since their devastating patent claim loss against Google, with the stock down 46% this year, as they battle to try and restore their reputation after a judge savaged the Company and management claiming that they abused the US patent system by attempting to use it to “punish an innovator” and to “enrich a pretender” i.e. Sonos.
The question now is what unique technology does Sonos actually have in the speakers?
The problem for Sonos now is that Sonos revenues and profits are tanking, and topping this off their revenue didn’t grow at all in the last year.
In fact, it fell 7.6% and now they face two major tech giants Google and Amazon coming after their market share with superior technology.
They are also struggling in 2023 especially in the Asia Pacific market and the loss of a potential A$50 million plus settlement, from Google and the estimated $10M cost of their own legal actions in taking on Google is set to impact the business who has already slashed headcount and costs during the past few months.
The business has struggled to make a profit ever since the business was launched with Google moving extremely quickly to now take the business on.
The last thing that Sonos expected was for Judge William Alsup to rule in Google’s favour, throwing out an initial US$32.5 million verdict against the tech giant.
“This was a case of the industry leading with something new and, only then, an inventor (Sonos) coming out of the woodwork to say that he had come up with the idea first.
The fight between Google and Sonos has been ongoing for some time.
In 2006, Sonos applied for a patent on zone scenes.
They initially filed a provisional application followed by a non-provisional application a year later in 2007. This patent application filed in 2007 was then followed by a series of “continuation applications” that lasted for the next ten years.
In 2013 and later in 2014, Google met with Sonos to discuss working together on incorporating Google Play Music on Sonos systems.
In a second meeting in 2014 to discuss a new Google initiative, its Cast for Audio program, Google revealed to Sonos executives confidential details of an invention they created that would allow for customized overlapping scenes of multimedia players that could be invoked on demand.
Sonos products, at this time could not do that and wouldn’t be able to do so until 2020.
Shortly after this meeting in 2015, Google entered the wireless multiroom space with Chromecast devices.
These devices contained the ability to have overlapping scenes of multimedia players as they had shown Sonos earlier.
This was followed in 2016 with Google Home smart speaker and 2017 with Google Home Mini.
At this point, Sonos had three zone scene patents and it had not asserted any of them.
These patents did not claim overlapping zone scenes.
Ironically, all of them had been rejected by the patent examiner due to Yamaha having already been granted a patent.
Sonos kept going with small variations which the court described as “niche variations of little consequence.”
This victory for Google has allowed the company to move quickly in restoring some of the features and functionality it had previously removed from its products.
At the same time Google is looking to use their speakers to enhance the Google Home platform, with the release of script that allows those with enough tech savvy knowledge to code capability into the system.
Users of the Google Home system can now open a script editor, and describe what you want to happen using natural language.
For example, you can type something like, “If my doorbell spots someone after sunset, turn on the driveway lights and make an announcement,” or “On Thursdays, if I’m not at home, make sure the heating is off and that the security system is armed.”
The unlock key is AI that will automatically generate the necessary code that you’ll be able to copy, paste, and activate via the script editor.
You can also make adjustments and modifications quickly using the natural language option.
The ‘help me script’ is powered by a new language model tests continuously learning and improving.
This will allow for increasingly accurate and personalized scripts as it evolves.
