Heading into the final quarter of its fiscal year, Sonos probably thought the business would be in good shape.
Unfortunately, the botched Sonos app redesign left customers furious and has embarrassed the audio company ever since, with CEO Patrick Spence officially apologizing for the app debacle in late July.
The consequences of that misstep continue to affect the company, as Spence revealed in Sonos' third-quarter earnings press release.
The issues with the app redesign prompted Sonos to cut its 2024 financial guidance. In other words, the company's initial targets and expected earnings for the fiscal year had to be changed because of the software update. And that came despite the launch of the Ace headphones, which “exceeded our expectations,” Spence said.
But beyond just revenue, the Sonos app has virtually shut down the company's business, including by delaying future products.
“Ace Headphones has been overshadowed by the issues our customers and partners have experienced following the launch of our new app,” Spence said. “We have a clear plan of action to resolve the issues caused by our app as quickly as possible.”
The company is currently focused on fixing the app with a report outlining Sonos' next steps, including “the ability to introduce software updates to fix bugs, improve the customer experience and add certain features to our new app in a timely manner and to implement our action plan to resolve issues caused by our new app; our ability to maintain, enhance and protect our brand image.”
Apparently, Sonos has two new products that were supposed to be released in the coming months, but the app issue has delayed that process. It's unclear exactly what those products are, as Sonos hasn't specified which ones were affected.
However, in early July, it was reported that Sonos was working on a successor to the Arc soundbar, codenamed “Lasso.” The new soundbar is said to feature new technology, more powerful bass, and improved Bluetooth audio. If the rumored speaker is as good as the Arc, it will immediately become one of the best soundbars available.
Bloomberg reported in November 2023 that Sonos was working on a TV set-top box to compete with Apple TV and Roku. The device was expected to cost between $150 and $200 and run apps from streaming services. Not much more is known beyond that.
It’s a good thing Sonos is delaying the launch of its new products to focus on the app. The redesign was universally hated by Sonos customers and sparked a lot of backlash on social media and Reddit. Sonos’ support forums and blogs were flooded with posts and comments complaining about the app redesign.
Spence said in its third-quarter earnings report that the redesign efforts to fix the app's issues would cost the company between $20 million and $30 million. Spence seemed confident that Sonos would return to normal, describing the incident as a “regrettable” chapter.