Sonos CEO: This is the golden age of audio
With all due respect to the buzz on Wall Street around exploding cloud computing sales and the excitement over autonomous driving future led by a publicly traded Uber, it’s the audio industry that may be more exciting right now.
“We believe we are in the golden age of audio,” boasts Sonos CEO Patrick Spence in an interview with Yahoo Finance.
Spence isn’t far off the mark with that call considering the news flow this year.
Spotify goes shopping
Spotify founder and CEO Daniel Ek took a large step toward achieving his refined mission in the audio space (to move beyond just being a streaming music player) this week. The company disclosed it will acquire podcasting platforms Gimlet and Anchor for undisclosed sums. Gimlet is a podcast creation platform known for its popular “Homecoming” podcast. Anchor is more of a podcast distribution platform for emerging talent.
It’s likely Spotify paid through its ears to buy the platforms given the still reasonably hot podcast industry — Gimlet reportedly was in talks to sell out to Spotify for around $230 million.
Ek said in a new blog post Wednesday that Spotify is the second biggest podcasting platform. Podcast users spend almost twice the time on Spotify and spend more time listening to music, Ek said.
Spotify has allocated up to $500 million this year to acquisitions, which will probably include more audio-based original content.
Amazon Alexa domination continues
Amazon said on its fourth quarter earnings release in late January that the number of devices with its voice assistant Alexa doubled in 2018. There are more than 150 devices available with Alexa, according to Amazon.
The uptake of Alexa devices isn’t surprising given Amazon’s constant evolution of its skills and consumer interest in hands-free living. Amazon says the Alexa Skills store now offers more than 80,000 skills. Full access to Apple Music’s 50 million song library is also opened up to Echo devices.
Amazon will likely spend most of 2019 further enhancing Alexa’s capabilities. A source close to the matter tells Yahoo Finance a focus on expanding into other areas of the auto industry and living room with Alexa are in the cards, too.
The global smart speaker market will be worth $7 billion in 2019, an increase of 63% year over year, according to research from Deloitte. If achieved, it would bring the installed base of smart speakers to an impressive 250 million units by year end.
Apple Airpod sales strong
Apple told Wall Street analysts on its latest earnings call that Airpod sales were “strong” in the most recent quarter. The tech giant doesn’t disclose unit sales for the Airpod product line.
Apple is reportedly focused on adding more health tracking features on the next iteration of Airpods.
What this all means for Sonos
While Wall Street wasn’t too happy with Sonos’s latest results and outlook — the stock plunged 11% on Thursday — its growth rates in new audio products were strong. Sales of the new Sonos Beam home theater smart speaker surged 42% from the prior year.
Sonos said its users listened to 1.8 billion hours of audio content using its products in the quarter, up 39% from a year ago. The company ended 2018 with 22.7 million registered users globally.
Spence says Sonos is focused on its approaching launch of new outdoor smart speakers and its Sonos Amp. Sonos will also be moving new products into Ikea this year — it’s unclear what they will be at the moment. The company is also reportedly working on its first pair of headphones, though Spence declined to comment on that one.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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