Sonos CEO Patrick Spence: "There's no category of audio that I don't think we want to explore"

CEO of Sonos Patrick Spence sat down with Verge editor-in-chief Nilay Patel for The Vergecast once again, this time immediately after a Sonos press event in New York City. Sonos had just announced a few new products, notably their first Bluetooth speaker — the Sonos Move — so Spence answered some questions about those new products, what it took to finally bring Bluetooth to a Sonos device, and if Apple’s Siri will be coming to their speakers. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:58Nilay Patel?

  Hey, everybody. It's Sam from The Vergecast. This week's interview episode, a little delayed, I know, but very special. It's Patrick Spence, the CEO of Sonos. Sonos today announced the new Sonos Move. It's a $399 portable speaker, has a battery, 10-hour battery life. And when you get out of the range of your Wi-Fi in your Sonos system, you can just switch it over to Bluetooth. It's their first-ever Bluetooth product. They also announced the One SL. It's an update to the Play One. It's basically a Sonos One without microphones. And the new Sonos Port, which lets you plug in to a regular stereo system or stream things like a turntable to your Sonos. So lots of new products from Sonos. Patrick was here in town in New York. He was in the studio with us. We went through all the new products, went through how he sped up the company since taking

• 1:42Nilay Patel?

  over as CEO, instituted some change, got over, and this is a true thing, got over the company's resistance to making a Bluetooth speaker and the fights it took to convince people to embrace Bluetooth inside of Sonos. If I was in a conference room and everyone was screaming about Bluetooth, that would be kind of a dream. But we talked about how Sonos got over the hop, sped up their cadence, putting out new products, and what it's like to be an independent company in an age of giants. Check it out. It's Patrick Spence, CEO of Sonos.

• 2:11Nilay Patel?

  Patrick Spence, welcome to the Ruchest.

• 2:12Speaker 02

  Thank you.

• 2:13Nilay Patel?

  Thanks for being here. So you announced a speaker today.

• 2:16Speaker 02

  We did.

• 2:16Nilay Patel?

  I'm going to be honest with the audience, the announcement is like in the future from this day, but we met with you today, we saw the new Sonos move, the new 1SL, the Sonos port. Tell us about the move. Tell us, tell us why you finally made a Bluetooth speaker, because that's a big deal.

• 2:32Speaker 02

  It's a huge deal for us. And as you think about it, we have built a core set of capabilities inside the company around sound and sound experience. And as we looked at feedback from customers and as well, the opportunities that were out there, we felt like listening shouldn't have to necessarily stop at the front door. And so taking everything we've learned from producing great sound and easy experience and freedom of choice in the home, we felt it was time to take it outside the home. And we, we'd kind of dipped our toe in the water with new technologies beyond Wi-Fi with what we did with AirPlay. So supporting AirPlay helped us get comfortable with delivering a Sonos-like experience over wireless protocol other than Wi-Fi. And so Bluetooth was obviously one that helps us deliver the kind of experience

• 3:17Speaker 02

  outside the home that we want to deliver. So it was a natural next step. But we had to not only deal with Bluetooth, we had to also deal with battery technology, which was also new for us, right? Because we've always, to this point, worked in a situation where you could plug the speaker into the wall. So both of those things were important engineering challenges for us and getting over the philosophical hurdle of always being on Wi-Fi.

• 3:39Nilay Patel?

  Yeah. I want to talk about getting over philosophical hurdles because you're the new CEO. You, literally when you came in, you said, we got to up the product cadence. And we're, we're well into that now.

• 3:49Speaker 02

  Yes.

• 3:49Nilay Patel?

  So I want to talk about that at length, but let's focus on the, the product itself. So just describe the move for people in case they're not familiar with it.

• 3:55Speaker 02

  Yeah. So we think we are setting a new bar for a portable outdoor speaker. And so it's a Sonos speaker, like you would expect, which you can use with your Sonos system in the home, when you're around your home and when connected to Wi-Fi. But when you leave the home, you can actually take it to the park or a beach and use Bluetooth to actually connect to it as well. And I think what's different than many speakers is Our awesome sound, obviously, but as well the durability that we put into this thing. We have tested this to no end. In fact, in one of the drop tests, we actually broke a piece of concrete with Move, which was pretty incredible. It's been water resistant. We put it up against sand, dirt, dust, sweat, mustard, ketchup, you name it.

• 4:38Speaker 02

  And so we've built something that I think is very practical for real life outdoor uses. And not, you know, not something that was just kind of the technology that you could introduce, but rather something that was thoughtful about the way customers are actually going to use this product. So we think it's built for the long term, like all Sonos products, and we think customers are going to love it.

• 4:59Nilay Patel?

  So it's a little bit bigger than a Sonos One.

• 5:01Speaker 02

  Yeah.

• 5:01Nilay Patel?

  Where does it kind of fit in the scale of Sonos products?

• 5:04Speaker 02

  So, you know, it sounds bigger and it is a little bigger than the Sonos One. It doesn't produce the volume of sound that a Play 5 would. So that's at the top end of our wireless speaker range. It fits kind of nicely in the middle for those people that are looking for the versatility of being able to either move it around their house or take it into the backyard, take it to the beach, take it to the park. Fits that use case kind of in the middle of our wireless speaker portfolio.

• 5:28Nilay Patel?

  And how much does it cost?

• 5:29Speaker 02

  It is $3.99.

• 5:30Nilay Patel?

  We got to talk about that number. That's a big number, but you think people are going to jump on it.

• 5:34Speaker 02

  You know, the, this is an amazing sounding product and it's extremely durable. It's very versatile and in the age of $1,000 smartphones, it is absolutely a value at that price point. It's something that's going to last for years. You know, there's many Bluetooth speakers. There's even some smart speakers out there that are a lot cheaper, but they're also not built to last for years. They're not going to get better over time with software. They're not part of a system. They haven't gone through the durability tests that we have. So this is for people that really recognize quality and quality products. This is for people that are into Sonos and understand what good sound, good experience, good quality is all about.

• 6:10Nilay Patel?

  And when can people get it?

• 6:12Speaker 02

  Pre-orders will start September 5th and you'll be able to buy it in store September 24th.

