If you’re a Sonos fan who expects the company to release a small, cheap wireless speaker to rival the Amazon Echo Dot (4th gen), it sounds like you’ll be disappointed.
Sonos CEO Patrick Spence recently conducted an interview with Time (opens in new tab)in which he talked about some of the mistakes he’s seen during his career, and he talked about the potential of a budget Sonos speaker…or rather the lack of potential, shall we say.
Spence told Time: “When Amazon and Google came up with small $25 speakers, there was a faction within Sonos that said, ‘We can build a $25 speaker better than these companies.’ I said, ‘That’s exactly what we’re not going to do because I’ve seen this movie before.’”
The movie Spence refers to is the one he saw at RIM, the maker of the BlackBerry, where he worked during the launch of the iPhone. When asked about the BlackBerry Storm, the company’s attempt to create a touchscreen rival to the iPhone, Spence said, “In hindsight, RIM should have built the next best BlackBerry and not an answer to the iPhone. With the Storm, we threw away a decade of customer loyalty and much of our reputation for great products. It made me paranoid about how Sonos should respond to competitive threats.”
Spence points out that Sonos has responded to the launch of smart speakers, but by joining them rather than beating them: “We’ve taken advantage of the services they provide, like offering their voice assistants on a very innovative Sonos speaker that can support multiple wizards”.
He also says, “We don’t respond by directly competing with these companies and betraying everything we do.” So he clearly feels strong on that point, with language like that.
Opinion: Sonos is right to avoid this race to the bottom
One of the smartest things Spence says here is that he describes the Echo Dot and Google Nest Mini as being $25 speakers, even though the official price in both cases is $50. purchase at full price – they are discounted so often that your real the price is from $25 to $30.
And the reason Amazon and Google sell them so cheaply is that hardware is only part of the equation for these companies. They can cash in on smart assistants’ usage data, and both companies have music streaming services that you can pay for if you have your speakers. Hardware is a means to an end.
Sonos doesn’t have these other ways to make money from its products – Spence made a point of mentioning privacy in the Time interview: “We improve privacy and speed. Instead of sending all your data to the cloud, we focus on running Sonos voice assistant locally in your home. That’s how we respect what our customers want.”
So if Sonos made a $25 speaker, it must be profitable and sustainable at $25. That’s not the case with Amazon and Google. Sonos would be getting into a fight it can’t really win if it tried to fight them, because if it really threatened the Dot and Nest Mini, its price would drop even further.
You can get some of the best Bluetooth speakers for such a low price because they have less complicated technology than these Wi-Fi connected speakers. But we’ve already seen, in the case of Sonos Roam, that Sonos isn’t even interested in making Bluetooth speakers simple and cheap, let alone trying to do it with Wi-Fi too. I think it’s good that she’s sticking to her guns as a company and is choosing her own direction, not being blown away by much bigger, richer, less focused companies.