Sonos Plans Headphones in Move Outside the Home

(Bloomberg) -- Speaker maker Sonos Inc. is planning to expand beyond the home with high-end headphones, according to people familiar with the plans.

The wireless, over-the-ear headphones are still in the early development stages and could be launched by next year, said the people, who asked not to be identified discussing private plans. High-end pairs often cost $300 or more, and Sonos is expected to target a similar price range, the people added.

Sonos is focusing on audio quality and the ability to work with multiple music services and digital assistants, like its latest internet-connected speakers. The company is one of the few independent consumer hardware makers that has partnered with most of the leading technology companies, including Apple Inc., Google and Amazon.com Inc.

The Santa Barbara, California-based company has begun approaching overseas manufacturers about producing the headphones, one of the people said. Sonos spokeswoman Laura Morarity said the company doesn’t comment on future product plans.

The headphones represent a potential new growth area for Sonos. The company went public in August at $15 a share and the stock has dropped more than 25 percent since then. Still, the company beat analysts’ revenue estimates in the third quarter after its Beam sound bar sold well. Wall Street expects sales of more than $490 million in the holiday quarter, according to data compiled by Bloomberg.

In its most recent letter to shareholders, Sonos said half of music listening occurs outside the home and suggested it will tackle this part of the market. "We plan to push our boundaries by investing resources to make the experience of Sonos outside the home a reality," the company wrote.

Sonos will be competing in a growing but crowded headphone market that includes Bose Corp., Sennheiser, Apple Inc. unit Beats, and Skullcandy Inc. Apple is planning its own over-ear headphones for as early as the second half of this year, people familiar with the plans told Bloomberg in June.

To contact the reporters on this story: Mark Gurman in San Francisco at mgurman1@bloomberg.net;Debby Wu in Taipei at dwu278@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Andrew Pollack

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