• 6:16Nilay Patel?

  September 24th. Okay, so just a few weeks away.

• 6:18Speaker 02

  Yeah.

• 6:18Nilay Patel?

  And you're going, you're going all out.

• 6:20Speaker 02

  We're going all out, going all out, the usual, all the places you can buy Sonos today, you'll be able to find a move.

• 6:24Nilay Patel?

  Okay, so let's talk about specifically, the last time you were on the show, I think I asked you a question everybody asks, like, give me an outdoor speaker. And this thing is ready to be an outdoor speaker.

• 6:33Speaker 02

  Yes.

• 6:34Nilay Patel?

  Do you anticipate that, you know, the aftermarket is going to build weird mounts and stuff and people are just going to hang them outside?

• 6:39Speaker 02

  Absolutely. Absolutely. You know, we worked with Sonance to introduce architectural and outdoor speakers earlier this year, and we've seen some good return on that business, but I do think there will be people that, there's already people that put Sonos One outside, or have put Play Ones, have put Play Fives outside. There's different accessory companies that create those kind of great brackets and different things to make it happen. So no doubt, there'll be people that create those as well. But I think for most customers, they'll put it on the, you know, the included charging cradle that comes with it and have a place for it in the home and then carry it outside when they want to go in the backyard and listen to great music, or if they want to take it to the beach or park or what have you. I think, I think that'll be the kind of majority use case.

• 7:18Nilay Patel?

  Yeah. And then you also announced the 1SL, which is basically an update to the Play One, no microphones.

• 7:23Speaker 02

  Yeah. So we introduced two things. One is the 1SL, which is like the Sonos One, but removes the microphones. And we'd heard from customers that were uncomfortable with having microphones in their home. And I think you guys do a lot of writing on this. There, there are a set of customers that look at it and say, look, I just don't want microphones in the house. And, and we want to respect that and we want to give people the freedom to choose a product that does have microphones or doesn't. So really, when you look at it, you have the Sonos One at $199, which has the microphones and you can use Alexa or Google Assistant if you choose. And then there's the 1SL, which for $179 has no microphones in it and is, is a good option for somebody that doesn't feel comfortable with microphones in their home.

• 8:03Nilay Patel?

  And then you announced one other product, which is the Sonos PORT.

• 8:05Speaker 02

  We did. So the next generation of our Connect product called PORT. So last year, we introduced the next generation of our Connect Amp product called AMP. This year, we're introducing the next generation of our Connect product called PORT. And so PORT is really for people that want to Sonos-ify their receiver, right? Or their turntable and really connect an existing component. Into the Sonos system. It's also for our very vibrant home installer category. So as they do new home installs, the port will find a place in a lot of those installs to power some of the inceiling and wall speakers that people find in homes today and use Sonos to control.

• 8:42Nilay Patel?

  Like powered.

• 8:43Speaker 02

  Exactly. They have to be powered speakers. Yeah. Cause of obviously if they don't have power to the actual speakers, then they'll use AMP instead.

• 8:49Nilay Patel?

  Yeah. So you've got kind of a big range of products here, right? All the way from the AMP and the port, which seem very targeted to installers. Some extreme nerds like me have these products and it has to, that's fine, but like they seem very targeted towards a professional application. People hire people to come build stuff in their house or their workplace. Then you've got sort of the consumer range of products. And then the very top end, there's like yet more kind of integrations doing with other people, right? Where do you think the move sits in that? Is that at the top end of your consumer portfolio? Is that a broad-based consumer product? Everyone should buy it? Like, how do you think about where this product sits?

• 9:28Speaker 02

  I think it's an interesting time right now in the whole smart speaker world because we've seen a couple of years of the preponderance of these PUX at $30, things like the Echo Dodd or the Google Home Mini. And we've seen a preponderance of pretty inexpensive Bluetooth speakers. So there's been a lot of speakers that have kind of gone out into the world over the past couple of years. And what I'm hoping is that's kind of set the groundwork for something better that people might want to turn to and even augment what they have, right? So if you have an Echo Dodd and you've used Alexa and you like it and you're listening to some streaming music at home, Move is a great option to then be able to bring a better sounding speaker into your home, fill other rooms with music, and now take it and make it portable. And so I'm hoping, and really we've seen the results in our business over the last three years.

• 10:13Speaker 02

  We've driven great growth in the face of everybody and their brother jumping into the smart speaker category. We think that, you know, Move is a well-timed product because it is so versatile to really help address this set of people we think are ready to move to something better. And so I do see it as, one, it's something that I'm confident, given customer feedback, that many, many, you know, of the nine million Sonos households are going to buy. But I'm really excited to see how many new Sonos customers we can bring into the family based on their experience with other speakers and now looking for something of quality, right, over time. So.

• 10:49Nilay Patel?

  And so the big sell is for Sonos overall is you have the system.

• 10:52Speaker 02

  That's right.

• 10:53Nilay Patel?

  Right.

• 10:53Speaker 02

  That's right.

• 10:53Nilay Patel?

  It's the cloud-based music system. It can work with virtually any service.

• 10:57Speaker 02

  Yep.

• 10:57Nilay Patel?

  It can work with both voice assistants. Is that something that you're thinking about expanding out even farther over time? I mean, you've got a licensing deal with IKEA for their line of stuff. You've expanded it a little bit. You work with some receivers and things.

• 11:10Speaker 02

  Yes, yeah.

• 11:11Nilay Patel?

  At the other end.

• 11:12Speaker 02

  Yep. Sonant's for some in-ceiling and the architectural speakers, the outdoor speakers. And so certainly, as we think about the freedom of choice for customers and trying to do the right thing by customers, trying to make sure there's a lot of different options for a lot of different needs is really important to us. And so you raised IKEA, and that's a perfect example where we wouldn't be able to go to those price points and we wouldn't be able to, you know, develop those form factors in the way that a company like IKEA could, given their heritage in building awesome furniture. And so that was something that we worked on really closely to make sure that it was going to be complimentary to what we do in our core portfolio, and it leverages all the great software and the best parts of Sonos as we do that.

