Sonos CEO Patrick Spence announced during the company’s third-quarter earnings call that two new products scheduled for release later this year will be delayed. This decision comes as a direct response to ongoing issues with the Sonos app, which have significantly impacted customer experience and product sales. Spence acknowledged the app situation has become a headwind for existing product sales, stating, “And we believe our focus needs to be addressing the app ahead of everything else. This means delaying the two major new product releases we had planned for Q4, until our app experience meets the level of quality that we our customers and our partners expect from Sonos.” While Spence didn’t specify the nature of the delayed products, it’s likely they are in the speaker category, possibly including an update to the Sonos Arc soundbar. Despite the delay, he confirmed that the products are ready for shipment.
Spence also shed light on the reasons behind the overhaul of the entire Sonos system and the issues that arose during the process. He explained that the company is investing $20 million to $30 million to address the short-term challenges and ensure a return to customer satisfaction. “A few years ago, we decided to embark on a complete ground up rewrite of our app,” Spence stated in his prepared remarks. “One reason was to address the performance and reliability issues that had crept in over the last 20 years and were negatively affecting our customers’ experience. This would have been reason enough. But as important, we viewed re-architecting the app as essential to the growth of Sonos as we expand into new categories and move ambitiously outside the home.”
The Sonos Ace headphones, launched shortly after the initial app update that caused widespread problems, were the company’s first foray into non-speaker products. Spence emphasized that the system rebuild was intended to prepare for future growth and innovation. He explained that the previous app iteration could not support the company’s ambitions. “In addition to its more modern user interface, the new app has a modular developer platform based on modern programming languages that will allow us to drive more innovation faster, and thus let Sonos deliver all kinds of new features over time that the old app simply could not accommodate. Some of these new features are already on our drawing boards and could represent our entry into new categories. Others are still to be imagined. But without a modern app, they would have remained beyond our reach.”
Spence, who joined Sonos as chief commercial officer in 2012 after a successful career at BlackBerry, took full responsibility for the situation. While acknowledging the redesign was the right decision, he admitted that the execution fell short of expectations. “While the redesign of the app was and remains the right thing to do,” he said, “our execution — my execution — fell short of the mark. Since I took over as CEO, one of my particular points of emphasis has been the imperative for Sonos to move faster. That is what led to my promise to deliver at least two new products every year, a promise we have successfully delivered on with the app. However, my push for speed backfired.
