“If you can’t beat ‘em, join ‘em,” was once the
motto for competing with big tech’s smart speakers. The evolution of that thinking may say more about the industry than the company.
Sonos used its fiscal second-quarter results late Wednesday to also announce a new voice-control feature for its compatible speakers that will launch next month. The software processes requests on the device with no audio or transcript files sent to the cloud. It is effectively Sonos’s in-house alternative to the voice assistants provided by Google and
that also are available on some of the company’s devices. But unlike those systems, no one will be able to use the Sonos voice technology to check the weather forecast, schedule a meeting or order toilet paper.
And that is kind of the point. The first smart speaker launched by Amazon in late 2014 was initially dismissed as a gimmick but turned out to be a surprise hit—one that crimped sales of Sonos’s more-premium speaker line. But over time, Amazon’s Alexa and the Google Assistant gave rise to growing privacy worries, since those voice assistants are designed to work with the massive cloud-computing networks of their parent companies to provide an all-encompassing array of services to users. Sonos began selling speakers compatible with those voice assistants in 2017, but launched an alternative two years later without them. That was also the year the company made a small acquisition with the goal of building its own voice-control system for its speakers.
To be sure, plenty of people are still comfortable with big tech’s all-encompassing voice platforms. Market research firm Omdia estimates that Amazon and Google each sold more than 20 million units of their smart speakers in the U.S. alone last year—more than triple what Sonos sold globally for the same period.
But Sonos has been on a roll as well, with unit sales rising 13% in the 2021 calendar year despite continued component and shipping shortages. The latest feature will help Sonos appeal to those who want the benefit of voice control without big tech listening in. And it fits well with the company’s strategy of broadening its offerings while solidly maintaining its position in premium sound. The company just announced a new addition to its TV soundbar lineup at a lower price point, which could expand its market share in a category benefiting from the growing popularity of video streaming at home.
The latest offerings come as Sonos posted revenue for the March quarter that jumped 20% year over year to $399.8 million—beating Wall Street’s forecasts. Timely price increases announced late last year also have helped the company bring up its average selling price while getting ahead of inflationary pressures. Sonos shares jumped 14% Thursday morning following its latest announcement and results. In a brutal market, the premium speaker maker is striking the right chord.
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