Michael Huber 
New York
CNN
—
Sonos was once a pioneer in wireless home audio, holding its own against giants like Apple and Google in the niche market of premium speaker equipment. But after nearly a year of missteps and disappointment, the company says it has a plan to turn around its misfortunes – and regain customer trust.
The audio company has been in turmoil after a dysfunctional app update last May caused customer outrage, overshadowing the launch of its first-ever headphones. The app meltdown cost the company $100 million, the CFO estimated late last year. Share prices slid (SONO).
Chief executive Patrick Spence stepped down in January, and on February 5, Sonos laid off 200 employees, or 12% of its workforce, adding to the company’s struggles.
“As a longtime passionate customer myself, I know the magic of Sonos, but I also know the extreme disappointment of the company’s recent app challenges,” interim CEO Tom Conrad said on the company’s earnings call on February 6.
The company is reshuffling its product-focused teams into groups organized around topics like hardware, software, quality, design and operations, rather than individual product categories, Conrad said on that call.
“It’s salvageable, but they’ve got to act quick,” said Brent Thill, an analyst at Jefferies who covers Sonos. “They have great products. It’s just I think they’ve lost some of the consumer thrust and excitement, and they’ve got to get back quick to regain this.”
The app debacle
Sonos’ missteps with its May app update have turned the company on its head. The software update, which aimed to overhaul and improve the app experience, removed simple user features and introduced glitches like not being able to control speaker volume or set alarms.
Users flocked to social media and Reddit forums to complain about the company’s app. Yet Sonos failed to act swiftly and offered inadequate fixes, according to Jefferies’ Thill.
“I’ve never seen a company take so long to make an update,” Thill said. “And I think they lost kind of critical time. They obviously had a lot of upset consumers and rightfully so.”
The fallout from the app debacle hit Sonos’ bottom line.
“We estimate the challenges associated with our app launch adversely affected our revenue by at least $100 million,” CFO Saori Casey said on the company’s fourth quarter earnings call in November.
The company’s annual revenue declined more than 8% from fiscal year 2023 to 2024, according to SEC filings, sliding from $1.66 billion to $1.52 billion. (The company’s fiscal year ends in September.)
“If you have good hardware, which they do, but you have crappy software, it’s a toxic mix,” Thill said. “No one’s going to use your hardware.”
From ‘darling’ to ‘dropout’
Sonos made a splash in consumer tech in the 2000s because it was a trailblazer in the field of wireless speakers, according to Saikat Chaudhuri, a professor at Berkeley Haas School of Business.
Born out of Silicon Valley, the company aimed to remake peoples’ experience with audio in their homes. Sonos launched its first product, an audio player that powers speakers, in January 2005.
“They were an innovative company, came up with a cool set of products, and it was really something novel,” Chaudhuri said.
Sonos was the “customer experience darling” of tech companies in the 2000s, according to Larry Vincent, a professor at USC Marshall School of Business. From the packaging to the sleek hardware, Sonos’ products developed a dedicated customer base.
Yet since Sonos’ first product launch, the “landscape has changed” for home audio options, Berkeley’s Chaudhuri said, as giants like Google and Amazon have moved into home devices, longtime competitors like Bose have diversified their products and new innovative companies have emerged.
Additionally, Chaudhuri said Sonos did not take advantage of the emergence of streaming services and the opportunity to become a more dynamic company beyond hardware offerings.
Sonos faces fresh competition from younger audio companies such as Turtlebox and BluOS, putting more pressure on the company to deliver, according to Jefferies’ Thill.
In recent years, Sonos also began to lose touch with its customer experience. The app rollout was the final straw, Vincent said, and a clear lesson in the importance of prioritizing customer experience while growing as a company.
“They went from customer experience darling to a customer experience dropout,” he said.
The redemption arc
There’s a lot at stake for Sonos in 2025. The company posted back-to-back net losses in fiscal year 2023 and 2024, according to SEC filings, and its stock is down almost 22% year-over-year.
Interim CEO Conrad said on Sonos’ February 6 earnings call that his focus is “getting Sonos back on track.” Conrad said he is focusing on three areas: “performance and reliability, usability and design and new experiences” to “return to excellence in the core experience.”
Now, the company will have to prove it can deliver on that pledge.
USC Marshall’s Vincent said that he thinks it is imperative that Sonos focuses on fixing its customer experience.
“I’m hoping that they are able to turn it around,” Vincent said. “Because brands like this don’t come around all the time.”
