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Sonos raises prices on various speakers

Sonos

Sonos has raised the prices of several of its speakers, significantly in some cases. Why?

Sonos doesn’t explain it to thouroughly, (see article here, taken from The Verge):

always assessing market dynamics – including demand, supply chain, component costs and the competitive landscape‘. That seems to refer to the ever-growing problem of chip shortages. Originating in Covide times when it became painfully clear how enormously dependent the world is on Chinese chip manufacturers who were working far below their normal production capacity due to lockdowns.

At the same time, you can ask yourself whether the shortages are not actually quite useful to the Chinese government. After all, shortages mean that – especially as a virtual monopolist – you can ask higher prices for a product. And in that sense, lower production capacity might be a (sneaky) thing to stay.

Keeping investors happy

In the case of speaker manufacturer Sonos, it’s certainly not just the problem of chip shortages that has led to price increases, it seems. In the aforementioned The Verge article, we read the following passage:

The company says that the price increases are making good on a promise it made during a call with investors last month‘. In other words: the shareholders seem to have been promised higher prices as well. The price increases are already in effect and can be quite significant with differences of between $10 and $100.

It probably won’t be just Sonos when it comes to price increases; you can expect them with virtually any product that contains chips. And once raised, they won’t be adjusted downward anytime soon.

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