Sonos Shares Tumble, As Apple Readies HomePod 2 Competitor
With Apple tipped to announce a new HomePod speaker, the notion of the big iPhone Company buying Sonos appears to have evaporated with the US sound Companies share value falling another 2.24% last week.
Today Sonos shares are trading at $13.12 after falling mid last week to $12.42, when the rumour emerged the share value of Sonos surged to almost $18.
Of concern to retailers is a move by Sonos to expand their sell direct model cutting out retail sales. Retailers are also concerned that once they have sold a Sonos product Sonos marketing is then approaching those customers with discounts, to buy direct as opposed to a local retailer.
The new threat to Sonos is that Apple is set to launch new AirPods Studio and a new HomePod 2 in October, alongside a new iPad Air and four new iPhone models – one of which will presumably be the iPhone 12.
Last week Sonos was spruiking a move into the headphone market after registering a headphone patent.
Rumours about a pair of Sonos headphones have been circling for a while now, first emerging in early 2019.
According to a report from Bloomberg, the headphones will likely have multiple virtual assistants that would function similarly to the company’s Sonos Arc and Sonos One speakers, and would focus on competing with Sony, Apple, Bose and Sennheiser by offering high-end audio performance.
Harman’s popular Citation range of wireless speakers has been upgraded recently to include a new portable smart speaker; the Harman Kardon Citation 200 which combines Wi-Fi and Bluetooth connectivity.
The Harman product is expected in Australian next year.
According to analysts, shares of the smart-speaker Company are falling because of concerns about supply shortages and their ability to compete up against new competition from the likes of Apple, Google and Amazon and several Companies who have superior 24bit networked speakers.
Sonos had US$28.2m of debt in June 2020, down from US$39.8m, one year before. However, it does have US$329.1m in cash offsetting this, leading to net cash of US$300.9m.
Sonos had liabilities of US$257.7m falling due within a year, and liabilities of US$125.7m due beyond that.
Currently Sonos who have always struggled to make a profit, has more cash than debt, with analysts claiming that ultimately the future profitability of the business will decide if Sonos can strengthen its balance sheet over time.
In their latest filings Sonos lost money on earnings before interest and tax (EBIT) level with the Company delivering no clear path to profitability. Sonos net profit margin as of June 30, 2020 is -5.32% with operating margins, gross margins and net margins all trending downwards during the past three years.