Sonos (SONO) has secured a major landmark ruling that bans Alphabet’s (GOOGL) Google from importing some phones, laptops, and speakers made overseas. The U.S. International Trade Commission (ITC) has issued a ban prohibiting Google from importing the devices for allegedly infringing on Sonos’ patented inventions. SONO shares were trading 4.2% higher in the pre-market trading session on January 7 at the time of writing.
Sonos specializes in wireless smart home sound systems. Its solutions are used in streaming services worldwide, allowing customers to access music, internet radio, and podcasts. Sonos’ earnings report for Fiscal Q1 2022 is scheduled for February 09, 2022.
Patent Infringement
Google is accused of infringing on Sonos’ patents for its home audio systems.
Sonos has dubbed the ruling by the ITC an “across-the-board-win.” Google has 60 days to implement the pre-approved software changes to avoid a complete ban. In addition, the tech giant is prohibited from selling any products that already infringe on Sonos’ patents.
The ITC order does not specifically mention the Google devices that will be banned. However, Bloomberg reports that some of the devices may include the Nest Hub, Nest Wifi point, and Pixelbook laptops.
While Google insists it can work around the patents, it’s been labeled a copycat by the commission. Sonos has said that its ultimate goal is for Google to pay royalties.
Stock Rating
Last month, Morgan Stanley analyst Kathryn Huberty reiterated a Buy rating on Sonos with a $49 price target, implying 69.73% upside potential to current levels.
Consensus among analysts is a Moderate Buy based on 2 Buys. The average analyst price target of $49.50 implies 71.46% upside potential to current levels.
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