Sonos takeover speculation grows, with Spotify or Amazon tipped as potential suitors (report)

Could an acquisition bid soon be made for audio technology company Sonos?

The fallout from its app rollout in 2024 and the company’s recent leadership shakeup, which saw CEO Patrick Spence and Chief Product Officer Maxime Bouvat-Merlin depart last week, have intensified speculation about potential buyers if the company’s board decides to sell.

The company’s recent struggles have pushed its market value down to $1.7 billion from over $5 billion during its pandemic peak.

Bloomberg’s Mark Gurman points to Spotify and Amazon as the most probable suitors, each offering distinct advantages for a potential acquisition.

Gurman noted that Amazon appears to be “the most natural fit,” particularly following its appointment of former Microsoft executive Panos Panay to lead hardware development. Acquiring Sonos could help Amazon elevate its Echo device lineup with premium audio technology, he said.

“Amazon could certainly afford to buy Sonos,” Gurman said. However, he noted that the company might face regulatory scrutiny similar to what derailed its attempt to acquire Roomba maker iRobot.

Music streaming giant Spotify, potential suitor, could face fewer regulatory hurdles as a European company, Gurman said. An acquisition would give Spotify immediate entry into the hardware market. In 2021, Spotify became a hardware maker after launching a smart device for the car called the Car Thing. However, less than three years after its initial rollout, the product became officially non-operational, with Spotify saying the market for the Car Thing was not what the company had been hoping for.

“Spotify has long wanted to get into hardware but struggled to make it happen. Sonos would give them an instant entry, with an excellent range of products that could run its audio services,” Gurman wrote.

Other potential buyers include Samsung Electronics, which has struggled to gain traction in the home speaker market despite owning the Harman brand. Acquiring Sonos could strengthen its home audio offerings. Roku, with its existing soundbar and speaker lineup, could also benefit, but a stock-based deal might be necessary, given Roku’s limited cash reserves, Gurman noted.

The Bloomberg chief correspondent added that while larger tech companies like Apple, Google, and Meta could be potential buyers, they are unlikely candidates due to existing strategies and past relationships with Sonos.

Apple could acquire Sonos for around $2 billion — less than it spent on Beats — and Sonos’ hardware could help strengthen Apple’s underwhelming HomePod and home audio lineup, Gurman said.

“But I don’t believe Apple will ever acquire Sonos. If Apple really wanted to build out its home audio business, it already has the hardware, software, content and manufacturing chops internally. It’s just about wanting to get things done properly — something that Apple is already working on,” he wrote.

Speculation about a sale of Sonos comes amid the company’s ongoing recovery from a problematic software update launched in May 2024 that affected its product ecosystem. Three months later, the company laid off 100 employees, or around 6% of its workforce.

The company said last week that Spence’s departure as CEO is “unrelated” to Sonos’ fiscal Q1 (calendar Q4) results which will be reported on February 6, 2025, and for which the company said it “is providing no update at this time”.

In the fiscal fourth quarter of 2024, ended September, Sonos’ revenue tumbled 8% YoY to USD $1.52 billion, which the company attributed to “softer demand due to challenging market conditions and challenges resulting from our recent app rollout”.

Bloomberg’s Gurman said the best scenario for consumers is for Sonos to remain independent.

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