• 11:53Speaker 02

  You know, we're going to look for more partnerships like that, and we want it to be inclusive of all the music services that are out there, all the voice services that are out there, and continue to make sure that people can choose to use whatever it is that they want on Sonos. Not, you know, not try to force people to use one particular service or one particular assistant. The people are investing in these products for years, and we want to make sure that they feel like they can be using any service that they want over that period of time, because we all know things change, right? And these are, these are significant investments people are making, and so we want to make sure that they can get the most out of investing in Sonos.

• 12:29Nilay Patel?

  Do you know what the split between Alexa and Google Assistant use is?

• 12:32Speaker 02

  We've just recently launched Google Assistant, and, you know, we've seen it really take off in the countries where Google Assistant is in the lead, but both are doing really well. So I think for us right now, it's been great to have both. And I think what's interesting in the voice space is that it's still, like, the number one use is starting music and getting music playing, and right, so it's really relevant to what we're doing. But it's going to be interesting to see where voice goes over time, because we haven't seen it really take off in, I think, the way that other people had, had thought as we saw voice rise and thought, is this the next kind of like smartphone, right? And next mobile phone kind of OS, but it's primarily right now being used for music from everything I can see.

• 13:16Nilay Patel?

  Music and kitchen timers.

• 13:18Speaker 02

  Yes, timers, exactly. Yes, you're right.

• 13:21Nilay Patel?

  It's funny, because I have it all set up in my house where I could ask Google to like turn Netflix on my tel- and I know, we just never do it. It never even occurs to us that we should do it.

• 13:30Speaker 02

  Yep.

• 13:31Nilay Patel?

  It's always just after we've started the Netflix show.

• 13:33Speaker 02

  Yeah.

• 13:33Nilay Patel?

  I could have.

• 13:34Speaker 02

  You could have done it.

• 13:34Nilay Patel?

  And I didn't. And we're never going to. And I think it actually has a lot to do with, um, with music, you kind of get the full library.

• 13:41Speaker 02

  Right.

• 13:41Nilay Patel?

  So there's like a guarantee, I'm gonna say, hey, Google, play the song, and it will likely happen, or some extremely strange cover will play.

• 13:48Speaker 02

  From what I've seen, a lot of people want to get a station or just some music going, and they're okay generally if it's in the right vicinity. And so often, people will get it going with voice, and then if they really want to drill down and tune it, they'll grab their smartphone and they'll be able to open up the app and go a little bit deeper, if you will. People are, I haven't seen people that are really gonna spend a lot of time asking for particular albums and tracks and going deep on it. Like, they'll want to look at something as they go through that. So what we've really found is it's helped with time to music. You know, you just come in and you want to get the music going. It's a good way to start it, but if you're gonna go deeper, you, we usually want to use the app.

• 14:25Nilay Patel?

  Yeah. So there's one voice assistant that you guys don't support, which is obviously Siri. You do support Apple Music, which is a rarity in this market.

• 14:34Speaker 02

  Yeah.

• 14:34Nilay Patel?

  Have you talked to Apple? Are they just like, look at this HomePod, and then you have to like not smirk at them? Like, how does that work?

• 14:41Speaker 02

  Well, I think it's a great sign that they worked with us on both Apple Music and AirPlay, right? So I think our implementation of AirPlay has been fantastic. I think they're very pleased with it. They're pleased with our implementation of Apple Music. You know, we're open to all voice assistants that are out there, and I think they want to make sure that they clearly have a great voice experience before they would look at, you know, putting it in other products. Um, I think is the perspective right now. So we're just gonna continue to focus on working closely with them on everything we do and remain open to putting Siri on the platform over time. But there's no voice service that I would say we wouldn't want to put on the platform over time. We just got to make sure that we're, we're being thoughtful about how we're building the tools to allow developers to do that to.

• 15:24Speaker 02

  And then obviously, the third parties have to be willing to do it, so.

• 15:27Nilay Patel?

  Yeah. And so you're saying the holdup is Apple is- Saying not yet.

• 15:30Speaker 02

  Yeah, I think you've seen at this point, we haven't seen it appear anywhere, but we're ready, when they're ready, to want to put it on some.

• 15:37Nilay Patel?

  Do you think they have to do any like major shifts to the architecture to support it?

• 15:42Speaker 02

  I don't think so, based on the work that we've already done with Amazon and Google. I feel like we're probably in a pretty good place in terms of being able to implement other, other voice assistants at this point, but you never know until you get into it.

• 15:54Nilay Patel?

  Yeah. Are there other ones, besides here that you're looking at?

• 15:56Speaker 02

  I think in China, there's specific voice assistants that, that are important to the local market, but right now, on a global basis, it is Google Assistant and Amazon Alexa that are the ones that are most relevant to the customers that we serve.

• 16:11Nilay Patel?

  Yeah. So, to support the voice assistants, you had to put mics on the speakers. The Move is the first time you guys are using those mics yourself to do auto TruePlay?

• 16:19Speaker 02

  That's correct.

• 16:20Nilay Patel?

  Just describe how that works.

• 16:21Speaker 02

  Yeah, so TruePlay was a technology that we developed that actually tunes the sound to the room that you're in. And in the first generation, we actually had the customer walk around the room with a phone, and we were measuring the room, basically, based on it emitted a sound, and we were actually measuring the room to the phone as you walked around and where you would listen to. What we've done now is actually we're using the microphones that are in the product to bounce sound off the area that's nearby and be able to take a measurement and give ourselves an idea and a virtual map of basically the space you're in to then tune the sound to where you are. And so, the nice thing with Move, and you'll see this in some of our other products over

• 17:02Speaker 02

  time, is the ability to make the sound really fit the space you're in. And this, this is really important as we think about bringing the sound experience to different form factors and potential partnerships in the future, because it just continues to give us the flexibility to not be trapped in a traditional speaker form factor, which to me is super exciting, because now you see with IKEA lamp, but you could foresee a table, right, or a dresser, or a panel on a wall, or certain things, you know, and there's always the laws of physics around pushing air and creating the right kind of sound profile we want, but it just frees us up from traditional speaker form factors, which is so exciting.

• 17:39Nilay Patel?

  So can you bring Auto True Play to your other products? You've talked about it before. Actually, I think we talked about it before.

