The Sonos Brexit and pragmatic ways past it

@chickentender : All Sonos line in jacks are functionally identical. The 5 just has a multi jack, to save space, I guess.

I’m going to give this a watch. Sounds like he’s on our page. :)

My thoughts here Kumar are that Sonos will only support the 'official' current two versions of their software, going forward, which seem to be currently referred to as a 'Legacy’ and/or ‘Modern’ setup and anyone choosing to stay on earlier versions of the software will not be supported by Sonos Customer Care.

I seem to recall that was the case mentioned in the CR100 thread and that people made their own choice to lock-down their systems and standstill. I don’t see how their own chosen course, will have any bearing on what now seems to be planned in May… a clear line will be drawn (hopefully) and then all of us, on both sides of any divide, will continue to receive Sonos support and any updates necessary to meet their support requirements. I just cannot see Sonos providing assistance to those that decline to use the latest updates, whether that be a legacy system update, or a modern update. However, like all things, we will have to wait and see what May brings.

@Ken_Griffiths and everyone, to clarify: In my quote above I did not intend to convey that “special handling” will in any way be by Sonos - it refers to the special handling being given to their systems by the referred users themselves just now, that will have to be continued by these users. if they do not continue that, the system may end up inadvertently updated to the legacy app version, with consequent bricking of the CR100s and the like. But not, mystifyingly, of the CR200 - ref back to the @Meezer posts here.

well, I was thinking, I work in a US multinational company too (on NYSE) and there is this huge focus on free cash flow nowadays, more than ever, free cash flow indicates your future stock price and health. Now I was wondering how healthy Sonos` free cash flow is nowadays and how this will be affected by the fact that their unique selling point is in danger. There is an enormous amount of users vocal on this forum and as we can clearly see, not always acting rational but very emotional and impulsive and they represent probably only 0,0001% of Sonos users world wide. How would the doom scenario look like if, because of this, their cash implodes and investors are not willing to add any ?

Another knock on @Ryan S : When I create topics, I leave the Tag thing blank, because I am clueless on what that is about. If it is something that will add value, please fill in whatever words there you think will serve best.

@Eddie the Eagle :Having been involved in US based M&A activity, I know a little about this. You are right about free cash flows being the most important aspect, but the thing that a buyer looks at above all is what he can expect as sustainable free cash flows for the next 5-15 years, and determines his buying price band based on that. And for that he sees what these have been in the recent past, but while doing future based scenarios, he throws in what he expect these to be once he is in charge of running the business, bringing what he believe are his superior managing capability as well as opportunity for leveraging a collaboration with what assets he already has. So present state of the cash flows is important, but only as a starting point to project the future ones.

Obviously, the lower the stock price, the lower the cost of acquisition, and the lower that projected future cash flows then need to be, to justify the acquisition. But, it is always about expectations of future cash flows. So as long as this future is perceived to not be damaged seriously, there will always be buyer interest. But what the buyer will then do to maximise these after the buy, may or may not be good for us. One can only hope that interests align. 

And from the above, you can understand why more acquisitions are a failure than are successes. Lots of forward looking comes into it, that can go wrong. And usually does.

• chickentender : yes, any hdmi converter / extractor  / splitter. The first box I  got was actually an hdmi->vga adapter . It just happened to have a 3.5mm audio out and I thought “ohhhh, chromecast plugs into hdmi .. grab the audio, line out into play:5
  
  And it worked. Sweet. The grouping is a bonus, stereo “pairing” was the icing on the cake. Others have pointed out better ways of pairing rather than cutting wires :)

Yup, separate the (relatively) durable functionality (big screen, speaker, refrigeration! etc ) from the rapidly changing Internet-facing functionality.

Since the durable stuff is expensive to build while the non-durable (disposable) stuff is cheap to build, this approach works logically and financially.

