![]() ![]() He holds a 0.7% stake in the company valued at about $19 million. He runs the company in a very pragmatic and “brand preserving” way, focusing heavily on the bottom line. Management: CEO Patrick Spence took the reins in 2017.However, the markets seem to value Sonos more as a software company that generates FCF margins in the mid-20s. This will compress to an FCF margin of 5-6%. Based on the company’s own projections and an analysis of competitors (SoundUnited and Bose), the long-term EBITDA margin is unlikely to exceed 15%. Margins: The economics of manufacturing speakers are far from exceptional: the 50% gross margins, deceptive.Drivers for sales growth are (1) existing households buying additional speakers, (2) geographic expansion, and 3) expansion into adjacent product categories. Top-Line: The market is already fairly saturated and growth rates are unlikely to exceed 6%.According to Masimo (the acquirer of a direct Sonos competitor, „SoundUnited“), the market for high-end speakers is about $6.5 billion, implying a 27% MS. A major line of business for Sonos is home theater systems, where multiple speakers installed in the living room provide a unique spatial sound experience. Sonos makes its money by selling speakers that can be easily integrated into a complete home audio system. Business: currently ~14 million households own a Sonos speaker, mostly in the US and Europe.Sonos‘ moat doesn’t seem sustainable for decades to come, but instead has an expiry date attached to it. Another drag are also some key patents that will run out by 2026. In the long run, it’s extremely difficult to stay relevant in a market that sees at least two or three major technology upgrades every year. ![]() However, zooming out even further on the 20-30 year time horizon, I can’t say with certainty that Sonos will maintain the necessary pace of innovation. Moat: Sonos will be able successfully expand into new product categories such as headphones and video conferencing, likely ensuring mid to high single-digit revenue growth in the coming years.Hardware businesses rarely create lasting moats and exceptional business models (unless they involve a subscription, which is not and will not be the case for Sonos) While SONOS is a wonderful brand, it is not really a wonderful business. Recommendation: I recommend against buying SONOS at its current share price of $20.Engineers from both companies have already started an intense test program with the series-validation vehicles on the Continental proving ground in Frankfurt to further validate and improve the integrated technologies.Download PDF Version | Download Financial Model In the area of safety, the two companies also are integrating the Sion’s crash sensor. ![]() Under the expanded cooperation, Continental also will provide intelligent connectivity features, like a passive access and smart entry system, which automatically recognizes an authenticated user approaching the car, opens the vehicle doors and starts the low voltage systems, alongside a start/stop button for Sono Motors’ series-validation vehicles. ![]() In close collaboration, Continental and Sono Motors have been developing the software for comfort control and climate control, as well as the energy, charge level and thermal management of the powertrain. Extending our cooperation to other areas, such as ADAS and connectivity, not only helps us to make rapid and decisive progress in development, but also gives us confidence that we will provide technology of proven quality to our customers,” says Laurin Hahn, co-founder and CEO of Sono Motors.Ī range of advanced technologies make the Sion safer and smarter “We started our partnership with Continental in 2018 by working on parts like the electric engine, the software for the Sion’s vehicle control unit and airbag control unit. Sono Motors currently plans to start production of the Sion in the second half of 2023. The cooperation enables Sono Motors to increase efficiency in its development of the Sion, which has the potential to become the world’s first affordable SEV, by using existing modern technologies. Prospectively, the ADAS will not only make driving the Sion safer and more comfortable, but will also ensure that the Sion complies with the upcoming stricter European Union road safety regulations (GSR). A future-proof ADAS feature is planned to be standard in every Sion, which is expected to retail for approximately €25,000 net. ![]()
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