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Roula Khalaf, the editor of FT, selects his favorite story in this week’s newsletter.
The so -called Internet Internet was to sprinkle Silicon Valley Star Dust to an ordinary old -fashioned industrial company. Adding chips and software to everyday things will result in revenue, higher margins, and high -tech style evaluations.
This brought two risks. First, the evaluation of the company is ahead of itself. Second, investors have forgotten the charm of the analog world. For example, we are currently avoiding the risk of catastrophic chain reactions that are currently holding Sonos, a wireless speaker manufacturer.
The company was founded about 20 years ago by graduate students from the Faculty of Engineering in California, listed in 2018, and built a stylish home sound and drama system. However, the name of the YUPPIE set was the software that seamlessly connected the wireless device to the audio source.
However, I am pushing the DUD memo. In May last year, SONOS released a updated smartphone app (essentially the product control center). This has been proved to be a buggy, and in the worst user experience, many SONOS SUITE have become unable to operate. As a result, last year’s revenue costs $ 100 million -less than one -tenth, the highest executive officer is his job.
Sonos is in a tricky place, as the acquisition of both physical and digital areas has decreased. Customer loyalty is inevitably hit. However, the strategy is to sell new products to existing SONOS families over time. In fact, more than 16 million unique account owners are counted, but over 45 million registration devices are counted. Last year, 44 % of new products were purchased by existing households.
As for the investment, SONOS shares were pitchie. The new product cycle has a volatile revenue that has reached a peak at nearly $ 1.8 billion in 2022. Since the Pandemic Housing Expenditure Bump in 2021, the group’s shares have been soaked in two -thirds, but the $ 1.6 billion of the corporate value is still 14 times more stable. According to Morgan Stanley analysts, 2026 eBITDA. Thursday quarterly revenue provides clues on how the company can recover from this painful technical obstacle.
The software was to eat the world. But even the most magnificent code can create anxious vulnerabilities. The power of software and computing is increasingly cheaper and more reliable, making it stronger in the AI era. Everything is connected. In that case, everything may be exposed to the risk of chord glitches.
Many companies, even the old economic companies, cannot function in the correct order of 0S and 1s. A flashy speaker fails, but it is frustrating for the heel, but tolerates. However, electric vehicles, electric networks, and medical devices depend on software, as well as software. SONOS sets new types of investment risk tones.
sueet.indap@ft.com
