Will Devialet and its several thousand euro speakers collapse?

Few people own a Devialet speaker, but everyone has seen one. The French brand’s “Phantom” systems, known for their original and easily identifiable design (often with very elitist colors, which imitate rare metals), are often highlighted in electronics stores. It is not uncommon to see them on television at celebrities’ homes or in offices, even if the Phantoms offer a much lower quality-price ratio than a HomePod or Sonos speaker.

Despite some attempts at diversification, such as a 2,200 euro soundbar, wireless headphones or partnerships with Huawei or Free, to make the Devialet brand known in more affordable products, the French company is reportedly in serious economic difficulty. . According to Challenges, which investigated the financial health of the company, Devialet is currently struggling to find new funds, with the risk of implosion.

Golden speakers costing several thousand euros: a model that no longer works

Devialet embodies French luxury. Present on the wireless audio market well before the explosion of the connected speaker market (Sonos, Google Home, Amazon Echo, Apple HomePod, etc.), the Frenchman has always focused on the high-end, targeting to people looking for a social marker, to establish themselves.

Its speakers are now compatible with the latest standards (AirPlay, Spotify Connect, etc.), but their prices make them unaffordable for most users. Despite a strong presence in stores, with listening rooms in Fnac stores, in particular, Devialet shines with its image, but does not have a sufficiently solid economic model for a tech giant. Its opening to Huawei and Free, to make the Devialet brand more affordable, is proof that the company is trying to renew itself, without being ready to cut its own prices.

According to Challenges, Devialet requested during the summer of 2024 “the opening of a conciliation procedure with the Paris commercial court”.

This procedure, which can last four to five months, aims to find funds to survive, by bringing new investors into the company’s capital. The problem is that Devialet is currently losing money (despite a positive financial year in 2023) and that the audio market is perceived as difficult by investors.

In its article, Challenges reveals that Devialet’s strategy, “who burned a lot of money in marketing”is contested internally. Two of its executives recently left, as the company considers its next project. Should we go out of the speakers more regularly? Stop partnerships to reconnect with luxury? Focus on new markets like China? Devialet does not seem ready to throw in the towel, since it is preparing a new launch this fall, but its long-term future will require several changes.