Brief:
- Smart speaker maker Sonos is acquiring Snips, a startup focused on developing privacy-focused virtual assistants for voice-powered devices, for $37.5 million. Snips doesn't upload users' conversations to the cloud for processing like other virtual assistants do, helping to preserve consumer privacy, according to a company announcement.
- Snips' voice tools are custom-built to handle specific tasks on smart speakers and can run alongside general-purpose assistants like Amazon Alexa and Google Assistant. Sonos CEO Patrick Spence said the company isn't looking to replace these "ask-anything" assistants, and declined to discuss how the Snips technology may be used in its smart speakers, Variety reported.
- Snips has several open-source conversational projects powered by artificial intelligence (AI), including a natural language understanding platform to power chatbots and voice assistants that has been used by more than 30,000 developers. Snips this year shared technology called Tract that can embed AI assistants in devices, and makes Snips Air, a smart speaker that doesn't need an internet connection, VentureBeat reported.
Insight:
Sonos' acquisition of Snips is meaningful to mobile marketers because the startup's privacy-forward technology that doesn't rely on cloud storage may limit consumer data collection. Localizing the processing to individual devices could still allow for customized experiences based on user listening habits and other information gathered about customers.
Sonos devices support streaming services such as Apple Music, Amazon Music, iHeartRadio, Pandora, Spotify and YouTube Music. While Apple Music and the paid tiers of streaming services don't carry ads, several of the most popular platforms offer ad-supported services that are free to consumers, giving marketers a chance to reach listeners of those platforms on Sonos devices.
The Snips acquisition will help Sonos to expand its smart speakers' voice-powered functionality while differentiating from rivals like Amazon Echo, Apple HomePod and Google Home devices. While Sonos users can set up their devices to work with popular voice assistants, the possible addition of a Snips one may appeal to consumers who are concerned about privacy when it comes to cloud connectivity. Privacy advocates have criticized Amazon, Apple and Google for recording people's voices through their smart speakers as part of their efforts to improve the natural-language processing (NLP) of their assistants. The companies have responded by providing more disclosures about how they use the recordings before deleting them and by giving consumers improved privacy controls.
By embedding more voice-powered features in its devices instead of relying on cloud processing, Sonos also can improve the performance of its smart speakers. Snips' technology lets developers create specialized features to handle a narrow menu of voice commands, pointing to why it runs alongside general-purpose assistants.
It's not clear how much market share Sonos has of the smart speaker category, which is dominated by Amazon and Google in many regions outside China. Amazon shipped 10.4 million Echo devices to post yearly growth of 66% in Q3, mostly powered by Prime Day and back-to-school campaigns, according to market researcher Canalys. Google's shipments of its smart speakers plunged 40.1% to 3.5 million in the quarter. Sonos falls within the "other" category of smart speakers that have a combined market share of about 13% worldwide, per Canalys.
