Connected Loudspeaker Startups Aether And Beep Close Down (Exclusive)

Wi-Fi Speaker Makers Aether, Beep Shut

There’s a saying among Silicon Valley entrepreneurs: Making hardware is hard. As it turns out, making hardware that competes with products from much bigger companies is even harder.

That’s a lesson that two San Francisco-based connected audio startups learned the hard way over the last couple of weeks. Aether Things, which debuted its Cone smart loudspeaker in early 2014, quietly laid off its remaining staff and closed operations in September, Variety has learned. And Beep Devices, which introduced its dial-shaped streaming music adapter in early 2014 as well, announced its closure on its blog in October.

Aether debuted its Cone connected loudspeaker in early 2014, and positioned it as a smart device that learned from its users’ listening habits. The speaker offered voice control, and users could just use the speaker’s round grill as a kind of frequency wheel to change the music, jumping from podcasts to music tracks and back.

The Cone won praise for its design, as well as its radical take on user interfaces . Its claim to fame was that users could access streaming services without ever having to look at a screen. But its $400 price tag made it a hard sell, and its limited support for music services didn’t exactly help either. However, its death knell may have been Amazon’s introduction of the Echo — a speaker that also supports voice input, and offers far more features than the cone, for half the price.

Aether hasn’t made its closure official yet: The Aether Things website is still up and running, and the device is still for sale at select online retailers. However, its San Francisco-based office has been shuttered in September, and a Linkedin search reveals that most staffers have since moved on. The company’s former PR agency informed Variety that it is not representing Aether anymore; questions left via the Aether’s website as well as an email to one of its corporate officers remained unanswered.

Beep Devices tried to solve a similar problem as Aether, albeit with a slightly different proposition: The company was building a jogwheel-like audio adapter dubbed the Beep Dial that was meant to connect existing loudspeakers and stereo systems to the internet, allowing users to stream music from Spotify, Pandora and elsewhere.

The $99 device also stood out with beautiful industrial design, but Beep co-founder and CEO Daniel Conrad had plans that went far beyond the single device. “The truth is, we didn’t make any money selling the Beep Dial — it would take very high volumes to turn a profit,” he wrote on the company’s blog in October, adding: “We were okay with that because we planned to make money by integrating our technology with speaker manufacturers.”

Those partnerships didn’t materialize. And in September, Google essentially pulled the rug from under Beep’s feet by introducing the Chromecast Audio, a $35 device that offers much of the same functionality as the Beep Dial, for just $35. “Competition has changed significantly over the past year, and the market opportunity we saw has gone away,” said Conrad.

Beep and Aether were both trying to cater to a market with huge potential: Consumers are increasingly adopting streaming services like Pandora, Spotify and Apple Music for their listening habits, and podcasts have gotten new popularity thanks to break-out hits like “Serial.” Much of this transition has been driven by mobile apps and devices, but research shows that around 50 percent of all music listening happens in the home.

The one company that has thus far been able to capitalize on this trend is connected loudspeaker maker Sonos, which is expected to generate a billion dollars in its current fiscal year. Many others have tried to establish their own, competing formats, so far with muted success. And some have abandoned their efforts altogether: Apple inherited a Wifi-connected loudspeaker project when it acquired Beats in 2014, but the company decided to kill the project instead of going to market with it.

The problem is that home audio requires a significant financial commitment, especially for consumers that want to pipe the same Spotify tunes to all the rooms in their house. Spending hundreds, if not thousands of dollars on technology that may be obsolete tomorrow is something not many consumers want to do. And competing platforms that make it impossible to combine speakers from different brands haven’t exactly helped with the adoption of the technology.

In a way, connected home audio may need more failures like Aether and Beep to succeed. Many consumers will wait until there are one or two standards before they’re ready to buy.

 

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