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Sonos turns to new chief to drive smart-homes push

Sonos has promoted former BlackBerry manager Patrick Spence to take over as chief executive from founder John MacFarlane, after the rise of streaming music services propelled the wireless speaker maker to further growth last year.

The change comes as 15-year-old Sonos repositions itself to take advantage of a new wave of voice-controlled “virtual assistants” such as Amazon’s Alexa and connected-home technologies.

Mr Spence joined the California-based company in 2012 after serving as managing director at the Canadian maker of BlackBerry mobile devices, then called Research In Motion.

In an effort to avoid the disruption faced by his former employer, Mr Spence said Sonos customers would “soon” be able to play music simply by calling out a request for a particular artist or track, through tie-ups with Amazon’s Alexa and Google’s rival Assistant.

“It’s really about building that sound platform for the connected home,” Mr Spence said, pointing to collaborations with Nest’s smoke alarm and internet-connected doorbells.

“This is a step on a longer progression for voice. We see it as a way to really change that user experience for people in the home and allow them to get music playing faster, which is important.”

Alexa-controlled devices, from speakers and televisions to fridges and cars, were the dominant theme of last week’s Consumer Electronics Show in Las Vegas, as gadget makers rush to add internet-based intelligence to their hardware.

Sonos sales grew last year from close to $1bn in 2015, including a 20 per cent year-on-year increase during the crucial holiday quarter, Mr Spence said, although he declined to disclose precise figures.

An explosion in streaming music services such as Spotify, Pandora and Apple Music drove adoption and usage: less than a third of customers subscribed to an unlimited music service at the beginning of 2016, Mr MacFarlane said, while around three quarters did by the year’s end. “2016 was the inflection point,” he said.

That trend benefits Sonos because it is easier for customers to play music through its wireless speakers via a cloud-based music app than from files stored on a PC.

That makes this the “right moment” to hand over to a new chief executive, said Mr MacFarlane, who is looking to prioritise his family life.

“It’s simply tilting the balance a little bit towards my life side and not the work side. That’s just not compatible with the CEO position,” he said.

As a founder of Sonos, the change is “not unlike watching a teenager go off to college. There is a bit of loss but a whole lot more you are proud of.”

Asked whether the move could portend a move by Sonos to go public, Mr Spence said: “We make sure our systems and everything we are doing are in line with the idea of a public company just because it’s good governance,” he said, “but we are not in any rush [to hold an IPO] at this time.”

Via FT