Sonos, a U.S.-based speaker maker, has filed IPO in the beginning of July. It could be the third-largest venture capital-backed IPO of this year, behind cloud storage service DropBox and electronic signature technology provider DocuSign.
According to the financial document filed by Sonos, the company had 19 million registered Sonos products in use as of March 2018, in 6.9 million households around the world. Its six-month net income ending on March 31, 2018, was US$13.1 million.
In the September 2017 fiscal year, the company sold 3.9 million devices and had a net loss of US$14.2 million, with US$992.5 million in revenues.
The company’s sales number is growing year by year, but it’s not flying rocket high. Its revenue in 2017 rose 10% from the year before.
Sonos highlighted the potential of the smart speaker market in its IPO document – indicating that 50% of web searches will be voice-driven by 2020. In a report published by Morgan Stanley in June, more than 70% of U.S. households are predicted to have a smart speaker with voice commerce features by 2022.
While rising smart voice applications present market opportunity for Sonos, it also has some risks. Although Sonos has the Alexa capability with its Sonos One and Sonos Beam products, Amazon holds the right and control of Alexa in the end.
“Our current agreement with Amazon allows Amazon to disable the Alexa integration in our Sonos One and Sonos Beam products with limited notice. As such, it is possible that Amazon, which sells products that compete with ours, may on limited notice disable the integration, which would cause our Sonos One or Sonos Beam products to lose their voice-enabled functionality,” said the filing from Sonos.
It’s the same for other voice assistants integrated in Sonos devices. Google could take the Google Assistant support away from Sonos any time.
Sonos has positioned itself as a company that makes speakers with great sound quality while providing an open platform for services. It owns the technology to make high-quality speakers, and works with various streaming music services and voice assistants.
In a recent interview with Wired, Sonos CEO Patrick Spence stated that Sonos’ creating its own services “won’t be the best interest of the consumer. “
For some consumer electronics, IPO did not give them a boost in market recognition. Roku, GoPro and Fitbit are some examples. How the public investment market will value Sonos as a speaker maker awaits to be seen.