Sonos Faces Price Hikes Amid Recovery Efforts
Amid ongoing efforts to regain its footing in the market, Sonos has announced a rise in the prices of its products. This decision comes in response to new tariffs imposed by the U.S. government, complicating Sonos’ plans for a turnaround.
Recently introduced tariffs include a 19% levy on goods imported from Malaysia and a 20% surcharge on imports from Vietnam. It's noteworthy that these tariffs have undergone adjustments from higher proposed rates earlier this year. Sonos primarily produces its audio devices in the U.S., apart from a few accessories and specialized speakers made in those countries.
Sonos' new CEO, Tom Conrad, highlighted during a recent earnings call that the company is set to raise prices on certain products. The exact products and new price points remain under evaluation. Conrad emphasized the importance of crafting a strategic pricing plan aimed at optimizing gross profit, indicating ongoing collaboration with manufacturing partners to manage tariff impacts.
Financial projections for Sonos indicate a tariff expense of approximately $5 million in the upcoming quarter, up from $3.5 million invested in tariffs during the previous fiscal period. These additional costs pose a challenge as Sonos strives to revive its reputation after past product issues.
Since a significant app update mishap in 2024 that crippled many devices, Sonos has been on a recovery journey. The company believes its software updates enhance the long-term value of its gadgets, although negative feedback on past updates persists.
No new Sonos products have hit the market since late 2024, amid challenges like the aborted development of a streaming video player. Looking ahead, Sonos’ product roadmap extends beyond 2026, but successfully enticing consumers will require navigating pricing and performance expectations.
Conrad expressed determination to regain lost momentum and accelerate growth moving forward. Meanwhile, the broader electronics industry anticipates price hikes due to similar tariff pressures, potentially cushioning Sonos from immediate consumer backlash.
