Sonos is a fascinating company. In the 20 years since its inception, the company has carved an enviable niche for itself with its multi-room audio service.
In fact, it’s hard to imagine any other consumer technology company having such an impact on the market. From TVs to headphones and laptops to gaming consoles, few companies dominate their spaces like Sonos.
I don’t want the company to say that not Competitors have – I’ve written extensively about my admiration for Bluesound gear, and Bose has been in this space for some time – it’s just that they don’t see eye to eye.
For example, Bluesound doesn’t do quite the same thing, as its focus is more on the audiophile community. Second, while many of us could name a competitor to, say, Microsoft Windows, far fewer would do the same for Sonos.
The more I thought about it, the more I’ve come to the conclusion that Sonos’ biggest competitors aren’t companies in its precise niche (that’s multi-room wireless audio devices).
Rather, the biggest threat to Sonos comes from the tech giants that make voice-activated speakers.
In 2021 alone, 186 million smart speakers were shipped. Their growth has been spectacular, reaching 6.5 million in 2016.
Why are these numbers important? Well, a key selling point of the most popular smart speakers – Amazon’s Echo and Google’s Nest range – is how damn affordable these things are.
Currently, you can pick up an Amazon Echo or Google Nest Audio for around $100. If that seems a bit too sharp for you, you can also pick up the smaller Echo Dot or Nest Mini for $50.
Sonos, on the other hand, has always been a premium brand. Many of its “mid-range” devices sell for around $400.
If it had stuck to this strategy, the company would have to lose its market position. But it didn’t. And its latest hardware shows how cleverly it has responded to the threat posed by the tech giants’ smart speakers.
Expanding the Sonos sales funnel
The company’s newest product is the Sonos Ray, a soundbar that retails for $279.
In a context, the company’s other soundbars — the Beam and Arc — cost $449 and $899, respectively.
This is no coincidence. It’s also not a one-time decision to try to ship more products. No, this is part of a deliberate strategy by Sonos to compete with tech giants and widen its sales funnel.
It’s no coincidence that a year after sales of smart speakers more than doubled (31.7 million in 2017 to 85.8 million in 2018), Sonos launched its first truly affordable piece of hardware: the SYMFONISK -Collection in collaboration with IKEA.
The bookshelf version of it cost $99 – half the price of the company’s previous cheapest speaker.
Shortly after, the company also released the One SL. Again, at $179, this was the most affordable speaker Sonos has made in-house.
The next step in the company’s evolution to combat the smart speaker threat posed by the tech giants was the launch of the Sonos Roam, its first portable Bluetooth speaker.
Start low and go high
When it launched, I wrote about how smart a business move was with the $169 Sonos Roam.
To put it succinctly, the device is a self-contained unit good enough to plug into everyone Find a portable speaker.
In other words, the Roam acts as an easy entry point into Sonos’ funnel.
You can buy it without committing to an entire system. But if you end up liking it? Well, it’s not a big leap to decide to stock your home with more Sonos devices. I mean why would not Buying something to complement a speaker you already own?
This strategy must pay off for Sonos.
Not only has the company announced it will be releasing three more colors of the Roam (that’s Olive, Wave and Sunset, if you’re interested), but we can see that the launch of the Sonos Ray mentioned above reflects that strategy.
Sonos dangles a carrot in front of people and hopes they get a taste.
The entry-level soundbar can be viewed through a similar lens to the Roam: built-in TV speakers are notoriously poor quality, and a soundbar is an easy way to improve on that.
This means the Ray offers people a high-quality, affordable option that can operate as a standalone unit.
But Sonos has even more tricks up its sleeve. Suppose a user likes the Ray. They enjoy the richer sound they get compared to their TV and they want more. Well, then they can buy a set of Sonos One speakers and easily add surround sound to their entertainment setup.
What’s happening here is that Sonos is dangling an entry-level carrot in front of people, hoping they’ll get a taste.
Additionally, Sonos uses its audio hardware design experience to outperform its competitors. I have no doubt that Google and Amazon are capable of developing soundbars and subwoofers, but with the amount of other pies they have in the oven, that’s probably not a priority.
Sonos is more nimble and operates in a niche market. can make these projects a reality. And use it to attract people who expect more from their audio setup than a smart speaker that can tell you the weather.
Strike against the tech giants
If you need more confirmation that Sonos sees even Amazon and Google smart speakers as its biggest threat, you only have to look at the announcement of its proprietary voice assistant: Sonos Voice Control.
The company has thus decoupled itself from Alexa and Google Home.
By having its own assistant for controlling devices, Sonos can offer a faster and smoother experience – while removing the thorn that its biggest competitors are literally built into their own devices.
We’ll have to wait and see if Sonos Voice Control (launching June 1 in the US) offers the same – or even better – experience as the more mature voice assistants, but Sonos’ intent is clear: it’s not giving up its market Position without an almighty struggle.
With the release of its latest products, Sonos has underscored its ability to think long-term. Rather than sticking to a strategy of only making expensive audio equipment, the company recognized a growing threat to its market position and adapted.
Quiet and controlled, Sonos has not only offered people high-quality alternatives to popular products, but in doing so has opened up its hardware to a whole new segment of people — many of whom will dive headfirst into the company’s ecosystem after this first taste.
Dominating a niche in the modern tech world isn’t easy, and it shows how damn smart Sonos is to have pulled it off. Will it continue? It’s impossible to say, but if Sonos keeps playing with such skill, I wouldn’t bet against it.