Are Stereos Dying? Sonos Announces Layoffs and Readjustments

Updated: Sonos says the layoffs were not ‘major’ or ‘significant’ as previously reported, though the company is declining to offer concrete numbers.  Specific layoff figures have not yet been published.  

A recent study revealed that 55 percent of Americans typically listen to music through their laptop speakers.  That raises serious questions over the future sophisticated, next-generation stereo systems, a category led by Santa Barbara-based Sonos.

Early this morning, Sonos revealed an unspecified number of layoffs, with the heavily funded company re-steering the ship towards a music fan that seems more willing to invest in headphones than high-end speakers.  “These last few weeks have been tough for everyone at Sonos,” wrote Sonos co-founder John MacFarlane in a company blog post.  “We’re a tight bunch, so saying goodbye is particularly painful. But I know that making these changes is the right thing to do for Sonos as we look to the future.”

Sonos’ turbulence is happening alongside an absolute surge in music streaming, with paid subscriptions easily crossing the 50 million-mark. Many of those subscribers are serious music fans, with portable music collections often accessed through high-end, $300-plus headphones.  The problem for Sonos is that many of those ‘higher-end’ users aren’t taking the next step towards audio hardware, especially those that favor flexible, on-the-go lifestyles that are easily dragged down by ‘stuff’.

The rest aren’t subscribing to services like Spotify, and seem heavily disinterested in perks like higher-end fidelity.  But are stereos dying?  Tough question, though the same dataset that shows heavy use of computer speakers and headphones also shows a core, niche attraction to higher-end products like wireless speakers and ‘loudspeaker’ component systems.

Are Stereos Dying?
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All of that is undoubtedly affecting Sonos, a company whose smart stereos seamlessly integrate with a range of streaming platforms.  That includes Spotify, Rhapsody, Apple Music, and Pandora, though it’s becoming unclear if enough consumers want the go-between.  “The shift is not complete as a few laggards continue to cling to fading business models, but it’s inevitable now,” MacFarlane wrote.  “The only question that remains is how fast the growth of paid subscription services will be.”

Also disrupting the landscape are ‘lower-end’ solutions like Amazon’s Echo, a quick-and-easy connected speaker that revolves around smart voice controls.  Indeed, that was mentioned by MacFarlane, who pointed to a strategic realignment around paid streaming and voice-enabled controls.   “Alexa/Echo is the first product to really showcase the power of voice control in the home” MacFarlane continued.  “Its popularity with consumers will accelerate innovation across the entire industry.”

“What is novel today will become standard tomorrow.  Here again, Sonos is taking the long view in how best to bring voice-enabled music experiences into the home.  Voice is a big change for us, so we’ll invest what’s required to bring it to market in a wonderful way.”

4 Responses

  1. john

    Sonos makes speakers, which are usually placed “one in every room”. This has nothing to do with a traditional Stereo-Equipment Setup. I feel that many listeners
    have lost the Notion of what it means to listen to music in a Stereo Environment in a room. Listening to stereo on the headphones is a different experience. Probably this also has increased the number of People having Problems with hearing-loss.

  2. Peter

    I have a pair of Sonos 1 set up in the living room. They are set up as a stereo pair.

    I stream Tidal HiFi from my iPad to the speakers, and enjoy sitting in the sweet spot, enjoying my favourite tracks.

  3. David

    I think the results of this poll are misleading.

    First, “computer speakers” is an ambiguous term… and “built-in” is not specified (yet the article assumes built-in laptop speakers).

    For example, AudioEngine, M1, Yamaha and many others manufacture what are essentially studio monitors, but since they are two-ways and designed for desktop use, they market them as “computer speakers”. I have several pairs of the AudioEngines, and I can assure you they are several steps above the tinny cones built into laptops.

    Second, many of the categories above overlap. For example, speakers manufactured by LG, Nox, JBL and others may be marketed as “computer speakers”, “monitors”, etc., but also have wireless capabilities. I have my AudioEngines hooked up via AirPlay, and can stream wirelessly if I want… or dock my phone, or feed the zone 2 from my AVR.