They run a routing/cross-auth system so you can stream from other IP-based audio services directly to your speakers. They aren’t entirely a hardware company and those integrations are a value-add for a lot of consumers. I think you should be able to run them in some kind of offline mode, though.

They at least need an update server so they can receive security patches. Once you need that, it's a slippery slope to depending on lots of things in the cloud.