CE Pro BEST Product Awards | CE Pro BEST Project Awards
Speakers

Sonos Sheds Staff, Regroups to Take on Amazon Echo

Amid wide-ranging layoffs, Sonos CEO John MacFarlane admits Amazon Echo is hurting Sonos's wireless audio business.

Sonos Sheds Staff, Regroups to Take on Amazon Echo
Amazon Echo defeats Sonos in the latest bout.

Jordan O'Brien · March 16, 2016

Sonos is a force to be reckoned with in the industry, but it seems that some of the latest releases from the likes of Amazon and a changing music industry is enough to put a dent in its armour.

Unfortunately, the competitive landscape has meant that Sonos has had to make the tough decision to lay off a number of employees, the first time it has done so since the 2008 financial crisis. That’s despite the company still remaining profitable.

It made the difficult decision to do that in order to double down its focus on certain areas of its business. This means Sonos is about to target the music streaming industry heavily and it is even contemplating adding voice control to its speakers – likely to combat the growing dominance of Amazon’s Echo.

Sonos’ CEO John MacFarlane announced the lay-offs in a post on the company’s blog, emphasizing that anyone leaving the company had been “important” in getting it to the current stage it is now and that they will continue to be looked after.

The CEO admitted that the company had been partially blind-sided by the rise of music streaming however. In fact, in its first 10 years Sonos has predominantly focused on music lovers who had ripped their collections and wanted to stream those collections to multiple rooms – now the company is instead going to focus on customers who use music streaming services.

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

Apple Music, Spotify, Napster, Google Play Music, Rhapsody and many others are already available on Sonos, but the company is not stopping there. In fact, MacFarlane states that the path forward for the music industry is “crystal clear”.

Noticing that change in the industry users should expect to see a drastically different Sonos in years to come. MacFarlane says: “We’re doubling down on our long-held conviction that streaming music is the dominant form of consumption now and in the future.”

Due to the drastic change in strategy, the company made the difficult decision to lay off staff to not only bring on new people who can enhance Sonos’ knowledge in this sector, but also to heavily invest resources in streaming music.

The second focus for Sonos in the future is voice recognition. While it’s clear that Sonos wants to take on the Amazon Echo, MacFarlane praises the Amazon team for their work on Alexa claiming that the voice assistant will impact “how we navigate music, weather, and many, many other things.”

Despite that MacFarlane adds that the Sonos team is exploring “how best to bring voice-enabled music experiences into the home”. He did not however rule out using Amazon’s Alexa API in the future.

So what caused this sudden change in strategy? Well in the US the market has seen a considerable slow down since the launch of the Amazon Echo. MacFarlane himself admits in an interview with Billboard that everything non-Echo shrank slightly year-over-year in calendar Q4 last year.

Sonos is not afraid of its change in strategy however, the company is still growing year-on-year and it hopes that by investing significant resources in these two new developments that it can continue the growth.

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



We're Looking for Your BEST Projects

Don’t miss your chance to enter to win a 2019 BEST Projects Award. We’ll be announcing winners at a special Gala event at CEDIA EXPO. We can’t wait to see what you’ve been up to this year! Enter your projects now.




  About the Author

Jordan covers all things install for Essential Install, Commercial Integrator Europe and CE Pro Europe. Have a suggestion or a topic you want to read more about? Email Jordan at jordan@allthingsmedialtd.com

Follow Jordan on social media:

Jordan also participates in these groups:
LinkedIn · Google+

View Jordan O'Brien's complete profile.



  Article Topics


Speakers · News · Products · Amazon · Echo · Sonos · All Topics
CE Pro Magazine

Read More Articles Like This… With A Free Subscription

CE Pro magazine is the resource you need to keep up-to-date on the latest products, techniques, designs and business practices. Subscribe today!

Subscribe Today!

Comments

Posted by mike atlcontrol.com on March 17, 2016

I will somewhat reiterate what the few previous CI dealers have stated, with one minor deviation. Sonos has always been focused on the one-off DIY guy, in the hopes (as well-placed and on-point, as they may be) that those customers will organically grow/expand their systems leading to more sales. In their narrow focus of that end-user audience, they have not created a strong relationship in the CI market in so far as that being a two-way street. Sonos does not view the CI as a viable channel, and that has been made perfectly clear by their actions and the sheer arrogance of their sales team.
The opening up of their API is not the bone of contention everyone wants to make it out to be. It’s more the lack of a cooperative nature with third-party partners, which they will adamantly deny, that could have allowed us to incorporate their system into an existing, or new, home automation system.
So, I am not touched emotionally that they are struggling to regain their former glory. They’re still on the wrong track. And saying that streaming is the future of music is a half-truth.
There will always be opportunities that they will miss because THEY STILL DON’T GET IT!!

