COMMENT: Sonos Stock Down 31% So Why Invest In Trying To Take On Giants
Sonos is currently advertising for people to help them build a Sonos TV content OS, but the begging question is who will use the OS among third party TV manufacturers, and what chance do they have of going it alone in the content market.
If they do go ahead alone, they will be up against Apple TV, Amazon Prime and their Fire Stick, Roku who have just announced a major upgrade and the likes of LG’s webOS, or Google TV and Android TV.
Some analysts are now questioning whether it’s time for shareholders to sell down their stock in the US sound Company whose shares are trading above industry price multiples and are seen as being “expensive”
Currently the stock is trading at a higher price than the average price of stocks for the Consumer Durables industry.
Sonos’s share price is quite volatile, this could mean it can sink lower.
Currently they are down 25% over six months and 31% over 12.
Last month we saw Sonos launch an updated version of its Roam portable speaker at the time CEO Patrick Spence teased that the Company is “working on some really exciting stuff.”
Now it’s been revealed that a ‘Home Theatre OS” is under development.
Roles like “Principal Platform Product Manager,” “Head of Partnerships, Home Theatre,” and “UX Lead—Next Generation Home Theatre Experience” at Sonos are being advertised as the Company moves to try and grab a share of the content click revenue or services subscription market.
It appears that they are banking on their audio customers moving to a Sonos TV content system where they could access both music and movie content.
Sonos currently has its flagship Arc soundbar, the smaller Beam, the wireless Sub, and other speakers that can be added to create a full surround experience, however these are all output devices.
They want a share of the inbound content with a new “Head of Partnerships, Home Theatre” role being advertised.
Foxtel, Fetch TV and Stan are all content delivery Companies in Australia and that’s before you get to Netflix, Disney+, Paramount+, Prime Video sand in the future HBO.
Last night Roku a key content partner with Telstra who it’s claimed is looking to buy Fetch TV announced a new platform upgrade.
The content OS Company who has been around for many years is set to unleash a major platform update over the “coming weeks” called Roku OS 11
This will incorporate audio visual upgrades, personalisation features as well users will be able to flick between Standard, Dialogue, Movie, Music and Night modes by pressing the ‘*’ button on Roku remotes or in the Roku app.
Part of the move is aimed at helping users to hear better dialogue especially TV actors who mumble their way through lines.
The standout feature appears to be the new ‘automatic speech clarity’.
Roku reckons the new setting “dynamically identifies and amplifies dialogue so you don’t miss a word”.
The move to a content OS is high risk and appears to be a key factor in Sonos’s optimistic growth plans.
Currently their shares are trading above industry price multiples with analysts raising the issue of whether now is “the right time to sell?”.
On a 12 month average the stock is down 31%.