Hello everyone. Two quick follow-ups to yesterday’s update:

The “ESPN in 100M households at its peak” vs. "Netflix’s 74M paying subscribers in the U.S. and Canada" is not a simple comparison. Not only is password sharing rampant with Netflix - making it likely that Netflix is found in more than 74M U.S. households – but it’s also very simple to signup/cancel a Netflix subscription. ESPN was, and still is, only available as part of a $$ bundle.
A few people reached out to me to say that they have never had a woven/fabric Apple Watch band tear or split despite years of usage. Such wear and tear for a band specifically marketed as rugged seems odd. I agree with that statement. At least based on my experience, Alpine Loop was far too delicate to be part of the Apple Watch Ultra series. That doesn't mean Apple should move away from comfortable materials for Ultra bands. Instead, they should introduce more rugged bands that begin to provide additional utility to the wearer.

In today’s update, we begin to wrap up our CY1Q23 earnings reviews with smaller companies that remain intriguing to keep an eye on from an industry/competition standpoint: Sonos and Peloton. We will cover Spotify tomorrow.

Sonos Earnings

Sonos was not able to escape the consumer gadget recession. CY1Q23 revenue was down 24% to $304M (vs. $400M last year) as fewer people bought premium speakers in the home. The closest equivalent to unit sales was down by about 30% While Sonos fell victim to a tough year-over-year compare, similar to what Apple experienced in a few product verticals, sell-through demand was also weaker.

Here is Sonos speaker sales on a TTM basis to remove the seasonality associated with the holidays:

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