TECH

Due to the current moment of the world economy, premium product manufacturers must launch even more expensive products.

As coronavirus restrictions are lifted and inflation hits all sectors of the economy harder, premium gadget makers are facing a sharp decline in sales. The way out of this situation may be the launch of even more expensive products.

Sonos summarized the sad results of its activities last Wednesday. The smart acoustics maker's revenue for the quarter ended in June was down 2% from a year earlier to $372 million, 11% below Wall Street analysts' expectations, but the outlook is even worse: according to estimates from the company itself, the next quarter will bring only US$ 306 million, and this is already 34% lower than analysts' forecasts. As a result, Sonos shares are down 25% the day before, a blow the company has not experienced since going public in 2018.

Turtle Beach, the maker of gaming peripherals, is in an equally dire situation, with the company reporting a 16% drop in quarterly revenue and a 28% cut to its annual guidance, causing its stock to tumble 32% on Tuesday. -fair.

The iRobot company, recently announced by Amazon, is also not doing well. Vacuum maker Roomba's second-quarter revenue was down 30% year-over-year. Amazon aims to buy the company for $61 a share, 22% above the closing price before the deal was announced, but 38% below where the company was trading just nine months ago.

Gaming PC and peripherals maker Corsair Gaming said its second-quarter revenue dropped 40% year-over-year to $284 million.

Action camera maker GoPro, which has traditionally been a busy summer season, is also struggling: in the second quarter, revenue was almost unchanged, but its own forecast for the third quarter suggests a drop of 5%, while analysts had forecast growth of 6%.

Even Apple is not immune to problems. The wearables, home appliances and accessories division (which includes Apple Watch, AirPods and the HomePod smart speaker) reported an 8% drop in revenue from a year ago for the first time in 6 years. CEO Tim Cook attributed the failure to macroeconomic factors.

Considering that all listed brands occupy premium niches in their segments, one might assume that buyers of such products are running out of money, but in reality the opposite is true – the echoes of the recession echo most strongly in these companies' budget offerings. The same Sonos blamed the Roam smart speaker and the Ray TV soundbar for its latest flaws – they cost $179 and $279, respectively. But demand for his $699 Amp still outstrips supply. And many of Apple's wearables are clearly cheaper than the iPhone, most versions of which cost over $1,000 — while revenue from the iPhone itself increased another 3% in the last quarter.

The luxury market really isn't in trouble: Christian Dior, Gucci and Hermès all reported sales growth in the first half of the year. And American Express CEO Steve Squeri noted that the real problems for this group of brands could only be caused by a full-scale credit crunch caused by mass unemployment.

The conclusion may seem paradoxical: to survive, makers of premium products will have to make them even more premium. And brands seem to understand that. In the near future, their fate will be determined by new models, whose series of announcements are expected in the upcoming autumn season. GoPro plans to announce two new cameras this fall instead of one; Sonos announces a new device in December – for some reason the event had to be rescheduled from September; Corsair is planning a full-scale attack on the $2,700 gaming laptop front. Of course, this isn't the same as a $10,000 purse, but players aren't oblivious to the desire for status stuff.

AVnews