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Sonos Kill Off Speaker As Play 1 Struggles, Still Unprofitable

Sonos Play 3 Speaker killed off, image shows Play 1

Sonos has moved to kill off poorly performing speakers as their voice activated Play 1 struggles up against new offerings delivering superior sound and easy voice integration.

The move comes as brands such as Bowers & Wilkins enter the networked audio market and Harman look to expand their Harman Kardon range. Also hurting Sonos sales which only grew 1% are new products from Amazon and Google that have superior voice activation capabilities.

Last week Sonos has reported a loss of US$22.8 million in its fiscal second quarter sales of their speakers were down 16% with the Company claiming that the bright news for the Company was that recently launched Beam soundbar is proving popular with a 57% jump in sales.

Beam sales increased 57% off small base.

The only problem is that the initial base was extremly small as the Beam was a new product was only launched in October 2017.

The maker of wireless speakers and home sound systems posted revenue of $210.2 million in the period, missing Street forecasts. Four analysts surveyed by Zacks expected $215.6 million.

Sonos sold $89 million worth of devices in the quarter, this was largely driven by the Beam after the Company moved to kill off speakers.

Sales of their Play 1 speaker also struggled up against superior offerings from Ultimate Ears, JBL, Amazon with their Echo and Google along with several sound brands who are now moving to release a new generation of voice activated speakers.

Sonos sold a total of 785,291 products during the quarter, which was up just 1% year-over-year.

In an effort to lift profits the Company has also slashed their marketing budgets in an effort to reduce overall costs.

Instead the Company is investing in online marketing in direct competition with their retail partners.

There was no mention of how well sales of the IKEA branded speakers are doing.

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