• 17:45Speaker 02

  We did, we did, yeah.

• 17:45Nilay Patel?

  Do you anticipate that it's going to come to existing products?

• 17:48Speaker 02

  Yeah, I do anticipate, you know, we're working through which ones based on the mics that are in there and what we can do. But you know, one of the promises of Sonos has been it always gets better over time. And we try to, we try to surprise people in a positive way on that front. And so you can expect to see that in other products over time.

• 18:03Nilay Patel?

  So it seems like one of the things, and this gets to what I really want to talk about, which is how you've accelerated the culture of Sonos and the product cadence. But it seems like one big thing that has happened as I look across your product portfolio is that you guys are kind of reusing a lot of the core stack, right? From product to product.

• 18:21Speaker 02

  Yes.

• 18:21Nilay Patel?

  So what parts of the Move are similar to other things? I mean, is this like all just a bunch of modules? Or are you like tuning all individually? Like, how does that work?

• 18:30Speaker 02

  So, so as you think about the One and the One SL, obviously we've, you know, we've reused quite a bit there. And we actually took, for our work with IKEA, we took what we'd learned and created a system on a chip effectively from our Play One as we went through and did that. With Move, it's a little bit different. We, we, obviously Bluetooth is new, but we took what we were using from Wi-Fi from the One. And we also use the chipset that we had been using with the One in that product to be able to do the multiple voice assistants, right? And be able to deliver that kind of experience. We've invented the battery part of it, but we went into it. And we went into Move thinking we're going to do multiple products based off this architecture.

• 19:12Speaker 02

  And there's both a hardware aspect to that as we think about the processor, the memory that's in there. The antennas are going to be different in every product. Obviously, the amplifiers, the tweeters are going to be different as we go through each product. But as we think about that, we being more thoughtful than ever of how do we create an architecture that we can reuse? And that goes for software as well. So, you know, if, if we have something that we can reuse in other products, that just helps with the acceleration of the product development timeframe. So we've been more thoughtful about that. And Move helps open the door to other products in the future outside the home as well as you might imagine.

• 19:47Nilay Patel?

  Other products outside the home, you say? What might those be?

• 19:50Speaker 02

  Well, I look forward to coming back to the Vergecast to talk about those other products in the future, but look.

• 19:54Nilay Patel?

  When, we should just book that now. When do you think that will be?

• 19:56Speaker 02

  We think that there's a lot of opportunity to bring unique experiences that are relevant to the Sonos system. And with everything we do, we want it to be something that's additive to the system. And there's, you know, there's some unique experiences in existing categories that we think we can deliver. And so we're super excited about what the future holds around that. But of course, I'm not going to talk about those today.

• 20:19Nilay Patel?

  Is it headphones? It's a dead silence. He's just drinking the water. Let's just say it is. Is that something that you guys are thinking about?

• 20:26Speaker 02

  There's no category of audio that I don't think we want to explore. I mean, ultimately, you know, I think the Sonos experience, what we bring around, sound, easy experience, freedom of choice, is applicable to everything across the audio category. And that's one of the things we've changed is our ambition is beyond the home, right? And really, it's to be the world's leading sound experience company. And it's why we're both opening the platform and then also going beyond the home is because we believe we can do some things that others can't in these different spaces. And so there's no, I don't want to restrict our innovation and our thinking in any category. We should be looking at them all. And I think that's one of the most exciting things for our people is exploring all the opportunities that exist

• 21:11Speaker 02

  in the audio space because we have spent so much time creating a great system and developing wireless technologies, developing software and patents around not only wireless, but as well, cloud and connectivity to the cloud that I think are going to be applicable in the future across many categories of audio.

• 21:32Nilay Patel?

  So that's the thing I really wanted to talk about because I think we have a lot of listeners who work at companies, want to run companies, think about how they should run their teams. You took over as CEO of Sonos. And one thing, and we were talking about earlier today, you've talked about before, is increasing the product cadence, moving a little bit faster. It seems clear that Sonos as a company, as a culture, did not want to make a Bluetooth speaker for a long time. You're here with a Bluetooth speaker. Talk about how you actually affected that change.

• 22:01Speaker 02

  Well, it starts with having had an amazing founder who, when he passed the reins, when John McFarland passed the reins to me, I asked him, I said, you know, stay on the board and you can, you know, and stay involved in terms of where it was. And, you know, John has now started two successful companies, software.com and Sonos. And John said, look, you're the right person to take us into the future and you're going to want to make a series of changes, which I may not agree with, and I will get in the way. So I'm going to step off the, you know, I'm going to step off the board and I'm going to completely step out of the company and I'll always be there, you know, should you need any advice or just want to use me as a sounding board. But you, you need to make the changes you think to get us to the next stage. And so it started there. And he was so right, because

• 22:46Speaker 02

  even a month later, we were going through a number of changes, which I knew, you know, were pushing the organization in an uncomfortable way. And one of those things was around the acceleration of the product roadmap. So there was really a bias to action and this drive to boldly innovate. And so what, what I really tried to do with the team, I got the senior leadership team set. So we hadn't had a stabilized senior leadership team, got that team set, and I really worked hard with the product team on unleashing a lot of innovation that was there. Our, we have the most incredible product team in the world and they have amazing ideas. And what I tried to do was just create a culture and a system where it's okay to

• 23:27Speaker 02

  talk about these ideas, bring these ideas forward and look at what's next. And culturally, there were some sacred cows around things like Bluetooth. And that was important to get us to the stage that we were at that point, but it was holding us back from the true potential of what I think we have for the future. And so that was one that we had to work through as a team. And so

• 23:49Nilay Patel?

  What was that? Tell me about that conversation.

• 23:50Speaker 02

  Yeah. So there was a lot, a lot of conversation internally of, and debates and yelling around, we are never going to do a Bluetooth speaker. Bluetooth is, you know, an explicit, you know,

• 24:01Nilay Patel?

  I think a lot of Vergecast listeners, their dream job is to be in the meeting where people are screaming at whether or not they're going to make a Bluetooth. I'm going to be honest with you, that's sort of my dream job. I'm just getting like a piece of it.

