Sonos, the high-end speaker company, continues to reel from its disastrous app update last May. The company lost revenue and approximately $600 million in market capitalization. Then came the layoffs and a CEO exit. WSJ’s Ben Cohen explains. See The Journal live! Take our survey! Further Listening: - The Glitch That Crashed Millions of Computers - The Snowballing Problems at Vail Resorts Further Reading: - The $500 Million Debacle at Sonos That Just Won’t End - Sonos Finally Hits the Hard Reset Button Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Why do software updates sometimes fail?
Updating your software. It's one of our modern common chores. Mostly it's annoying, inconvenient, but we do it because it's supposed to make sure our stuff works better. So when a software update somehow makes things worse, people get mad. Like back in 2014, when an iPhone update caused a bunch of people's phones to crash.
The latest software update called iOS 8.0.1 meant to fix software bugs, reportedly crashing some users' phones instead.
Or in 2016, when an update to the Nest thermostat left people angry and cold. Their internet-connected thermostats have been malfunctioning ever since they got a software upgrade last month. Or last year, when a CrowdStrike software update caused major travel delays.
It was a faulty software update by cybersecurity company CrowdStrike that caused disruptions across multiple industries.
In the best-case scenarios, companies act fast and fix the problems, and we can all move on. But our colleague Ben Cohen recently wrote about a software update that has plagued a company for months now.
it was so buggy that it turned into one of the most disastrous software updates in the recent history of consumer technology, which I know sounds like a bit of an exaggeration, but it's kind of not.
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Chapter 2: What happened during Sonos's disastrous software update?
The company with the software update from hell is Sonos. It makes high-tech speakers that are controlled through its app. And when Sonos updated that app last spring, a lot of users suddenly ran into all kinds of issues. Many couldn't do basic things like connect to their devices.
Recently, they've had an app update. Oh my God, I can't get anything to play on it.
Sometimes I have to spend 20 minutes trying to figure out what the heck is even going on with my devices. But everybody's mad about the app.
The app, the new release has been a disaster. Don't buy Sonos products.
Chapter 3: How did Sonos users react to the app update?
Don't do it.
Sonos has apologized and spent months trying to fix the problem. But customers are still upset. And the issue has hit the company's reputation, led to layoffs and a leadership overhaul, and cost it hundreds of millions of dollars. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, March 6th.
Coming up on the show, Sonos and the terrible, horrible, no good, very bad update.
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Do you listen to music at home? And what do you listen to?
I do listen to music at home. And if I had my choice of what we would listen to, it would probably be a lot of Taylor Swift. But I don't have a choice because I have a three and a half year old daughter. So what I've been listening to a lot of lately is the soundtrack to the movie Cars 2.
Oh, my God. When Ben and his daughter listen to those bangers from the Cars soundtrack, their device of choice is not a Sonos.
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Chapter 4: What is Sonos known for in the audio industry?
I am not a Sonos household. However, I have learned that basically everyone in my life belongs to a Sonos household.
Tell me about Sonos. What is the company known for?
Sonos is known as a premium home audio equipment company, and it really revolutionized home audio by creating this ecosystem of smart audio products that work seamlessly with each other. And in fact, when I talk to Sonos users, the company that often comes to mind is Apple.
Like, if you're an Apple user, if you have an iPhone, probably you have a MacBook or you have an iPad, and you want to be able to control all of it within that same ecosystem.
The idea is you put your Sonos devices on the same Wi-Fi network and they can talk to each other. And you can control all your devices with a single app on your phone.
And people who own Sonos products don't just own one Sonos product. The average Sonos household owns three products. So maybe that's a speaker with a soundbar under the TV or a portable speaker that they can bring on the road or headphones. I mean, there are a lot of people who own, like, lots of Sonos products because they need speakers in each room of the house.
And when your three-and-a-half-year-old daughter is listening to Cars 2 in her bedroom, you might want to listen to Taylor Swift in another room.
Or you might want to listen to Taylor Swift in all the rooms, and then you can also do that.
Right.
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Chapter 5: How did the failed update impact Sonos's business?
And although the company is a lot smaller than other tech companies that also sell speakers, like Amazon, Sonos was able to carve out a place for itself in the luxury audio space. By the end of March last year, the company was worth over $2 billion. Then, in April, the company announced that it was upgrading its software.
The old app was sometimes hard to manage, and the company wanted an update to make it easier for them to release new products. In a statement, then-CEO Patrick Spence said, quote, The new app was released globally on May 7, 2024, as a software update. But lots of customers had problems with it almost immediately. So what was it exactly that happened?
Basically, everybody noticed right away, like the very first day, in part because it was pretty hard not to notice. Sonos users couldn't use basic features of their speakers. They couldn't access their own audio systems. It was almost as if these speakers had become like sleekly designed bricks.
Like very expensive bricks?
Very, very expensive bricks. And what actually happened with the app kind of depends on the user. Some found that it was like missing essential features of the old app, like the ability to edit playlists on the fly or set alarms for when they should wake up in the morning. Some people found entire libraries of music were just suddenly inaccessible to them.
Speakers that vanished from their audio systems in the middle of a song. That basic promise of being able to control music in a room suddenly wasn't being fulfilled. And for most Sonos users, regardless of the experience they were having, the product basically just became worse overnight.
The tech problem was complicated. Part of it was that over the years, Sonos had continued to rely on a lot of obsolete code. They'd done a lot of updates, though never a complete overhaul. And they ran into issues when they tried to bring their software up to date to match their hardware ambitions.
Sonos says they looked closely at whether or not to revert back to the old app, deciding eventually it wasn't viable. But they also struggled to fix the new one. And then there was the PR problem. At first, the company defended the update, according to a statement published by a tech news outlet.
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Chapter 6: What attempts did Sonos make to resolve the app issues?
The chief product officer at the time defended it as courageous to do this, like because, you know, they were releasing this new app and it would have been easy to just keep going the way they were going. But they felt that this was like a necessary change that they had to make for the future of the company.
Soon after the messy rollout, Sonos started releasing additional software updates to try and fix the bugs. And in July, Spence, the CEO, published a letter of apology. But customers were still mad. A lot of them still couldn't use their devices the way they wanted. In October, more than four months after the app rolled out, Spence released another statement, this time a video.
For more than 20 years, we have been obsessed with delivering an audio experience that is easy, reliable, and sounds amazing.
The video is more than three minutes long, and it's titled, Recommitting to Quality and Customer Experience.
Recently, we rolled out a new app that fell short of this standard. It's been painful for our customers and gut-wrenching for all of us at the company.
Ben says that for a lot of customers, the response was too little, too late. How has all of this impacted Sonos, the company?
In a very, very big way. So the company has said that it has cost at least $100 million in revenue. And the company had to delay two product launches last year as it was dealing with the fallout of this botched app release and the bungled response to it. So that's $100 million in revenue.
And the company's market cap has plummeted by around $600 million since the app came out.
Sonos released an app that was supposed to be their most extensive app redesign ever. And it kind of turned into their most expensive app redesign ever.
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