Sonos CEO Patrick Spence said the new Ace headphones got off to a strong start and helped spur “year over year revenue growth” that slightly exceeded the company’s expectations as part of its third quarter earnings on Wednesday afternoon. But that success was immediately “overshadowed” by ongoing woes with the redesigned Sonos app.
The company is now delaying two hardware releases originally planned for later this year as it deploys an all-hands-on-deck approach to fixing the app. “I will not rest until we’re in a position where we’ve addressed the issues and have customers raving about Sonos again,” Spence said during the afternoon earnings call.
“We believe our focus needs to be addressing the app ahead of everything else,” he continued. “This means delaying the two major new product releases we had planned for Q4 until our app experience meets the level of quality that we, our customers, and our partners expect from Sonos.” One of those two products is almost certainly Sonos’ next flagship soundbar, codenamed Lasso, which I revealed last month. “These products were ready to ship in Q4,” Spence said in response to a question on the call.
He also went in-depth on the app issues and how Sonos plans to fix them. Spence remains adamant that overhauling the app and its underlying infrastructure “was the right thing to do” for the company’s future; the new app “has a modular developer platform based on modern programming languages that will allow us to drive more innovation faster,” he said.
But Spence also now acknowledges that the project was rushed. “With the app, my push for speed backfired,” he said. “As we rolled out the new software to more and more users, it became evident that there were stubborn bugs we had not discovered in our testing. As a result, far too many of our customers are having an experience that is worse than what they previously had.”
Last month, Spence issued an apology for the bugs, missing features, unstable system performance, and other problems that customers have encountered since the redesigned app first rolled out in May. Just this morning, a temporarily cloud services outage caused problems for some systems. Sonos has promised app updates every two weeks as it works to earn back the trust of its customers. The app is in a better place now than it was two months ago, but some features like queue management won’t be restored until the fall.
For now, Sonos is turning to some longtime experts for help. “I’ve asked Nick Millington, the original software architect of the Sonos experience, to do whatever it takes to address the issues with our new app,” Spence said. Sonos board member Tom Conrad is helping to oversee the app improvement effort and “ensure” things stay on the right track.
It also sounds like Sonos customers can expect some promotional savings in the coming weeks. “We are enacting programs this quarter to both support and thank our customers and partners for sticking with us through this period and turn their dissatisfaction to delight,” Spence said. Those programs will last for at least six months through fiscal Q4 and Q1 of 2025.
