Sonos vs Cisco

[eonibm]

By now everyone has probably heard of Cisco's announcement of a wireless music system that will compete with Sonos. It was already shown at C-Scape, Cisco's confab. Apparently it also has a wireless controller.

I am wondering if anyone has any thoughts/knowledge about how Sonos will counteract this or just what your general thoughts are. I know that companies always say things like "It legitimizes the space", "We welcome the competition", "They won't be able to compete" etc etc etc. But, really we also know that deep down inside no one who has had a market to themselves wants competition. We also know that only the paranoid survive, especially in the tech industry and that in the tech industry your only competitive advantage is your lead time. Eventually everyone will copy your product, products get commoditized and prices drop like a rock. Features that were once wow factors become mundane and everyday.

Sonos' sales have been increasing 50% per year since the first year. People LOVE the product (albeit there are still many many improvements to be made). Markets like this always attract competition. Cisco has deep pockets and is orders of magnitude larger than Sonos. This can both be an asset and a liability, but I have never known Cisco not to be nimble and laser sharp in focus when they target a market. If Cisco wants to copy Sonos' business plan and product design and executes well, they will be real competition. Of course, this is far from for sure, even if they are Cisco. Many large companies mis-execute in new markets.

Any thoughts?

[buzz]

At this writing there is not a lot of information available on the Cisco offering.

According to one pundit, "So far, the standard fault of every media streamer is that it can’t play iTunes DRM … I don’t see how Cisco’s solution solves any of this." Evidently, it is an iTunes world and no one else should bother to develop products.

Next week is CES, I'm sure that we'll hear more.

[Avee]

I like how everybody is shooting to compete with Sonos. It seems Sonos still is the gold standard.

If they were saying "We'll put up a better offering than Linn/Sooloos/Logitech" that would get me worried.

[Reid]

This market is still soooo small by Cisco standards that I am not sure what to make of it.

The only thing that I am sure of is that this is very good news for Sonos shareholders as the "exit by selling to Cisco" odds just went up substantially. There is an old saying in tech M&A that companies like Sonos are bought not sold. The fact that Cisco is looking at this as a real market is big news indeed. Whether this is a good or a bad thing for Sonos customers remains to be seen.

[BlueCrystalMan]

Only thing I really see happening is Sonos' prices dropping to compete, and different offerings in terms of bundled solutions. Like someone said, Sonos is the gold standard, and is going to be very hard to beat... Focus on the marketing (I stumbled on them in a Crutchfield catalog, never heard of them before that, and looked for months for a solution) and they will do just fine.

[RO53BEN]

Sonos has been on the market for nearly 4 years. In all that time, nobody has caught up and been able to offer an equivalent product. Some products, like Slimdevices Squeezebox, were even in the marketplace before Sonos and not even that have managed to do zone sync functionality like Sonos.

I doubt anybody new to this market is going to be a significant threat for some time yet. Cisco is a big firm, with a good networking background, but they don't know anything about music reproduction right now.

[Majik]

Linksys (now owned by Cisco) were producing digital music streaming boxes 4-5 years ago. I know that because I was working for a broadband ISP at the time and was talking to Linksys and Netgear about the opportunities for these devices.

At the time these products were easily comparable with Squeezebox but they never satisfied my requirements and most of them never caught on and disappeared from the market.

Since then we've had dozens of digital music streaming solutions from various companies including electronics giants like Dell, Sony, Phillips, and Apple. None of them has been even close to the functionality and experience provided by Sonos.

What people seem to forget is that Sonos is more than just another music streaming system. It's still the only system that provides seamless, almost unlimited room synchronisation capabilities and it's one of the few systems that's genuinely a consumer device (rather than a geek toy). Getting these right is the hardest thing in the world to do, and so far everyone else has failed.

Cisco are a large and successful company, that is true. But I have worked with Cisco products for over 12 years. In that time they have produced plenty of unsuccessful products and ones which were just rubbish.

WIll Cisco be sucessful in their venture? Who knows but if you're expecting them to produce something genuinely competitive with Sonos, I wouldn't hold your breath as the odds are stacked against them.

IMO, the most sensible thing that Cisco could do if they are serious about this market, would be to acquire Sonos.

Cheers,

Keith

[eonibm]

Or, just copy their business plan. I mean, Sonos wrote the business plan for everyone to follow. They just have to do it.

[Majik]

Originally Posted by eonibm

Or, just copy their business plan. I mean, Sonos wrote the business plan for everyone to follow. They just have to do it.

You make is sound like a trivial thing to do.

Even if you follow someone's else's business model (I'm assuming you mean this... a Business Plan normally refers to a financial model) 99.99% of the difficulty is in the execution.

Sonos are unique in what they do because they executed well. This takes technical excellence, vision, timing, culture, the right people, etc. None of these can be easily copied.

Consider another company: Apple. They were successful (eventually - it took them a couple of years) in the portable music market because of their execution. They weren't the first MP3 player on the market and they weren't always (and still aren't always) the best but their execution and timing was spot on.

By your logic, anyone else can create an "iPod-killer" simply by following Apple's business model. Others have tried this and failed.

The reality is it takes a LOT more to create a successful product than following someone else's business model. In fact I would say it takes so much more that the business model is actually an insignificant (and, probably, irrelevant) factor.

Cheers,

Keith

[Avee]

Read this:

Originally Posted by NYTimes.com

Ultimately, Mr. Hooper said, the company expects to make the most money by offering home video conferencing. Today, Cisco is making a major effort to sell Telepresence rooms to corporations for $40,000 to $300,000 each. These have big high definition TV and a fancy audio system on each end, connected by a high-speed Internet connection, meant to simulate face-to-face meetings.

Consumers would place a small camera next to a television to chat with friends and relatives from their family room couches. Cisco is trying to develop standards that would make placing a video call as easy as dialing a phone number and that would allow the recipients to see notices of incoming calls on their televisions.

Doesn't look very focused to me. It seems they thought "Let's take all our business technology and see how we can sell more to consumers". Video telephony too complicated? My 3G phone does that just like any other phone call, and I never felt the need to even try it.

If that will be the fashion they want to compete with Sonos, it will be just another Philips or Sony trying to build just something that does wireless music. They need to get very serious if they want to compete with Sonos, and their business products aren't going to help them much with that. It is not about technical merits, it is how well it integrates into the lives of the average user. Apple has proved that point very well.