Speakers

Wake up, Sonos! Gold Dealer Schools CEO John MacFarlane on ‘Staying Relevant’

Mat Lindstedt of Silicon Valley Installation Co. sells a ton of Sonos, but urges CEO MacFarlane to stay relevant vis-a-vis Amazon Echo and other innovations. Where are outdoor audio systems, $99 speakers, and better streaming solutions?

Wake up, Sonos! Gold Dealer Schools CEO John MacFarlane on ‘Staying Relevant’
Sonos was a pioneer in the wireless audio business, but Amazon Echo has taken a dent out of its market share and Sonos needs to innovate to stay relevant. A dealer tells Sonos CEO John MacFarlane how to do that.

Julie Jacobson · March 17, 2016

After years of strong performance in wireless speakers -- a category that Sonos pioneered -- the compay has seen its massive market share eroded by innovative new solutions like Amazon Echo. CEO John MacFarlane said as much in a recent interview with Billboard magazine.

He said an Uber driver asked him when Echo would be able to control Sonos.

And that's when it hit him: "I came back and said we just need to step into this because we're tone deaf if we don't."

That was a mere two weeks ago!

In a blog about the recent layoffs at Sonos, MacFarlane again referred to Echo and its Alexa voice-recognition engine as an impetus for Sonos to regroup and innovate.

He wrote: "Alexa/Echo is the first product to really showcase the power of voice control in the home. Its popularity with consumers will accelerate innovation across the entire industry. What is novel today will become standard tomorrow."

Think about that: "What is novel today will become standard tomorrow."

Sonos perhaps has overlooked the "novel" these past years of coasting on the company's past success. It's done a nice job of iimproving current products and slowly -- very slowly -- rounding out its product line with a soundbar and a subwoofer and some mighty fine software called Trueplay that lets users calibrate their speaker for any given room.

Let's take a look at that nice new room-calibration software, released with Sonos's nice new Play:5 speaker last September. Sonos already had a Play:5 in its speaker line. Why wouldn't it call the new speaker Play:6 or some such thing? If the poor choice of model names was deliberate, then it represented extremely poor judgment. If it was an oversight (Oops, we already had a Play:5), then ...

In yesterday's CE Pro email newsletter, I wrote in reference to the Sonos layoffs:

Sonos has enjoyed a long and profitable run as the giant in wireless audio. It did this by rarely straying from its roots as a provider of good and simple audio with a pleasant user experience. The company has shunned integration, dismissed fancy bells and whistles and ignored the "next big thing," while raking in the revenues with a small slate of products. Innovation for Sonos has occurred in baby steps and the company seems to have taken few technological risks over the years. Relative newcomers like Amazon Echo (Sonos CEO John MacFarlane admits), have meanwhile clobbered the one-time giant, which recently laid off 50 employees. Has the giant been too conservative in its growth? Yes, I believe it has. 

Sonos Gold Dealer Responds

In response to that editor's note, integrator Mat Lindstedt, owner of Silicon Valley Installation Company in San Jose, Calif., responded with a copy of the letter he had just dispatched to MacFarlane. With his permission, we share the letter below (with a few minor proofreading edits):

Mr John MacFarlane,

I have been a user and seller of Sonos equipment for over 10 years and I have been selling and using Sonos equipment with great passion since day one. As a matter of fact, I think there are three great consumer electronics in the past decade; iPhone, Sonos and TIVO. I use all three religiously--and feel that these three products have changed everything in my business model.

I am a Gold dealer with over $XXXk in yearly Sonos sales--and Sonos accounts for 25% of my total hardware sales.

Some random thoughts and suggestions on how to stay relevant (and a little venting):

Sonos Connect should be priced at $249. Connect Amp $349.

There should be a $99 Sonos wireless speaker. Get the impulse buyer on board.

I no longer sell dedicated surround sound amps with separate speakers. My business model is Playbar, Sub and Connect Amp to rear speakers. It works very well.  

The Sonos app is great, but people want more. My clients are telling me they want a way to stream content from their smart phone to Sonos without having to download the app. I agree with them.

As a Gold dealer there is absolutely no incentive for me to sell more product from Sonos. The only perk is that I get my name on the Sonos Website, from which I have never received a lead.

Where is the outdoor Sonos speaker?

The Play 5 is a great speaker, and for some reason I have not sold any. 

Enable the Play 5 to be Left, Right, Center--the same as a Playbar -- and I will sell many.

Amazon Echo is a huge game changer for the industry. It's a toy now, but it does enough to create excitement, and Sonos should be worried.

