The news: Amid a leadership shakeup and declining stock value, Sonos may be scooped up by another tech player.
Last week, CEO Patrick Spence resigned following Sonos’ stock decline of 26.6% since a disastrous app update in May and an 8% YoY revenues drop.
The most likely contenders to purchase Sonos are Amazon or Spotify, per Bloomberg.
Sonos’ established brand and fine-tuned tech—which includes wireless speakers, home sound systems, and headphones—could attract companies looking to expand in the smart home market.
How Amazon could benefit: Amazon recently changed its hardware leadership after poaching Microsoft chief product officer Panos Panay, and it has the deep pockets to afford the purchase.
The purchase would allow Amazon to hand off its Echo speakers to a knowledgeable staff and center its other tech endeavors on AI supercomputers and the cloud.
However, the European Commission has Amazon on its acquisitions radar and previously quashed other M&A plans, such as its now-canceled deal with iRobot.
How Spotify could benefit: Spotify has struggled to break into hardware, and acquiring Sonos would give it an instant entry to that market.
Software support for its 3-year-old Car Thing smart device for vehicles ended in December due to a lack of demand, rendering the product nonoperational.
Spotify might have a better shot when facing EU regulators than Amazon due to its smaller size and European roots.
A wild card: Apple could throw its hat in the ring, but with its prior purchase of Beats and strong internal capabilities, its audio business may not need the help of Sonos to keep scaling.
Our take: If Sonos continues to decline and no buyer is found, consumers may lose support for low-selling products and access to key features they based their initial purchases on.
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