Bad market environment: Sonos postpones product launch

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bad market environment sonos postpones product launch.jpg
bad market environment sonos postpones product launch.jpg

People currently prefer to spend their money on services and travel rather than goods, says Sonos. A new product should therefore come onto the market later.

Warning signal for the consumer electronics industry: The speaker provider Sonos sees such a bad environment for its business that it is postponing the launch of a new product. The device, which according to US media reports is a cheaper subwoofer, is now scheduled to be launched in the Christmas season instead of in the current quarter. Investors dropped the stock more than 16 percent in premarket trading on Thursday.

Sonos has seen a slowdown in demand in its businesses since June, CEO Patrick Spence said in a conference call with analysts. He attributed it in part to the fact that consumers are currently spending their money on services and travel rather than goods. Sonos launched its cheapest soundbar model to date in June – and it missed sales expectations “considerably”, as Spence said.

Sonos’ sales fell by around two percent to $371.8 million in the third fiscal quarter that ended in early July. The bottom line was a loss of almost $600,000 after being in the black from $17.8 million a year earlier. Spence pointed out, among other things, that the strong dollar had depressed foreign earnings by $15 million when converted into US currency.


(mho)

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