• 24:11Speaker 02

  You know, and so the greatest thing is that there's a lot of emotion and a lot of passion around it and around these kind of things. But if we go back to what we're really trying to do, which is serve the customers, then, you know, you start to get over the religion around particular technologies and look at how can you, how can you make experiences on those technologies better, right? And what can we do uniquely that others can't? And look, we have always bit off engineering challenges that are super hard and that many others would never bite off, like trying to build the platform that's going to support all the streaming services. People thought we were crazy. People thought we were nuts to try and do multiple voice assistants and now others are trying to do the same thing. So we've always bit those things off.

• 24:52Speaker 02

  And so when it came to Bluetooth, part of my position was we have done much more difficult things. We can create a really good experience here and we will make it better than most Bluetooth speakers out there just by nature of the fact that we know what we're doing when it comes to wireless and there's some things that we can do. And so the, and then of course, like as we get into it, the team wants to create something awesome. And so they're doing Bluetooth tests, which are well beyond what I think most companies would do to make sure that it's going to be a great experience as you go through it. But there was a lot of passion getting through it. And look- What was the big argument against? Just that it would never pass the test of somebody leaving the party and like you'd lose the music. We never wanted the music to stop. And so in a situation where somebody walks too far away and all of a sudden the music

• 25:37Speaker 02

  stops, that's like a really disappointing experiential thing. Or you may have had the challenge where sometimes it doesn't connect properly to a particular product. You may, you may, you may have had that experience. And so how do you reliably make sure you have that connection and do some things to make sure that it's going to be a little more reliable than people are used to? And you're, you know, you're not going to get it to the reliability that we want over Wi-Fi. But I'd say a little bit more of it just becomes cultural inside a company over a period of time when you're fighting against something and now all of a sudden it's like, okay, we're going to actually use this. That's a lot of cultural weight to work through and it just takes time. It just takes time. And part of it is also giving people the permission to make a mistake and fail as you go through it. So, you know, Doesn't have to be perfect as we go through it.

• 26:22Speaker 02

  We're going to get through this together as we go explore it. So it just becomes a lot of conversation and debate as you get through it. But it's one of those things where there are a few times. So I had really laid down the line and this was one of those things. I think that John would have disagreed with, which was we are going to do at least two new products every single year. And that was very different for a company that had introduced one new product over the past two years before that. Right. So really changed the cadence. And there was a lot of questions of, hey, does this mean we're just going to ship something that's not very good? And I knew inside the company, given where our quality bar was, that that was never going to be a problem. Because we have such amazing people that that hold the quality bar so high

• 27:06Speaker 02

  that, you know, we could come down quite a bit and still be the best in terms of where we were. So we weren't going to sacrifice that quality. And I really feel now, looking back, you know, two years later, that I was really just unleashing like all of the people inside the organization, giving them the permission to do what they already wanted to do. Because all of our, you know, product development people, they want to ship great products and they want to get more into the world and they have really strong views on amazing new things that we can do. And so it was really giving them that permission and then breaking through the sacred cow of Bluetooth. And the other one was that we are a hardware company and all we will ever do is build our own products. Right. So when it came to the IKEA side of the equation,

• 27:48Speaker 02

  similarly, that was a sacred cow of this notion of working with another company to build a speaker was something that, well, Sonos wouldn't do that. And, you know, having had my experiences that I did at BlackBerry, I'm very careful about thinking about things that we will or will not do. I think it's worth exploring many different possibilities as you think about the capabilities you have in an organization. So it was something where we spent a lot of time with IKEA upfront and they didn't come in with a preconceived notion. They didn't tell us what to build, you know, some partnerships, people will approach it in that way. They didn't have a fully formed opinion. We didn't either. We looked at the customer sets and we looked at some concepts that we had together. And we said, okay, like, let's try this together.

• 28:32Speaker 02

  And I said to the company, this is worth exploring to see if there's something here. We have an amazing system and we have some technologies and capabilities which can help. IKEA deliver products that will be part of the Sonos ecosystem and I think bring new people into the Sonos family. So let's give this a shot. And that had, you know, a lot of angst around it early on, a lot of people uncomfortable. But I'll tell you, you know, a month into it, people are really excited by what's been produced. And, you know, the engineers that worked on it were very happy at the end of the day with the sound that you get out of the two products that IKEA has made. And so I, I'm glad you

• 29:14Speaker 02

  raised this because it's a thing that I am most proud of is the ability for the company to grow and evolve from where it was is everything. You know, as we think about the decades ahead and we think about where we're going to play and we think about outside the home and opening up the system, I am just so excited about our roadmap and the possibilities that exist. And I'm so proud of the team for having taken the chance to look at doing some things differently.

• 29:40Nilay Patel?

  So it seems like you've accomplished a lot, but just like very concretely, it seems like one thing you've accomplished is there's now sort of a core hardware platform that's extensible in various ways that allows you to increase the cadence of product launches.

• 29:54Speaker 02

  Correct.

• 29:54Nilay Patel?

  By the way, two a year is, we're gonna, we're gonna hold you to that now. It seems like you've obviously changed the software stack to allow for multiple systems to address that series of new products. Because that's changed even since I started having Sonos.

• 30:07Speaker 02

  Correct.

• 30:07Nilay Patel?

  That's changed pretty dramatically, right?

• 30:08Speaker 02

  It has, it has.

• 30:09Nilay Patel?

  And then you've started licensing the software.

• 30:12Speaker 02

  Yes.

• 30:12Nilay Patel?

  And some of the hardware development.

• 30:14Speaker 02

  Correct.

• 30:14Nilay Patel?

  To a partner like IKEA.

• 30:16Speaker 02

  Correct.

• 30:16Nilay Patel?

  And that's like a new line of revenue.

• 30:18Speaker 02

  It is.

• 30:18Nilay Patel?

  A licensing line of revenue.

• 30:20Speaker 02

  Yeah.

• 30:20Nilay Patel?

  Very few companies, I'm gonna refer to your like BlackBerry roots here, very few companies have ever managed to run a licensing business in parallel with their, their first party hardware business.

• 30:32Speaker 02

  Mm hmm.

• 30:32Nilay Patel?

