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Is Sonos Being Set Up For A Sale, Claims Apple Not Interested

Audio industry executives are waiting for the next move by Sonos management, with insiders tipping that the business is being set up to be sold, Apple is not interested according to sources, with questions now being asked as to whether the business is actually saleable.

Some claim that the brand is broken beyond repair, and that the latest app debacle that cost former Chief Executive Patrick Spence chief executive his job, and the business over A$161 million in revenue during the past six months is a hurdle on any potential sale and more so the possibility of Sonos ever recovering from the damage caused by poor management.

The Wall Street Journal claims that if you measure the financial hit by the company’s market capitalization, the real cost of the whole debacle was over A$800 million.

That’s roughly how much Sonos’s value has plummeted since the company unveiled what it called “our most extensive app redesign ever.”

Ironically, the business was once called “the Apple of speakers” now the Company is mired in the biggest crisis in its two-decade history.

As for competitors, Vox International has been sold and Masimo Consumer the former Sound United Company who owns Denon, Marantz and Bowers & Wilkins is still in Limbo after being hived off into a separate Company in the hope that someone will come along and buy it, so far no one has.

Today Sonos’ market valuation hovering around $1.7 billion, down from more than $5 billion during COVID when consumers wanted a new sound system while locked in their homes.

Apple has long been seen as a potential suitor, given the two companies’ similarities.

Bloomberg claims that Sonos who use to be focused on premium design, just like Apple owns nothing that Apple needs.

Apple could snap up Sonos for $2 billion or so — less than it paid for Beats — and it would only cost them a few days’ worth of revenue.

Observers claim that if Apple really wanted to build out its home audio business, it already has the hardware, software, content, and manufacturing capability.
Later this year, it will launch its own home hub with an OLED screen and a new HomePod mini.

The only things it would gain from Sonos is a user base, a collection of patents and the employees none of which Apple need.

Sonos’ software is obviously something Apple wouldn’t want, especially in its current state, and audio hardware has become heavily commoditized.

Several observers including the Wall Street Journal claim that Sonos should have never launched the new app the way it did and was aware of many bugs prior to the initial release.

It should have kept around the old and reliable S2 app and launched the new version as a beta test.

Once the revamped software became as dependable as the old app, Sonos could have moved forward with the new version as the default. Of course, that would have provided less of a splashy marketing opportunity, and this is what Patrick Spence was into over delivering a product that actually worked.

He was desperate to launch the Ace headphones, and to do so he needed a new app.

At the time of the Ace headphone launch Spence was under the microscope because of falling sales and erosion of profits.

The new app ended up being devastating to employee morale, company revenue and the brand’s reputation.

As soon as the holiday break was over in the US the board moved to sack Spence.

More than six months after the launch of the app — and even after an apology tour from its executives and a multitude of attempted fixes — the company parted ways with Chief Executive Officer Patrick Spence last week.

The next day, it also cut loose its chief product officer, who many Sonos employees blamed for the app mess and the marketing director who is believed to have told Spence to not make any comments on the disaster app was also flicked.

In their place is interim CEO Tom Conrad, a co-creator of music streaming service Pandora and former executive at Snap.

He has served on the Sonos board since 2017 and was already helping with the app recovery effort. Though the company has vowed to search the globe for a new full-time CEO, many Sonos staffers believe Conrad has the inside track to get the job done and that could be the sale of the business.



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