I wrote a piece for Forbes explaining why I thought the Echo/Alexa has had some of the same disrupting impacts on the smart home industry that the iPhone did on the mobile business. I won't repeat them all in full here (go read it), but the gist of my post was this:
- The Echo, like the iPhone, is creating a new interaction paradigm for technology (voice with the Echo, touch for the iPhone).
- The Echo is making the incumbents in the market completely rethink their approaches to market. This is in large part due to their disruptive wedge strategy vs. the Apple/Google old-school mindset of having to create an entire walled garden ecosystem from the bottom of the stack up.
- The Echo, like the iPhone, isn't only disruptive because of the device itself, but the app and services ecosystem it promises to enable.
All of which is fairly relevant to the big story of last week, the Sonos layoffs. The news was announced in a post by John McFarlane, the CEO of Sonos, where he made it clear he recognized the disruptive impacts of the Amazon Echo/Alexa.
But it was a few days later with this interview in Billboard where it became clear how the company had, for the most part, ignored the Echo/Alexa until fairly recently.
From the post, this quote:
"I was at the Allen & Co. conference in Tucson last week and everybody there is a Sonos owner and they were asking, "What do you guys think about voice, will that ever be a part of Sonos?" And it became blindingly clear to me that it was important that we step into that conversation. Coming back, the Uber driver asked me about it. He literally overheard the discussion with Joy [Howard], who is our CMO, and Pete [Pedersen], the leader for PR. He got off the phone and said, "Man, you're totally right, I was gonna ask you, How do I integrate my [Amazon] Echo with my Sonos?" And he had a Play:1 in one room and an Echo in the kitchen and Play 1 in his bedroom. I came back and said we just need to step into this because we're tone deaf if we don't."
This quote really shocked me. I have a bunch of respect for John because he and his team have built what is maybe the single most iconic new consumer hardware brand over the past decade, which is no small feat, but this quote makes clear that Sonos had been resting on its laurels.
Which gets us back to the iPhone comparison. If Echo/Alexa is the iPhone, this quote from John shows me that Sonos may be the Blackberry, the once-iconic smartphone company (named RIM, or Research in Motion, before it became Blackberry).
Like Blackberry, Sonos has had a dominant market position, not only creating and largely defining a category (wireless speakers), but also owning a huge percentage of the market. As all market watchers know, being on top can cause a company to begin to think they're unassailable. We see it over and over in technology, from Microsoft to Dell to IBM to Blackberry and now Sonos. There is no safe place for those that don't continue to evolve and innovate, and in the era of IoT and connected devices, the innovation cycles are accelerating, meaning companies to reinvent themselves every few years rather than every decade.
Will Sonos catch up? Maybe. They still make great products. Not every consumer will want voice control. And there's still no guarantee that the Echo/Alexa will reach the same levels of dominance we saw with the iPhone. And heck, they could even partner with Apple on voice control/smart home (or get acquired) and create an equal to Amazon on the connected home front.
But make no mistake: that Sonos waited this long shows the company may someday be viewed as the 'Blackberry of the connected home'.
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