So, my TV was purchased to act as a dumb screen taking inputs from elsewhere. My focus on purchase was buying the TV with the best screen/visuals for the money, while ignoring the ‘smart’ functionality. Sure, I used the smart functionality initially a little, but quite quickly plugged into it a 3rd party streaming gizmo that was cheap enough to be disposable and replaced every few years.

If I was the person running Sonos I’d hopefully be learning a big lesson from this current episode around customers’ expectations that durable-looking goods should indeed endure. If they don’t endure, then in the future a bunch (maybe a *lot*) of those customers won’t buy quality, expensive durable-looking goods (Sonos) but will buy inexpensive disposable alternatives instead...

For example, a couple of weeks back Google sent me a free Nest Mini, normal cost $49, which works well enough. There’s a couple of locations where I have Play:1s used for low-level background radio for 99% of the time that could easily be replaced by something like a Nest Mini when the time comes. Not as nice as a Play:1, but for 99% of time good enough. And if they needed replacing after several years ownership because the techs become old-hat, then at $49 each it’s not the end of the world. It’s not just about the money: it simple seems ‘wrong’ to be lobbing a hefty speaker into the trash when the internals all work just fine.

In Sonos shoes I’d be trying to get ahead of the curve on this and (if necessary) re-architect the product lines to ensure that durable-looking purchases, such as weighty speakers, are able to endure. By that, I mean I’d be looking to mimic the ‘smart’ TV approach above: by all means sell speakers with built-in streaming tech, but ensure that once that on-board streaming tech becomes outdated that customers will be able to retain the speakers as networked speakers, by using ‘off-board’ streamers for example.

Separate the more durable, ‘stable’ functionality from the non-durable, rapidly changing stuff.

Folks here are looking at using cheap stuff like Echos and Chromecasts that can be plugged into (older) Sonos speakers or other devices possessing line-in sockets, but in Sonos’ shoes I’d be looking at addressing this customer need themselves by offering their own low-cost streaming devices that can be connected to Sonos speaker networks, ie. not physically plugged in, so not requiring line-in sockets. As has been mentioned numerous times here already, Amazon & Google’s pricing has indicated the absurdity of Sonos’s pricing for its Connect/Port type devices. NB an off-board Sonos streaming device of the type I imagine would need to be a fraction of that legacy pricing.

This ‘vision’ has Sonos positioning itself as a vendor of high quality, durable networked speaker systems that insulates you from fast-changing Internet-facing tech for as long as possible. This ‘insulation’ enables you to spend freely on high quality speakers secure in the knowledge they will endure, while knowing there’s a means (at reasonable future expense) of addressing the aspects of the system (such as Internet-facing, streamers, voice) that’ll date more rapidly and have a shorter lifespan.

Sonos would way it’s already followed this vision, and up to a point it has, and that’s allowed it to build a large customer base over the years, but clearly this current episode says that its customers have expectations that Sonos isn’t now meeting.

I don’t think Sonos’s backtracking this past week adds up to much yet, most likely a PR sticking plaster exercise, but we’ll see. My guess is that Sonos doesn’t do anything along the lines I’ve tried to outline above - changing product lines to recognise the need for a separation of durable and less-durable functionality - and just carries on with what it’s done previously. If so, I’d expect customers to become increasingly wary of adding to their Sonos systems, or embarking on new substantial purchases of Sonos kit, while at the lower end for Sonos to continue to face an onslaught from Amazon and Google (+Apple). Sonos to go ex-growth and the future most likely being a steady decline.

I think they have a shot at a different path but they need to act swiftly and boldly else the moment will pass.

Technically this is true but in practice you need more than one app to cover all the services that the Sonos app delivers in one.

I am in the UK and here is my real-world example: I can stream from the TuneIn app to Chromecast Audio and then via line-in to Sonos. However BBC UK radio feeds have been pulled from TuneIn (these feeds are still available via Sonos at the moment). So to stream, say, BBC Radio 4 I need to use the BBC Sounds app as well.

Then to play my library music from my NAS or from Plex I need a third app. It’s too bitty and just won’t get used.