What if Apple bought Sonos? The rumor has been floating for a while. As recently as June 2020, Sonos's stock surged by as much as 22% an analyst predicted that Sonos's stock could surge by 130% if Apple were to acquire them.
Apple and Sonos share a lot of common interests. Both have been make high-end and well-design products that tie their customers into tight-knit-yet-binding ecosystems. They both have a healthy mistrust of Google and Amazon. In fact, Apple started selling Sonos speakers in its stores earlier in 2020, which just so happened to be the same day that Sonos publicly sued Google and accused Amazon of stealing its proprietary technology.
But the prospect does raise a few questions.
Could Apple afford to buy Sonos?
This one's easy: yes. With over $200 billion cash on hand, Apple could potentially gobble up Disney if it wanted. And recently, Sonos has been a victim of its own success. Making high-quality speakers at affordable prices is a low-margin business. And after a change in CEO, Sonos has opened up its notorious closed ecosystem to work with Google Assistant and Alexa, and supports AirPlay 2, in a bid to expand its reach. It even has a portable Bluetooth speaker, something that would have sounded ridiculous five years ago.
Of course, it's far from doom and gloom at Sonos right now. Sonos has released three new products, the Arc, Five and Sub (3rd-generation), all of which have basically sold out everywhere due to popular demand. If anything, Sonos seems poised for a blowout quarter.
That would make it demand a bigger price from Apple, for sure. But the HomePod maker is assuredly salivating at those numbers.
What would happen to the HomePod?
In contrast to Sonos' latest slate. Apple's first smart speaker hasn't been quite as successful as the company probably hoped. It's a great-sounding smart speaker with some key advantages over any its competition speaker, but ecosystem lock-in has left it limited. If you don't have an iPhone or you subscribe to a streaming service other than Apple Music, like Spotify or Tidal, there's no compelling reason to buy a HomePod.
The result is that Apple commands around 3 % of the smart speaker market. Amazon and Google divvy up 50% and 30%, respectively. If Apple were to buy Sonos, it would climb to 10% -- and that additional audience would include a whole host of listeners that could potentially be drawn further into Apple's hardware and service orbit.
All the newest Sonos speakers currently support AirPlay 2, meaning you can easily stream music to them from your iPhone, iPad or Mac computer. But none support Siri, which is the HomePod's domain. For now, at least.
Even if it acquired Sonos, it's unlikely that Sonos would give up on the HomePod immediately. After all, it's still arguably the best-sounding smart speaker on the market. Plus, a long-rumored HomePod Mini may already be in the works. But one can imagine how the two lines might converge, with Sonos speakers potentially picking up Siri superpowers, and HomePods getting looped into the Sonos ecosystem.
Would Sonos lose its cross-compatibility?
If all that did go down, it seems unlike Apple would just flip off Alexa and Google compatibility right away. Apple bought Beats in the middle of 2014 and it took a few years before the big changes started to hit. It wasn't until late 2016, over two years after Apple acquired Beats, for it to release Beats headphones with Apple's special W1 chip.
With Sonos already a household name, Apple would be wise to not immediately anger the existing Sonos user base. But it would also be silly to not attempt to lure -- or prod -- them into the broader apple ecosystem eventually.
Does Apple even want to buy Sonos?
There is, of course, a chance that Apple might not even want Sonos. It already has its own speaker and potentially more in the works. And to buy Sonos is to step outside the walled garden that has so far served it quite well.
Apple's AirPods are far and away the most popular true wireless earbuds on the market, because they're built from the ground up to synergize with the Apple ecosystem. Sure, if you have Android device you could connect to AirPods using traditional methods, but if you have an iPhone and a Mac, you get so much more, like instant connectivity, automatic device switching and full compatibility with Siri.
There's a chance Apple is still set on the HomePod being the AirPods of speakers. But with its slower rate of adoption, that's a tougher row to hoe. The decision to buy Sonos probably depends on how quickly Apple is determined to make up that ground. And, of course, how keen Sonos is to sell.