Sonos has a much bigger brand recognition now than it did five years ago. Most of my potential clients have heard Sonos before I bring it up.

Sonos is big enough now to create their own streaming service.

Pandora is the killer app music service for Sonos.

I routinely have Sonos systems with 25 zones or more. I turn off the built in Wi-Fi in Sonos--otherwise the system would die on the vine. Please work with dealers like me to overcome the STP issues.

I still have my ZP120 running in my office that I bought back in 2005. It still runs like a champ and takes software updates just like any current Sonos product. Bravo! Bravo! 

Sonos has been a huge asset to the home-technology channel in the past, and we hope new innovations will continue to make them successful in this business.



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  About the Author

Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at julie.jacobson@emeraldexpo.com

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  Article Topics


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Comments

Posted by dbendell on March 25, 2016

Julie, no follow up article on Sonos? Two major breaking stories in a week, I thought for sure we would see a one on one interview with Julie and John? Where is the reporting?

Posted by matlindstedt on March 20, 2016

As the gold dealer in the note to the CEO of Sonos, I can tell you that we do not “daisy chain” the Sonos units….and most clients are very happy with Sonos in the long run. Its one of the few consumer electronics that we sell, that 10 years later, not only works the same as it did when we installed it, but it has also enjoyed a decade of rich upgrades.

As for Sonos being a “low endgo to”. The experience that we deliver to the client is what is most important and hence, the most profitable.

There was a time when we would sell speakers, wire and a multi room amplification/keypad system and we sold that system for thousands of dollars per room..and guess what? in three years that great system was now obsolete, or worse the company has gone out of business.

With a Sonos multi zone audio system, we can still sell it for thousands per zone and we have happy customers because, if history repeats itself, our clients will have many years of satisfaction. How many of you have had poor reliability or bad tech support with Sonos?

As for lower prices and a $99 wireless speaker. This in an non-issue for us. How many of us actually sell a Play 1? Not many, and even if we do, its a super fast add on that we can install in seconds.  My point was Sonos needs to re-think selling a small box with audio-outs for $349 when a Google Chrome Cast can do something similar for $29. Is it the same? Hardly, but for the first time in Sonos history there are now choices.

Sonos is one of those unique companies that cater to both the consumer end-user and the custom channel. With out the mass appeal of the consumer level, Sonos will fade away when much less expensive technology comes down the pipe.

Mat Lindstedt

Posted by mbaty on March 20, 2016

@cybermanor I think insteon makes a keypad now..

This gold dealer seems like a guy who went all in on Sonos and is now running out of features to sell, please don’t make $99 speakers.

I’d imagine the Echo is mostly eating away at the Play:1’s market share. HomeKit integration would be a nice first go at voice control. Smaller Connects would be welcome as well.

 

Posted by cybermanor on March 20, 2016

I would also love to see a physical keypad on the wall - even just a software based solution that works with the Lutron keypads we already put on the wall - a la the Autonomic/Lutron solution.

Posted by dbendell on March 20, 2016

3rd party API and Outdoor Speakers are certainly the Sonos downfall, next is voice activation.

Julie, if CEO John MacFarlane does not offer a followup to these articles or comments then his character and his company will show its true colors.

Posted by tgundo2003 on March 20, 2016

Never sell dedicated surround amp? 25 Zones of Sonos??? That’s called lowering the bar. I’ve followed up on those installs, the client is not happy in the long run. Hopefully you’re not the guy who daisy chains all the Sonos pieces in the rack together with each other for network connections, that’s a classic one too. Then you want to take a low margin product and ask to make it cheaper? Why bother being in the business at all? 25 zones at maybe $100 profit per zone, maybe your charging plenty for install (though I doubt that).

Sonos has its place, but it doesn’t replace a large scale proper multi-room audio or a proper dedicated surround system. How’s Dolby Atmos on Sonos by the way?

Posted by Joshuaad on March 19, 2016

Sonos Outdoor speaker is a Connect Amp and specialized outdoor speakers… I’d like to be able to Airplay or Bluetooth connect to my Sonos products directly from a device when it is more convenient or it is the only thing available… That’s important… Play 5’s as LCR’s for sure… Hi Res music capability is good too, but does it matter with the current line of speakers and amps?... So good in principle… make you API’s available to control products as well as HomeKit, Echo, etc….

Posted by Joshuaad on March 19, 2016

Sonos Outdoor speaker is a Connect Amp and specialized outdoor speakers.

Posted by mralarm000 on March 18, 2016

Outdoor Speaker, Outdoor Speaker, Outdoor Speaker….. even Heos has something portable and wireless with a battery.
Outdoor Speaker, Outdoor Speaker, Outdoor Speaker…..
Outdoor Speaker, Outdoor Speaker, Outdoor Speaker…..