  The only one I can think of that's ever done a great job of is actually Microsoft, right? Panos, Panay, runs Surface, they make the best Windows computers and then, I don't know, like everyone else makes other Windows computers, right?

• 30:43Speaker 02

  Yes.

• 30:43Nilay Patel?

  Do you think about that challenge?

• 30:45Speaker 02

  So ironically, I just talked to Panos yesterday. So.

• 30:48Nilay Patel?

  Surface, Sonos confirmed.

• 30:52Speaker 02

  He has been, yeah, I think he and I view some of those things very similarly in terms of like creating great products, but also a system in which partners can thrive as well. And you're right that I think there haven't been a lot of companies that have been able to pull it off, but we've been thoughtful about the partners that we're talking to and where they fit in the portfolio as well and why we exist in the categories that we exist. So we're attempting to do a lot, but it's all centered around the systemness, right? And it all comes back to the core software that we have. And like you said, we've accelerated that software as well. You know, one of the things that has frustrated some of our customers is the pace at which we've accelerated on the software side. So there's a lot more updates, right, as we go through, a lot more features and now

• 31:36Speaker 02

  automatic updates, so they don't have to be bothered by that all the time. But we've certainly accelerated that in a big way, and I think that helps create the foundation for everything that we're doing. And so I think we can pull it off if we're thoughtful about the partners we're bringing into the ecosystem and we're thoughtful about the products that we're introducing. Remember, we're not moving to a model which most traditional consumer electronics companies are, which is we're going to introduce, you know, a set of products and then we're just going to refresh them every year. We do not do that. We're not interested in that. We don't find that very exciting, quite frankly. We're building products that last five, 10 years, right, as we go into this. And so we have to be thoughtful about that software platform and we have to be thoughtful about the partners that we're bringing into the ecosystem because another one of the lessons of BlackBerry is it takes you, you know, a long time to build up that trust

• 32:21Speaker 02

  with customers, but just overnight you can actually lose that trust with a bad product.

• 32:29Speaker 03

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• 33:30Nilay Patel?

  So, when you think about your business, you've got nine million customers, you said, in the ecosystem. There's obviously just an enormous amount of headroom there, where you can just like address all kinds of new people.

• 33:41Speaker 02

  Yep.

• 33:42Nilay Patel?

  Eventually, you run into an Apple problem where you've got everybody with a phone, and now you're like...

• 33:49Speaker 02

  I wish I had the problem.

• 33:50Nilay Patel?

  So you're saying you're not even thinking about that?

• 33:52Speaker 02

  You know, I just, I find it so interesting that people look at it as the Apple problem when they have, you know, close to a billion dedicated customers, right, that love their stuff and are willing to buy anything they introduce. I would love to have that problem. So, we have plenty of headroom in terms of, you know, what we see out there today. And I think, look, like with IKEA, it's a great stepping stone where maybe a college student gets their first Sonos experience through the bookshelf or the lamp speaker, and then when they move to their first apartment, they're gonna get a beam, right, for their TV, and now they'll get a move to listen outside, and they're using the Sonos app. So, they can, we can grow with them and move along. And I just, so I just see a lot of

• 34:35Speaker 02

  opportunity around that as we think about the future.

• 34:38Nilay Patel?

  So, you're saying you're not interested in sort of the extremely in-fashion recurring revenue bundle. You're not gonna make like Sonos pods where like make your speaker go? You need like a $30 a month? Because you see everyone else is doing it, and you are, you are not, even though you've committed to... Sort of ongoing carrying costs of our customer, right? You're going to keep pushing updates for old products. You're going to keep allowing them to get new features.

• 35:01Speaker 02

  Yep.

• 35:01Nilay Patel?

  You're not interested in that sort of recurring.

• 35:03Speaker 02

  Look, we, I think it's so important as leader of the organization to set a tone that we're willing to explore anything in the world that we're focused on, right? So in, our ambition is to be the world's leading sound experience company. If there is a service that would help us achieve that ambition that customers are going to love, then we should create that service. But I also think that there's a lot of partners out there that are doing great stuff. And we've had a great relationship with the streaming service companies, now the voice assistant companies, and we want to create a platform that enables others. But, you know, at the same time, I don't want to shy away from, you know, the potential that at some point there could be, you know, a service that we would offer, but right now we're really focused on the hardware.

• 35:44Nilay Patel?

  And you think that neutrality, that consumer choice aspect, that, I mean, that's obviously a selling point, right?

• 35:49Speaker 02

  Absolutely. That is, that commitment, especially in a world where there are some big companies that are fighting to put people into, lock them into ecosystems. Uh, I think that, you know, neutrality at the end of the day, that freedom of choice is everything because you're not making a short-term investment. You're making a multi-year investment. And if I'm making a multi-year investment in anything, I want to know that is going to support the services that me and my family will use over that period of time. And that's, I feel very strong about that commitment, and I know everybody at Sonos does.

• 36:21Nilay Patel?

  Was that part of the conversation on making the battery in the move removable? Because that's a very unique aspect of any product that we see nowadays. Like, I can't think of the last time anyone handed us a battery for our product and said, "We're going to sell the replacement batteries." It just doesn't seem to happen very often.

• 36:36Speaker 02

  I, I, I think, to be fair to the mobile phone companies, which, you know, which obviously I, I used to be a part of, I think it's very difficult with today's designs to actually make that happen and, and deliver the thinness and all of the things that they need. We are, in this case, blessed with a bigger form factor where it's a little bit easier to make that happen. But certainly, we're thoughtful about things like that and thoughtful about the fact that batteries do fail, and we want you to have this for longer than sometimes how long those batteries fail. So yeah, absolutely, we think about those things.

• 37:05Nilay Patel?

  All right, I'm gonna do it. So you've, you know, I know you know what's coming. But you had a product line that existed when you took over. We've, we've talked about it twice now. You have a, you've updated the core platform. It's very clear that Play One was replaced by a new Play One, Sonos One SL that has like the new platform in it. The Sonos Amp is like a new version of the amp with the new platform in it. The Sonos Port is the Sonos Connect with the new platform. I'm gonna keep going. And then you have the Play Bar, which continues to exist. When are you gonna update the Play Bar with all of the new, modern stuff?

