Sonos software update plans to win back customers and redefine longevity

A year after its app disaster, Sonos has released a major software update that it says transforms its Ace headphones as it aims to win back trust. Is it worth the hype?

Sonos's software update allows people to connect two pairs of headphones to their soundbar.

Sonos has released a software update for its Ace headphones that it says is like a complete new version of the product as it works to rebuild trust with customers after its app bungle last year.

The up-market US audio company is hoping to prove it can finally master the software game after a disastrous 12 months, which began when millions of customers could not use its products following an app update and ultimately led to the departure of its long-time chief executive Patrick Spence.

A year on, Sonos is finally beginning to make inroads again. Revenue firmed almost 3 per cent to $US259.8m in the three months to March 31, beating analyst estimates. Gross margins remained flat at 44 per cent.

Under new chief executive Tom Conrad, the company is going back to its roots, highlighting the durability and quality of its hardware.

That’s why it chose to release a free software update for its Sonos Ace headphones, which it launched last year, rather than unveil a new model. This is despite speculation that it would release a more premium version of the headphones, dubbed Sonos Ace 2, after initial sales underwhelmed. The headphones were initially priced at $699, and can now be bought on sale for $499.

The Sonos Ace headphones were released last year.

Sonos head of software Jason White told this masthead that the new software update – which has improved noise cancellation and new features such as the ability to pair two headphones to a soundbar – was as good as a new piece of hardware.

“I can’t comment specifically on the road map, but I think if you look at the competitive space of headphones, you’ll see a lot of companies churn them significantly faster than we might,” Mr White said.

“Sometimes, like you could argue that the software update that we just did for Ace could have qualified that to be an Ace 2 product. It’s a pretty compelling set of features, but we really wanted to double down on the sustainability aspects, the longevity aspects of the product, and so that’s why we took the path that we did.”

The update improves the Ace’s active noise cancellation, optimising the microphones inside the ear cups, to prevent sound leakage from wearing items such as glasses and hats or having long hair.

It has also introduced TrueCinema 3D Sound, a function that adjusts audio to better match the acoustic properties of a room so it sounds like “you’re not wearing headphones at all”, and allows two pairs of Ace headphones to be connected to a soundbar.

Phone audio quality has also been improved, with a portion of the user’s voice fed back into the headset to “provide more natural speech” and not feel like you’re talking inside a box – which can be a problem with noise cancelling headphones.

Apple is another company that hasn’t been in a rush to release a new version of its over-ear headphones, AirPods Max. While Apple introduced new colours and USB-C to AirPods Max last year, the headphones remain essentially unchanged since their launch in late 2020. They even feature the older H1 chip, not the new H2 version found in the cheaper AirPods Pro 2 earbuds.

“The discussion about Apple not releasing updates but still being super relevant five years later is maybe more our ethos versus doing a SKU (stock keeping unit) a year,” said Sonos vice-president of design hardware Dana Krieger.

“There might be various business reasons why other competitors would do things on a faster churn rate but our intent is to make sure that we’re designing things that have longevity and premiumness and are worth the price paid for.”

The only constraint is physics.

“Software has its limits. What we’re talking about is translating something digital to something very analog and there is only so far software can take that alternation before you reach the limits of physics,” Mr Krieger said.

“Whether or not we’ve reached the limits of physics with Ace, I couldn’t tell you, but I can tell you that there is a reason why people have different SKUs of headphones or different sizes of products. It’s because those different balances create sound experiences and price points for various customers.”

So if people are holding onto a pair of Ace headphones for longer, what is Sonos’s growth strategy? Mr Krieger said it was a combination of adding more Sonos speakers to your collection, while referring friends to products to drive new customers.

“We have the ecosystem effect. If you buy the Sonos Ace headphones and then buy another product in our portfolio, it’s kind of like a one plus one equals three effect, where those two things actually work better together and give you a better overall experience,” he said.

“So you don’t have to replace your headphones to have a better experience and continue to do business with Sonos.”