Posted by madawg on March 18, 2016

Wow - How soon the shine can wear off of a go-to line. Low profit line, but still a go-to line.
The staying relevant statement is and always has been the marching credo of the CE industry. Always will be. A better way to say it: “Innovate or Die”.

Unfortunately, creating a $99 speaker is not innovative. Neither is reducing the price of current models. Both of those thoughts will do nothing but continue to have Sonos in a retraction mode.

Sonos must now leap-frog the new competitors beyond the “single point, wireless speaker business”. As the category reaches 10 years in life, it should / is going to be on the down turn. Or the competitive pressure for lower price points to gain a new level of consumer.

Innovate or Die, and death normally comes very quickly.

 

View all comments.

Posted by tyreed on March 18, 2016

Love the image. Now that is how Photoshop should be used!!

Posted by Julie Jacobson on March 18, 2016

Just a girl and Microsoft Word and the “remove background” command.

Posted by Nuz1 on March 18, 2016

Sonos needs to add playback of hi-rez files to its products.  Their competition already has: Bluesound, the DTS Play-fi players…  About the time either of these efforts come out with a soundbar and wireless sub, I think Sonos will really lose sales.

Posted by jdwiesch on March 18, 2016

Maybe Sonos should start licensing the UI and software like DTS Play-fi.  Sonos is the best user interface of any streaming product on the market by a fair margin.  I would be happy to see that Sonos was a native program inside of a new receiver, etc.  Sonos has survived solely because of the quality of the experience.  It has not been because of the lack of margin, the lack of integration capability or networking challenges.  In fact selling Sonos for the last ten years has been a difficult proposition.  We all had to create workarounds, and break apart our cleanly contained multi-room audio and integration systems to accomodate Sonos….but we did it, because it was the best experience that we were able bring to our clients.  I would hate to see them suffer because of the low end of the market and chasing $99 toys.  Anybody can make a wifi speaker.  It’s the UI that is their golden goose.

Posted by madawg on March 18, 2016

Wow - How soon the shine can wear off of a go-to line. Low profit line, but still a go-to line.
The staying relevant statement is and always has been the marching credo of the CE industry. Always will be. A better way to say it: “Innovate or Die”.

Unfortunately, creating a $99 speaker is not innovative. Neither is reducing the price of current models. Both of those thoughts will do nothing but continue to have Sonos in a retraction mode.

Sonos must now leap-frog the new competitors beyond the “single point, wireless speaker business”. As the category reaches 10 years in life, it should / is going to be on the down turn. Or the competitive pressure for lower price points to gain a new level of consumer.

Innovate or Die, and death normally comes very quickly.

 

Posted by mralarm000 on March 18, 2016

Outdoor Speaker, Outdoor Speaker, Outdoor Speaker….. even Heos has something portable and wireless with a battery.
Outdoor Speaker, Outdoor Speaker, Outdoor Speaker…..
Outdoor Speaker, Outdoor Speaker, Outdoor Speaker…..

Posted by Joshuaad on March 19, 2016

Sonos Outdoor speaker is a Connect Amp and specialized outdoor speakers.

Posted by Joshuaad on March 19, 2016

Sonos Outdoor speaker is a Connect Amp and specialized outdoor speakers… I’d like to be able to Airplay or Bluetooth connect to my Sonos products directly from a device when it is more convenient or it is the only thing available… That’s important… Play 5’s as LCR’s for sure… Hi Res music capability is good too, but does it matter with the current line of speakers and amps?... So good in principle… make you API’s available to control products as well as HomeKit, Echo, etc….

Posted by tgundo2003 on March 20, 2016

Never sell dedicated surround amp? 25 Zones of Sonos??? That’s called lowering the bar. I’ve followed up on those installs, the client is not happy in the long run. Hopefully you’re not the guy who daisy chains all the Sonos pieces in the rack together with each other for network connections, that’s a classic one too. Then you want to take a low margin product and ask to make it cheaper? Why bother being in the business at all? 25 zones at maybe $100 profit per zone, maybe your charging plenty for install (though I doubt that).

Sonos has its place, but it doesn’t replace a large scale proper multi-room audio or a proper dedicated surround system. How’s Dolby Atmos on Sonos by the way?

Posted by dbendell on March 20, 2016

3rd party API and Outdoor Speakers are certainly the Sonos downfall, next is voice activation.

Julie, if CEO John MacFarlane does not offer a followup to these articles or comments then his character and his company will show its true colors.

View all comments.