Sonos sounds upbeat note following its Nasdaq debut
Long track record as private company
Premium speaker-maker Sonos Inc. says strong partnerships and its focus on long-term innovation should calm concerns over comparisons to some recent tech hardware IPOs that haven’t lived up to their promises.
Sonos Inc. debuted on the Nasdaq stock exchange on Thursday with an initial price of US$15 a share, below an expected US$17 to US$19 price point. With a value of slightly less than US$1.5 billion, the company raised about US$208.5 million in the process.
Other tech hardware companies such as GoPro Inc. and Fitbit Inc. have been lacklustre in their stock market performance after failing to convince investors about longterm strategies, but Sonos said it has a 16-year track record as a private company to point to.
“We’ve seen a lot of companies get in trouble trying to deliver results based on short-term growth or trying to get market share at any and all costs, but that’s not what we are about or what we do,” said Allen Mask, Sonos’ vice-president of product marketing and collaborations. “We’ve been an innovator in this space before the space was even a space … From the rise of music streaming to the proliferation of voice assistants and continued development of the smart home, that was our business before those trends even took shape.”
On its first day of trading, Sonos shares quickly surged and were up as much as 32 per cent by mid-day, nearly hitting US$20 per share. It closed Friday at US$20.95, up five per cent on the day.
In addition, the company used its sound experts and engineers to create a new bell for the Nasdaq’s daily use, something that hasn’t been updated in 18 years.
“We wanted to do something special to remind us of how far we’ve come and how far we have to go, but also we just wanted to contribute to the process,” Mask said.
Sonos has always been focused on making speakers that are easy to use with premium sound, and it’s earned a loyal following in the process. The company said that 93 per cent of the more than 19 million registered products in homes are still active, with 61 per cent of users owning at least two Sonos speakers while 25 per cent have three or more.
But as the voice-enabled smartspeaker category has continued to grow, Sonos has seen more competing products surfacing from the likes of heavyweights Google and Apple. Sonos said its openness to all platforms and partnerships are what sets it apart.
“Our company is founded on the spirit of independence and freedom of choice,” Mask said. “We are incredibly customer centric and we believe that people should be able to craft their sonic environment and engage in that culture on their own terms.”
Sonos has partnerships with companies around the world including Amazon, Google, Apple and Spotify for things such as operating system integration, music streaming service support and voice assistants. It also heavily relies on retailers around the world to get products into the hands of customers, but that’s a risk the company said it is slowly mitigating.
“We work with over 10,000 thirdparty retailers and have great relationships with them … it’s important to realize people still buy products at these places,” Mask said. “That said, our fastest growing distribution channel is direct to consumer, and that’s 12 per cent of our business right now. We’ll continue to invest in and grow that portion of our business.”
Sonos said it’s also continuing to focus on growth in markets outside of the United States, including expanding its presence north of the border. “We love Canada … it’s an incredibly important market to us and some of the most talented people that I actually work with at Sonos are based out of or around our Canadian offices,” Mask said.