Sonos Actions Questioned, CEO Set To Face US House Questioning As Shares Slump
Sonos CEO Patrick Spence who is struggling to hold onto market share due to pressure from sales of superior speakers from Google and Amazon is set to try and discredit Google in when he fronts a US Democrat controlled House Antitrust subcommittee.
Spence last week Spence used the same week that CES 2020 was taking place to announce that he is now suing Google claiming that they have stolen Sonos technology. This is the same Company that tried to sue Sound United the makers of HEOS networked sound system only to pull their action weeks out from the Company floating the Company in the USA.
Since the announcement to sue Google was made and following CES 23020 where several brands revealed superior sound systems to Sonos that allow the playback of HD sound and 24bit Music Sonos shares have slumped.
After a lengthy litigation process, Sonos and Sound United have agreed to an undisclosed settlement, ending all current legal entanglements. At the time Sonos conducted a deliberate leaks campaign with their favourite media including the New York Times.
In Australia Sonos tried to black ban ChannelNews when we revealed a new Sonos product ahead of the launch of the product. At the time Sonos PR claimed that “we had spoilt the launch of the product in Australia”.
We pointed out that we are in the “News business” not the “PR Spin” business which the Company has a reputation for.
On Friday (Saturday Australian time) Spence, suing Google for infringing on five of its patents, will try and make a case that both Google and Amazon, which sell rival speakers powered by their voice-activated assistants, competed unfairly.
Sonos who had no competition from Google and Amazon for 8 years after launching the Sonos product in 2005 failed to make a profit selling their proprietary speakers in this period despite having the market to themselves.
Their prior CEO John MacFarlane announced his resignation as the head of Sonos months out from the float of the Company. Previously he told media such as ChannelNews that Sonos was “profitable” float documents painted a very different picture.
Now organisations such as Bloomberg are claiming that they have “scepticism about an antitrust argument”.
Sonos is part a group of companies that are now having to cede market share to big tech companies such as Google and Amazon as well the likes of Sound United who are now manufacturing superior products to Sonos.
Both Google and Amazon sell in a month what Sonos sells in speakers in a year and this is hurting the Company.
Bloomberg claims that Sonos is now trying to put up “Varying degrees of valiant resistance to the inexorable migration of their basic ideas and markets into the bundle of linked services offered by Alphabet’s Google, Amazon.com., Apple Inc., Facebook Inc., Microsoft, and other large technology platforms as well as specialist sound Companies who are now delivering HD Audio and 24Bit speakers.
The problems for Sonos came when Amazon introduced the Echo, a relatively inexpensive and easily networked speaker offering music and other stuff that could be summoned with basic voice commands.
Suddenly Sonos, with a clunky app that seemed to require frequent updates and separate devices like the Sonos Bridge, was unnecessary.
Millions of customers worldwide including thousands in Australia opted, for voice-triggered speakers.
Amazon has become the top seller of home speakers in the world.
Bloomberg claims that Sonos responded by trying to integrate both Amazon’s Alexa and the Google Assistant into its products, but this was a dubious strategy, introducing an intermediary into their relationship with their users. As the Verge points out, Sonos acquired its own voice assistant only recently, five years after Alexa’s debut, but doesn’t plan to make a competing general-purpose voice product.
As for Google they entered the speaker market with Google Home in late 2016 almost ten years after Sonos was launched and years after brands such as Harman Kardon, Bose, Sony and Denon Heos and Bluesound had rolled out competing speakers.
The big question now is how has Google and Amazon engaged in anti-competitive practices? especially as Amazon is selling most of the Sonos range on their web sites worldwide alongside their own speakers.
What Google and Amazon have that Sonos don’t have is deep resources, technical depth and capacity as well manufacturing clout with both Amazon and Google able to buy components and assembly at significantly cheaper prices.
Sonos Australia have not said how their Australian sales went over the recent holiday period nor have they commented on the Companies latest woes.