Legacy Mode An Industry-Wide Issue, Says Sonos CFO of Shorter Product Life Spans

Responding to a question on whether Sonos will manage consumers’ expectations by letting them know a speaker has a five-to-10-year life span, Bagley said: “It’s not just us,” citing shortened product longevity due to limitations in processing power and memory. “It’s the entire consumer electronics industry who's going through this.” She referenced the breadth of CE devices people are bringing into their homes -- including speakers, thermostats, cameras, smartphones and laptops -- that have a different “shelf life” than previously.

“People are working through that transition,” Bagley said, saying consumers have to upgrade their smartphones regularly vs. sticking with the "rotary phone" some had in the kitchen growing up that never required updates. “We’re trying to remind people that these really are computers,” she said of Sonos speakers with processing power and memory constraints that come into play over time: “This is not because we decided we needed a financial upgrade cycle but because we truly ran out of the ability to do this on those products.” The company will keep products “alive” for as long as it can, she said.

On whether Sonos would address the life-cycle issue by using a modular approach with future speakers -- the company builds speaker modules for Ikea, which designs them into lamps and bookshelf speakers -- Bagley would only say, “Great question.”

Bagley commented on the two claims Sonos has against Google involving five patents for wireless multiroom audio and synchronization, "a pretty complex problem that we solved well ahead of anyone else.” She noted the International Trade Commission accepted Sonos’ lawsuit (see 2002060070) (see report, this issue) against Google and typically makes a decision on such matters within 18 months. Part of the reason for filing with the ITC is “to reach a more rapid conclusion,” she said. “The ITC has the power to block infringing products from importation. So if we win in the ITC, it’s a pretty big win for us.”

Google commented in January (see 2001250004) that the “sweeping remedial orders” that Sonos asked the ITC to impose against it would remove from the commerce stream products and functionalities that "far exceed the scope” of the multiroom audio patents Sonos alleges were infringed.

Sonos also sued Google in U.S. District Court in Los Angeles last month (see 2001070041), which can take longer to resolve, but that court is responsible for assigning the damages that would be awarded "either in willful or just regular” intellectual property infringement, Bagley said. Suing Google “was not our first choice” for how to settle the patent issue, she said, noting Google doesn’t “have a lot to lose from forcing us to go through them.” Sonos wouldn’t have taken that path if it didn’t think it had a good case, she said, saying the Google suit is “a sign of how serious we are about protecting our IP.”

Commenting on whether Sonos is concerned Google could retaliate by pulling its voice engine from Sonos smart speakers, Bagley said “they certainly could.” Sonos has a good partnership with Google “broadly,” though, and is working hard to keep it going, she said. “Could they retaliate?” she asked rhetorically. “They could. I’m sure that it would get looked at if they chose to retaliate against us because we’re trying to protect our IP, though.”

Responding to a question on the environmental impact of regular product upgrades, Bagley said the best way to reduce e-waste is to make products that last for a long time -- “to not have them be disposable tech that people keep for two or three years and then get rid of or replace.” For the legacy products that won't receive product updates beyond May, Sonos is telling customers where they can recycle them and how to “properly dispose of their e-waste.” The “best” environmental decision was not to have people shipping heavy speakers back to Sonos, but it will accept them for customers who want to return them to the company.

Sonos’ buy of Snips last fall for $37.5 million (see 1911220056) hasn’t been well-received by the Snips community, an analyst noted. Open-source home automation platform Home Assistant blogged in December that Sonos’ move to shut down public access to the Snips Console -- which brought together voice developers and artificial intelligence enthusiasts to build private-by-design voice assistants on the edge -- was a “very bad move by Sonos,” leaving “one less option for local voice control.”

Asked to comment, Bagley acknowledged some Snips users were unhappy about the purchase, but she said Sonos is focused with Snips' Paris-based engineers on AI and machine learning and “on what a voice experience for Sonos from the Sonos platform would look like.”

The ask-anything voice assistants -- Alexa and Google Assistant -- “focus their capabilities on being good at everything,” she said, and Sonos data shows customers “are not particularly happy with their voice agent experience” when it comes to music, she said: “It gets confused, it thinks you want to do one thing, when really what you were saying was the name of the band. So it’s not always reading that context, and yet, consumer expectations continue to go up in terms of time to music.”

When Sonos launched, app control was the next great thing; now it’s considered a second to voice control, she said. Voice has become critical for getting people to their music faster and making it easier. “We don’t want to be an ask-anything voice assistant,” she said, saying it didn’t make sense to compete with Amazon and Google. “But customer experience does really matter to us, and we think that we can make it a better customer experience if all you want to do is use voice to play music on your platform.”