Smart speakers are the ongoing craze these days with many brands dipping their feet in the smart speaker market. According to Canalys, the smart speaker installed base is expected to cross the 100-million barrier by the end of 2018. This is 2.5 times bigger than the installed base reported at the end of 2017. The growth in smart speaker adoption is expected to continue in the years to come as the total smart speaker market in terms of the installed base is estimated to grow by 125%, to reach 225 million units by 2020.
Smart Speaker Market: Google To Close The Gap With Amazon
There are many major brands offering a variety of smart speakers. Alexa-powered Amazon Echo smart speakers will help the company to account for more than 50% of installed base in 2018. Trailing behind Amazon Alexa, Google’s Home series will account for 30% of the installed base units while Apple’s HomePod smart speakers will stay low at just 4%.
However, in the coming years, Google will soon be closing the gap with Amazon with its Home speakers. By 2022, Amazon Echo and Google Home smart speakers, both are expected to account for 34% of the smart speaker install base. Besides, Apple HomePods are also expected to take a giant leap from the present 4% install base share to a surprising 21% by 2022.
In Q1 2018, Amazon has recorded a whopping 102% YoY growth in the smart speaker market, with 4 million units shipped. While its arch-rival Google has recorded a strong 709% YoY growth, with 2.4 million units shipped. Thanks to its AI-powered Google Assistant. In the next few quarters, the increasing competition will result in the slow growth rate of Amazon, largely due to the increasing penetration of Google Home.
The Increasing Popularity of Smart Speakers Worldwide
In 2017, the top five countries contributing in the global smart speaker installed base was the US with 73%, UK with 10%, Germany contributing 8%, China with 3% and Canada with 2%. However, in 2018, the top five countries and their contribution are expected to change. The US is still expected to dominate the smart speaker market with 64%, while China will stand second with 10%. This will be followed by UK and Germany both contributing 8% and 6%, respectively. Interestingly, this year, South Korea is expected to enter the list of top five smart speaker market with 3% installed base.
As Canalysis report depicts there is a more equal distribution in all the countries contributing to the overall installed base of smart speakers. This is due to the rising popularity of smart speakers and the availability of more options by different brands. Countries apart from the US are also becoming fractionated with these new devices and a user base of smart speakers is building up there.
The Popularity of Smart Speakers: The US Leads The Pack
People in the US are more fascinated towards smart speakers, and this is resulting in the US becoming the home of the maximum number of active smart speakers. The homegrown players Google and Amazon understand the power of the potential market they have in the US. Hence, they have raged an intense price war to get the stronger hold on the smart speaker market.
While analysing smart speakers market in China, Canalys Research Analyst Hattie tags China with ‘sleeping giant‘. He believes that China has a huge potential for global players, likes of Google and Amazon, to grow phenomenally. But the biggest obstacle for these companies is the influence of local brands such as Xiaomi and Alibaba on people. Considering China is always proven to be a walled garden for global brands, Google, Amazon and Apple will have to employ an aggressive marketing strategy and must try to build a loyal customer base.
The smart speaker is a relatively new and interesting technology. There is a huge market potential for such devices, the opportunity window will only become big in the coming years. it is for the time tell which brand performs best and gains the lion’s share of the smart speaker market.