SEATTLE — Over the years, Sonos has weathered competition from better known rivals like Apple and Bose to find a devoted audience among audio enthusiasts. But lately its wireless speaker has lost ground to an unexpected competitor, Amazon’s Echo.
Now it faces another challenge: a change in the corner office. After 14 years leading the company he helped found, John MacFarlane has resigned as chief executive of Sonos and has been replaced by one of his deputies, Patrick Spence.
Mr. MacFarlane, 50, has also left the company’s board of directors, though he will remain an employee to help mentor colleagues and work on other projects. He said he left the board so Mr. Spence would not feel like he was always looking over his shoulder.
“I don’t want to be that founder who’s always second-guessing,” Mr. MacFarlane said.
Sonos is a rarity among technology companies, started in 2002 at a time when independent hardware companies in consumer electronics, an industry dominated by much bigger players, were hard to find. Mr. MacFarlane did not take venture capital money for several years and kept the company private, shunning the usual routine of selling shares to the public or being acquired by a bigger company.
John MacFarlane spent 14 years leading Sonos, a company he helped found. Credit Sonos
Sonos — based hundreds of miles away from the glare of Silicon Valley in the seaside town of Santa Barbara, Calif. — does not have the visibility of an Apple, Facebook or Uber. But it has amassed a loyal following with its family of wireless speakers, which allow people to play music streamed from internet services like Spotify or stored on a local computer.
One of the secrets to Sonos’s business is that once listeners become hooked on the sound from one of the company’s speakers, they tend to buy more of them so they can simultaneously play music in multiple rooms in their homes.
Sonos would not disclose its sales, but it said there are millions of homes with its speakers in them, many of them with more than one speaker. Mr. MacFarlane previously said that the company’s 2015 sales were around $1 billion. Mr. Spence, who was previously president and chief commercial officer at Sonos, said the company is profitable.
Mr. MacFarlane said he had planned to resign as chief executive earlier, citing his wife’s bout with breast cancer and his aging parents as factors. But last year he delayed his plans when Amazon’s Echo speaker unexpectedly began to eat into sales of Sonos speakers.
Patrick Spence said Sonos understood that its competition was no longer strictly the audio companies that it faced before. “With what Amazon and Google are doing, the world has changed completely,” he said. Credit Sonos
While Echo has received mixed reviews for its sound quality, its Alexa voice assistant — which allows people to quickly play music with verbal commands — has captivated the tech industry and the public. More recently, Google introduced its own Echo competitor, Google Home, with a voice assistant.
“I fell into that trap where I’ve been watching voice recognition for years,” Mr. MacFarlane said. “I tried Echo in the beginning and wrote it off. I had too many distractions at that time. I wasn’t playing at the level I should have been playing at in all frankness.”
Last March, Mr. MacFarlane announced layoffs at Sonos and said the company was investing in efforts to bring voice recognition to its products. Sonos has since said it is working with Amazon to allow people to control Sonos speakers with Alexa.
Mr. MacFarlane said the company is in a better place than it was last year. The growth of streaming services like Spotify and Apple Music, both of which work with its speakers, has helped stoke demand for Sonos products. The company said the number of households with Sonos speakers grew 20 percent this past holiday quarter from the same period the previous year.
Mr. Spence, 42, said Sonos understands that its competition is no longer strictly the audio companies that it faced before. “With what Amazon and Google are doing, the world has changed completely,” he said. “We’re part of that new world.”