HEOS Wireless Multiroom Platform Called Big Part of Denon’s Future

Following Bose, NAD, Samsung and Sonos, Denon has entered the wireless multiroom audio market after what it called an eight-year development process. The heart of the Denon system is the HEOS platform that’s built around Wave’s MaxxAudio suite of audio enhancement tools. Brendon Stead, Denon vice president-product development, called HEOS an “extremely large project” for Denon that’s “very significant for the future of our business."

Asked how Denon plans to wrest the wireless multiroom music business from market leader Sonos, Stead told Consumer Electronics Daily Denon will tap into its longstanding dealer relationships. He wouldn’t break out the margin structure Denon will offer, which is certain to shape up as an immediate lure for specialty audio dealers who for years have lamented the computer-like margins of the Sonos system. “We've been in this business a long time,” Stead said, “and we know what the margin expectation of our channel is.” Denon’s entry into the wireless multiroom audio segment was foretold at the recent ProSource meetings (CED May 16 p5).

But specialty dealers may need to wait. Denon plans a limited rollout for the HEOS system when it begins shipping in a few weeks to one “key” retailer in the U.S. and another in Europe. When asked if Denon would expand its distribution for the new product line, Stead said plans are for just the opposite. “Potentially [we will],” he told us, “but we don’t feel we need to do that because everyone is asking for it.” After a somewhat short exclusivity period, Denon plans to open up distribution to a somewhat broader dealer base, Stead said, not disclosing the U.S. retailer that will have the initial exclusivity.

Denon has its hands full trying to get the consumers’ ear when Sonos owns such a commanding share of the market. While Sonos is sold at Target and h.h. gregg on one end along with Magnolia stores and custom electronics dealers on the other, the company has even grabbed a foothold in some circles as the standard-bearer for luxury multiroom audio. A recent Sotheby’s ad listing a nine-bedroom Newport mansion for a summer rental included a Sonos sound system throughout the home as one of the amenities along with a chef’s kitchen and massage room.

Acknowledging Sonos’ dominance, Stead said, “Anytime there’s a market change like this where there’s a fast-mover that takes 100 percent share early on … that never lasts forever.” He cited Denon’s loyal customer base and “really strong global channels” in both consumer electronics and custom channels. “The way we're going to go after Sonos is broader product lines and give them a lot of pressure in the channel,” he said. The Sonos specialty dealer base needs “alternatives and competition,” he said. Unlike the Sonos system, the Denon system doesn’t require a bridge to connect to a homeowner’s router, which Stead attributed to today’s “more robust” routers that make a network within the Wi-Fi network unnecessary. Denon sells an optional $99 Wi-Fi range extender, he said.

Denon plans to build off of the first round of products -- amplified speakers at varying sizes and price points from $299 to $599 -- with additional products to follow. The systems now are “CD-quality and below,” but the company plans to support high-res audio next year, Stead said. He said “the best thing to happen to audio in a while is the availability of high-res audio through cloud-based services” because currently on the consumer side, “you always need a Ph.D. to figure out how to get high-res content into your home system.”

Round two of HEOS introductions from Denon is due in September when the company plans to launch HEOS Link and HEOS Amp. The former plugs into any powered audio input including an AV input for an AV receiver to bring a zone of HEOS into a room with existing equipment, he said.

Sonos has established a commanding lead on the services side where it now has 26 services, including MLB.com. Denon will leave the gate with Spotify, Pandora, Rhapsody and TuneIn Radio, with plans to update the platform every “quarter or so” with “two or three additional” services via a software update, Stead said.

HEOS uses Waves’ MaxxAudio compression technology to “absolutely get the most out of the speakers so we can push them really, really hard,” Stead said. Audio limiters prevent distortion or damage to the drivers, but the speakers deliver “significantly more bass and sound-pressure level” than otherwise possible from a small box, he said.