• 37:41Speaker 02

  So the Play Bar, our high-end soundbar, the Beam sits, you know, we introduced last year, has been a key driver, you know, over the last year of growth and really is the number one soundbar by value share in most of the markets that we're in. Play Bar remains one of the top value share soundbars that are out there in the, our top five markets, which is 80% of our business. And so it's something that customers continue to love. And, you know, we have to strike the right balance of which products are we going to go and create the next generation of versus go outside the home versus like open to partners and the ecosystem. And so I think, you know, you'll get to see that balance,

• 38:26Speaker 02

  you know, over the years and you can, you can weigh in, you can weigh in on that balance.

• 38:30Nilay Patel?

  The opposite of answer. You drew like a four quadrant chart full of question marks.

• 38:38Speaker 02

  There's, there's a whole bunch of new things that we're working on. We have to get that balance right. And so I think that is something that we will try to balance, but it's not something that is as easy as it used to be when it was like, okay, you know, every five to 10 years, we'll go work on this thing or that thing. And so instead, we're faced with some really hard, but good and exciting choices of going into this new category versus, you know, doing the next generation of what we want to do in the home. And so I'm just taking you through the thinking as we think through this. But certainly, we love the home theater.

• 39:15Speaker 02

  Theater business and what's changed about home theater and even that moniker feels you know like from 20 years ago as we think about it is that the nice thing and the reason I think Beam and Playbar have been so successful is bringing music back into the living room. Right. And so making it easy for people to listen to music on the same bar that they're enjoying their television has been a huge step back in the kind of world that we like. But there's some exciting stuff hoping, you know, happening in home theater too, like Dolby Atmos, like we've talked about before and some other cool stuff. So there's definitely room for more innovation there.

• 39:47Nilay Patel?

  Not one of your newly inspired engineers is like, and like, can I just put the new stuff in the old form factor and ship it and we'll call it a day? Cause a lot of people would just take that. Right. Like a lot of people would just accept, like you, you quietly upgraded the Sonos one, right? There was a gen one Sonos one, a quiet update to a gen two.

• 40:05Speaker 02

  It was probably six to eight months after Playbar came out to Jaws Martin, who's our sound experience leader. There was just something in the sound on the Playbar that just wasn't quite right to him. And so through software, we made an update to change the sound profile to make it better. And so certainly we're actually always looking at like the changes that we need to be able to do that. But so, so all the products get better over time. But there's some, there's definitely exciting stuff in the home theater space that I think will require, um, will also require some new hardware, quite frankly.

• 40:40Nilay Patel?

  So the, the dream I have of like the updated Playbar and then like seven lamps surrounding me. Just like you can imagine, right? And then somehow you tie the lamps in and they're going off in orange with the explosion. I don't think I should be in charge of product development. I'm saying that I have a lot of dreams and this is one of them.

• 40:59Speaker 02

  The, the most fun part about leading Sonos and the hardest part is it quickly gets down to each individual's desire for what they want at home. Uh, our board meetings break into this, all of our executive team meetings quickly get to, now let me tell you about what I want. And so I, I love it. And at the same time, it's, uh, yeah, it's the challenge.

• 41:20Nilay Patel?

  Atmos standard could be like seven dot two dot lamp and it's mostly lamps. Just go, you're not knowing. I've never, this is the biggest eye roll I've ever received on this show. I think it's a great idea.

• 41:33Speaker 02

  Well, you know, with our software, you would actually be able to pull that off.

• 41:37Nilay Patel?

  See what I'm saying? You just need the core component. So actually, let me be a little bit more serious about this. You've announced one partnership with Onkyo and Pioneer.

• 41:47Speaker 02

  Yep.

• 41:48Nilay Patel?

  It's pretty basic, right? You can light up their receivers. They can do some volume sharing. Are you thinking that the next step there is to just integrate Sonos into one of those products?

• 41:57Speaker 02

  Yeah, there's a lot of legacy audio companies that are out there that I think need help around kind of getting to the next stage and bringing wireless and the system-ness into the picture. So I do think that that is a possibility in the future. And so we're open to that as well. Needs to fit and we need to balance it with like all our ambitions that we have of the new products. But yeah, I definitely see an opportunity there. Definitely see an opportunity. If we can help some of those brands as well, kind of move into the new, like the next era, I think that's a good thing. More customer choice.

• 42:29Nilay Patel?

  So I get, what I'm trying to like figure out is, yeah, okay, so old consumer electronics companies are not necessarily great computer companies. You guys are a pretty good computer company. Maybe you can just sell the platform to them. That's licensing business at the high end. But do you think there's room for you to go and actually attack that market directly?

• 42:48Speaker 02

  Um, you know, I don't, I don't see it as a kind of growth market. I think there's, uh, there's still a number that are sold every year, but it's to a very specific group of people that are looking for kind of a unique, um, you know, unique experience. And so I think in a market like that, we're better off equipping others to go pursue that and they can still get the benefit of the Sonos software and the system and all of those kind of things. As we think about something like Move, again, it is a much bigger audience I think it appeals to. And that's the kind of thing that we're looking at are these bigger audience opportunities that kind of play to our strengths. And so you, you know, that, the nice thing about creating some of these systems on a chip and then connecting them as part of the system

• 43:32Speaker 02

  is we can do those things without a lot of the heavy lifting of developing a new product. And yet it gives customers more choice. So for that case specifically that you raised, I think there's others that are really good at building those receivers and it's going to be a kind of, the kind of market that we enable versus build our own.

• 43:48Nilay Patel?

  Yeah. And so you think that's kind of the future of, you said the home theater is kind of a funny thing to say and it is like.

• 43:52Speaker 02

  Yeah, it is. Yeah.

• 43:54Nilay Patel?

  I see not so many people building those rooms in their house anymore.

• 43:57Speaker 02

  That's right.

• 43:57Nilay Patel?

  But I do see a lot of our audience. Saying, okay, we've, we've basically stopped going to the theater. We watch everything at home.

• 44:04Speaker 02

  That's right.

• 44:04Nilay Patel?

  Bought a 4K HDR TV.

• 44:05Speaker 02

  Yep.

• 44:06Nilay Patel?

