🎶 Sonos beats Google (for now)
![_When the lofi beat drops [Luis Alvarez/DigitalVision via GettyImages]_](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/1pkILkeKJ6kGiMUMjl5su6_1_GettyImages-1171930884.jpg)
Hey Snackers,
From the earthquake in Haiti to the turmoil in Afghanistan, there's a lot of somber news in the world right now. We want to acknowledge that before diving into today's business news.
Stocks closed at record highs again yesterday, despite the fact that five US states set new records for Covid cases.
Sonos wins a preliminary ruling against Google — and it could be just "the tip of the iceberg"
Legal thriller soundtrack… but make it surround sound. Sonos makes multi-room speakers to fill your Napa winery with lofi jazz. The Santa Barbara-based company uses smart tech for voice control and syncing of its $1.3K+ Surround Sets. Speaking of tech...
- The story: A judge preliminarily ruled that Google infringed on five of Sonos’s smart speaker patents.
- The backstory: In January 2020, Sonos sued Google for allegedly using its patented speaker tech — while undercutting Sonos's prices with cheaper speakers.
- The way back story: In 2013, Sonos shared the tech specs for its smart speakers with Google for a Google Play Music partnership. Sonos alleged Google stole that tech and used it in dozens of products.
Cue the deep bass... As part of its suit, Sonos is asking for an import ban on relevant Google hardware — including Google Home smart speakers, Chromecasts, and Pixel phones. Those are made in China and shipped to the US for sale. But it's not Game Over yet: the International Trade Commission still has to decide whether to reverse or accept the judge's decision. That's scheduled for December 13th.
Taking on Goliath is a big risk... that could have a big payoff. Sonos is worth $5B — Google is worth nearly $2T. By challenging Google, Sonos risks paying major legal fees and damaging potential partnerships with big companies. But if Sonos wins, it could force Google to pay licensing fees for every device that allegedly uses its tech. Sonos claims this suit is just “the tip of the iceberg,” estimating that Google has infringed on 150+ patents. Sonos stock jumped 5% after the legal win.
"Swapflation" could be coming: coffee is getting pricier — and possibly less tasty
Dropped my double-shot latte... The cost of coffee beans has soared 43% so far this year, according to NYT. A combo of factors are making beans more expensive:
- Cold brew: An unusual frost in Brazil — the world’s largest coffee producer — is expected to cause this year’s Brazilian coffee crop to drop a whopping 19% from last year.
- Bitter brew: Political turmoil in Colombia — the world’s third-largest producer — caused bean output to fall 52% in May from last year.
- Slow brew: Supply chain bottlenecks and labor shortages have also slowed delivery times.
Caffeine jitters... Folgers and many independent coffee shops plan to pass on costs to consumers by raising prices. Meanwhile, Starbucks and Nestlé buy their beans so far in advance that they won’t have to worry about price increases for at least a year. But they still might raise prices (venti macchiato isn't safe). Besides hiking prices...
“Swapflation” could be coming... and not just in coffee. Companies can deal with rising costs in three ways: raise prices (#inflation), shrink products (#shrinkflation), or swap ingredients (#swapflation). Companies know that consumers hate paying extra for the same products — so some may swap in cheaper ingredients to cover price hikes.
What else we’re Snackin’
- Crash: Federal safety regulators are investigating at least 11 accidents involving Tesla cars that crashed into emergency vehicles while using self-driving features.
- IRL: Roblox shares dipped after the teen-favorite video game platform missed quarterly sales expectations — the game-palooza may be cooling as recovery continues.
- PowerTok: The Chinese government has reportedly taken a stake and a board seat in TikTok-owner ByteDance's key Chinese entity.
- Hacky: T-Mobile said hackers breached a company database, and is investigating whether customer info was exposed.
- Milky: Oat milk maker Oatly said its quarterly sales soared a frothy 53% from last year as the alt-milk boom keeps booming.
- SeaFi: Google and Facebook are participating in a new underwater cable system to improve internet access across the Asia-Pacific region.
Tuesday
- Retail sales report for July
- Earnings expected from Walmart, Home Depot, Just Eat Takeaway, Krispy Kreme, and La-Z-Boy
Authors of this Snacks own shares of: Google, Walmart, Starbucks, and Tesla
ID: 1761998