Posted by Jeff D on March 17, 2016

I’m fairly safe, since I can’t imagine any of my clients talking to their AV equipment.

Posted by zhifi on March 17, 2016

Couldn’t agree more. I’ve told Sonos higher-ups that the CI world would sell tons of their their product if they opened up their API and developed a multi channel rack amp. When you model your client base on the diy end user, you’re eventually going to confront billion dollar conglomerates trying to swallow up your industry. Sonos has told us they’re working on opening up their API to the CI channel but it’s still a waiting game; as more and more Autonomics, Fusion Research, Heos and the like are being integrated. No idea what they were afraid of. Lutron understands perfectly how to cater to the masses and the CI world.

Posted by dbendell on March 16, 2016

To John MacFarlane,
You kinda a deserve it. Don’t get me wrong, I/we love your products. You make us money as dealers. But, you guys have sat behind the fence, hiding your third party API’s, making it difficult in dollars for every manufacture to reverse engineer your products for automation. Then you guys change something and we all scramble for weeks to make it work again. In the meantime, multiple vendors are starting to fill this void. You could have owned this market space and you chose to ignore it. You chose to keep high cost in engineering, limited drivers on those that succeeded, while us dealers learned to sell other items that could quickly get someone Pandora and rest on their automation platform easier.

The day you realize this, is the day your dollars start coming back to you. Hurry cause we are not waiting any longer than we have to. It only takes one giant like Amazon to make our streaming services easier with a driver in automation and that’s were our dollars will go. In the end, our customers want their music, they don’t usually care how we do it.

Posted by dbendell on March 16, 2016

To John MacFarlane,
You kinda a deserve it. Don’t get me wrong, I/we love your products. You make us money as dealers. But, you guys have sat behind the fence, hiding your third party API’s, making it difficult in dollars for every manufacture to reverse engineer your products for automation. Then you guys change something and we all scramble for weeks to make it work again. In the meantime, multiple vendors are starting to fill this void. You could have owned this market space and you chose to ignore it. You chose to keep high cost in engineering, limited drivers on those that succeeded, while us dealers learned to sell other items that could quickly get someone Pandora and rest on their automation platform easier.

The day you realize this, is the day your dollars start coming back to you. Hurry cause we are not waiting any longer than we have to. It only takes one giant like Amazon to make our streaming services easier with a driver in automation and that’s were our dollars will go. In the end, our customers want their music, they don’t usually care how we do it.

Posted by zhifi on March 17, 2016

Couldn’t agree more. I’ve told Sonos higher-ups that the CI world would sell tons of their their product if they opened up their API and developed a multi channel rack amp. When you model your client base on the diy end user, you’re eventually going to confront billion dollar conglomerates trying to swallow up your industry. Sonos has told us they’re working on opening up their API to the CI channel but it’s still a waiting game; as more and more Autonomics, Fusion Research, Heos and the like are being integrated. No idea what they were afraid of. Lutron understands perfectly how to cater to the masses and the CI world.

Posted by Jeff D on March 17, 2016

I’m fairly safe, since I can’t imagine any of my clients talking to their AV equipment.

Posted by mike atlcontrol.com on March 17, 2016

I will somewhat reiterate what the few previous CI dealers have stated, with one minor deviation. Sonos has always been focused on the one-off DIY guy, in the hopes (as well-placed and on-point, as they may be) that those customers will organically grow/expand their systems leading to more sales. In their narrow focus of that end-user audience, they have not created a strong relationship in the CI market in so far as that being a two-way street. Sonos does not view the CI as a viable channel, and that has been made perfectly clear by their actions and the sheer arrogance of their sales team.
The opening up of their API is not the bone of contention everyone wants to make it out to be. It’s more the lack of a cooperative nature with third-party partners, which they will adamantly deny, that could have allowed us to incorporate their system into an existing, or new, home automation system.
So, I am not touched emotionally that they are struggling to regain their former glory. They’re still on the wrong track. And saying that streaming is the future of music is a half-truth.
There will always be opportunities that they will miss because THEY STILL DON’T GET IT!!