The New Sonos Amp or Why Sonos Is So Smart

Sonos owns a huge chunk of the $18 billion home-audio market [footnote 1]. They got there by making smart products that were easy to set up, even easier to use, and easy on the wallet.  Even though profit margins were slim for resellers and installers, people loved selling Sonos because it was easy to set up, even easier to use, and more times than not a Sonos system acted as a gateway drug.

From Statista:

As of March 31, 2018, Sonos customers had registered more than 19 million speakers in 6.9 million households worldwide, meaning that on average every Sonos user has 2.7 speakers in its home. In fact, the filing reveals that 61 percent of Sonos households are equipped with more than one speaker and that 4 in 10 of those households have at least three of the company’s products. Moreover, customers who buy one Sonos product, buy an average of 1.4 additional devices within 4 years of the initial purchase, indicating a large degree of customer satisfaction and system “lock-in”.

After their IPO on August 2 of this year, Sonos stock has climbed putting their market value at nearly $2B (that’s a lot). According to their filing, the company is on track to surpass $1B in sales this year.

We view Sonos’ connected home speaker technology enabled with multiple voice assistants as a differentiated value proposition that should help Sonos to hold its own in a competitive smart speaker market,” Goldman analyst Rod Hall said in a report. He rates the stock as buy with a 12-month price target of 25.

When it came for a major re-design of their ageing Sonos Connect amp, they asked experts, outside the company, for help. That’s smart. Jeffrey Van Camp over at Wired does a great job of telling the Sonos new amp story so I recommend giving it a read.

Rappoport and lead industrial designer Philippe Vossel gathered in a conference room in the company’s small Copenhagen office along with Cristoffer Arensbach, the CEO of Danish high-end audio dealer and installer HiFi Klubben. Like other installers Rappoport had met with—and more than a hundred his team surveyed—Arensbach liked the aging Connect:Amp, but felt it wasn’t as powerful or capable as it could be for robust speaker installations. After a decade on the market, it was long in the tooth.

The new Sonos Amp is $599.

  • Enjoy high-fidelity performance with 125 Watts per channel
  • Power your bookshelf, floor-standing, in-wall, and in-ceiling speakers
  • Stream everything you love with the Sonos app and AirPlay
  • Connect your TV to create the ultimate entertainment system
  • Amp is built to last and improve over time

  1. That number comes from Morgan Stanley analyst Katy Huberty