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Sonos Chases Growth New Q4 Audi Deal, Pocketing 46%+ Margin

Sonos who this week launched a $279 baby speaker in competition with JBL and Ultimate Ears is looking to book over $3.6 Billion in revenue by 2024, they have not said what percentage they expect to generate from their entry level products.

Recently the Company announced a partnership with car maker Audi who currently sell audio from Bose and Bang & Olufsen. The Sonos brand will be restricted to the Audi Q4 e-tron with Sonos CEO Patrick Spence claiming that they would like other automotive brands to consider their audio offering.

Currently the Company is only generating $1.69 billion, however they are tipping $1.95 Billion in the current 2021 fiscal year. This is a Company that has struggled for years to make a profit.

And if you thought Sonos product was expensive your right with the Company stacking on gross margins of 45% to 47% across their entire product offering.

The Company is also looking to take on the Apple AirPods Max over-the-ear headphones, the only problem is that the bulk of Sonos customers are Apple iPhone or PC owners and research shows that they will go with an integrated Apple product because of brand loyalty to Apple over Sonos.
The new Sonos Roam speaker announced today is $60 more expensive in Australia than in the USA.

The Company is claiming that their product is in 11 million homes at the end of fiscal 2020 with the Company actively targeting customers to buy online Vs buying a Sonos product via a retail store. The only problem is that the Sonos online pricing is the same as a retail store with the US business pocketing the margin, they would normally pay a local retailer.

Currently the Company is targeting 500,000 paid subscribers for its in-house radio streaming service and aims for 100 million product users which is seen as a big ask as competitors including Apple are releasing superior audio products to Sonos.



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