  And there's one more set beyond just a beam. There's one more set of experiences you can add to that. That actually makes that really valuable.

• 44:12Speaker 02

  Totally. But, but the simplicity, the reason that we've been successful in it is bringing the simplicity to it. And by having a bar solution, by bringing the smart speaker aspects of having voice control, being able to play music, all of that has been important to simplifying that. And you're right. It is amazing to run into somebody that has bought a great new television and said, like, the picture's amazing, but I didn't even realize what I was missing from a sound perspective until I put a play bar or a beam underneath it. Right. And just like creating that experience. You had a sub, you had two, some of those ones is rears, and you've got yourself the kind of home theater experience that we all wanted, you know, 10, 10 years ago, but had to wire in and had to really like work hard to get. And so I think that's a great experience. I think it's only going to get better over time because

• 44:57Speaker 02

  the, the quality coming from some of the video companies as well is going to get better and better. And I think that's an interesting opportunity as we think about the future and our future products that play in that space.

• 45:08Nilay Patel?

  Yeah, I think it was Disney just announced this weekend that Disney Plus is for simultaneous 4K streams and Atmos. Netflix is doing it more and more.

• 45:16Speaker 02

  Yeah, exactly.

• 45:17Nilay Patel?

  I think Apple's pretty committed to it at this point.

• 45:18Speaker 02

  Yep.

• 45:19Nilay Patel?

  So it seems like on the video side, I think we recommend like a $500 TCL TV most often, like a 4K HDR TV. But we, I don't think that we've settled on definitely just this sound bar because everyone's like sound environment is so different.

• 45:32Speaker 02

  Totally, totally. And, and I think you're right about where the streaming companies are going. And we want to make sure streaming video, I should say specifically as we go through that because it's not as applicable to music. But I think there's going to be some really good opportunities there. And I think the sound is just going to get better and better for a home theater.

• 45:48Nilay Patel?

  All right. So last question or two. What, what's next? Right? You've, it seems like you kind of rebooted the culture of the company. You've increased the cadence. There are a lot of new products. We talked about three new products today.

• 45:59Speaker 02

  Yes, we did.

• 46:00Nilay Patel?

  Are, is that pace going to continue? Are you, are you here?

• 46:03Speaker 02

  I think it's a balance of making sure that we've got a portfolio that appeals to all of the customers we're trying to reach. And, and yet it's one that we're not falling into, you know, the trap of trying to. Drive almost four stops less and trying to refresh every single year because it just, it doesn't make sense as you think about the customer and you think about the long term. And so for me, it's really balancing where our efforts are going around our own portfolio and all these ideas we have on our roadmap as we think about the next three years and then some of these partnerships and these opportunities that are emerging there. So that'll be, that's the thing that we kind of work through right now is, is how do we balance our efforts around both of those things because we have great opportunities on, on both sides of the scale. So.

• 46:48Nilay Patel?

  Do you think in this moment of just sort of massive consolidation around the industry, like when we saw you at the event earlier, first thing you said was still here, still independent.

• 46:56Speaker 02

  Yeah.

• 46:57Nilay Patel?

  I mean, that seems like a really big value for you. Is that getting harder? Is it getting easier as sort of like the little competitors drop away or get folded in? What comes to mind is Eero, right? Which is a company we loved. They were like run by a great team. They just like couldn't make it. They're obviously a startup and you guys are not a startup, but it just comes to mind. Like here are some companies that are making a product people love and they have obvious growth opportunities. Everyone can see them. It was still too hard. You guys are obviously in a different position and you're, you're doing much better. You're better situated. Is it getting harder or easier to be independent?

• 47:30Speaker 02

  Um, you know, I'm a big believer, I think it was Jim Collins that had a quote about, uh, you know, it's, it's more about, you know, what you do to yourself than what the world does to you. And ultimately I think we work hard at having healthy relationships with the Amazon, Apple, Google, all the players that are out there. And so I don't know if I'd say easy or harder. I just think that it's, it's kind of the world that we live in and we have to navigate that. I think thankfully we're at a scale and we're, we have financial strength to be able to work through it. And I think a customer base, which a lot of these companies look at and want to, you know, get their services in, which is really important. I think if you're a subscale player in this day and age, you

• 48:14Speaker 02

  just don't see any other companies, right? That have really come up on the hardware side that are successful right now. And so I think we're very unique in that way, but I'm also a big believer that it's the right thing for the customer and that ultimately if you're doing the right thing for the customer, which being neutral and being able to offer all these services absolutely is, that you will be successful over the long term. And so, you know, right now I feel good about where we are and where we are with our partnerships. And yeah, so.

• 48:45Nilay Patel?

  All right. Well, Patrick Spence, thank you so much for coming by The Vergecast. I appreciate it. When do I get my playbar?

• 48:51Speaker 05

  You already have a playbar.

• 48:52Nilay Patel?

  I don't have a playbar. No, I got rid of that thing. Optical, come on. When do I get a new one?

• 48:57Speaker 05

  You know, the Beam has HDMI and voice.

• 49:00Nilay Patel?

  I thought I would try it at the end.

• 49:02Speaker 05

  And it came out last year.

• 49:03Nilay Patel?

  I thought I would try it one more time at the end.

• 49:05Speaker 05

  But thank you for having me.

• 49:05Nilay Patel?

  There's gotta be one engineer at Sonos, and she's like, yep, he finally asked the playbar question.

• 49:11Speaker 05

  Note to Sonos all, do not talk to anyone named Nilay that sends any messages in.

• 49:17Nilay Patel?

  I'm just trying to give someone hope. Someone cares about you, playbar team. All right, Patrick, thank you so much.

• 49:23Speaker 05

  Thank you.

• 49:24Nilay Patel?

  All right. My thank you to Patrick Spence, the CEO of Sonos. Sonos move coverage all over theverge.com. Go check it out. We've got some exclusive photos of that speaker, which is pretty cool. We'll be back on Friday with a chat show as usual, on Tuesday with the interview show, and on and it goes. I really appreciate your feedback. Tweet at me, I'm at Reckless. Would love to know who you want me to interview, what you want me to dive into. I take it all to heart, so hit me up, let me know. We'll see you next week.

• 49:52Speaker 06

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