Will Spotify or Apple Acquire Sonos?

Audio equipment manufacturer Sonos is facing growing speculation about a potential acquisition following a recent leadership shakeup and declining market value.

The company, known for its high-end wireless speakers, has seen its stock price plummet, with its market capitalization now hovering around $1.7 billion, a significant drop from its pandemic peak of over $5 billion. The departure of CEO Patrick Spence and Chief Product Officer Maxime Bouvat-Merlin last week has intensified discussions about potential buyers.

Bloomberg’s Mark Gurman points to Spotify and Amazon as the most likely suitors, each offering unique advantages.

• Amazon: Gurman believes Amazon is “the most natural fit,” especially with the recent appointment of former Microsoft executive Panos Panay to lead hardware development. Acquiring Sonos could significantly bolster Amazon’s Echo device lineup with premium audio technology. However, regulatory hurdles, similar to those faced during its attempted acquisition of iRobot, could pose a challenge.
• Spotify: As a European company, Spotify might face fewer regulatory obstacles. Acquiring Sonos would grant Spotify immediate entry into the hardware market, a long-sought goal. While Spotify previously ventured into hardware with the Car Thing, the product was ultimately discontinued due to limited market demand.
• Other Contenders: Other potential buyers include Samsung Electronics, which could strengthen its home audio offerings, and Roku, though a stock-based deal might be necessary due to Roku’s limited cash reserves.

The Bloomberg chief correspondent added that while larger tech companies like Apple, Google, and Meta could be potential buyers, they are unlikely candidates due to existing strategies and past relationships with Sonos.