While the quarter-by-quarter battle for smart speaker market share gets all the attention, the longer-term struggle to change consumer behavior has just begun.
There is little question that smart speakers are rapidly growing in popularity, or that it’s a global phenomenon. The latest numbers from several market research firms show growth is accelerating. Canalys estimates in the second quarter of 2018, the worldwide market grew 187 percent over the same period a year earlier, with shipments in the most recent quarter alone hitting 16.8 million units.
It’s not just the U.S., U.K. or Europe in play. China has emerged as a hot market. Globally, “in Q2 Amazon still had almost half of the market, Google a quarter and the rest is shared by Chinese players” and Apple, said Simon Bryant, research director for U.K.-based Futuresource Consulting.
There’s some dispute among market watchers as to who’s winning. Canalys recently claimed that in Q2, as it did for the first time in Q1, Google Home models beat Amazon Echo devices in shipments, 32.3 percent to 24.5 percent. Canalys seems alone in putting Google first. Both Futuresource and market researcher Strategy Analytics place Amazon on top. In Q2, Strategy Analytics gives Amazon 41 percent, and Google 27.6 percent.
But all three agree that Google is on the upswing. And they seem to concur that Apple is tucked well below Amazon and Google, accounting for between 4 and 6 percent of smart speaker shipments for the researchers that provide a specific Apple estimate.
But the surprising and strong number three isn’t Apple. It’s Alibaba. It and other names largely unfamiliar to U.S. consumers are pushing hard in China: Xiaomi, Dingdong and Baidu, all with their own low price points and channels of distribution. “Prices are dirt cheap, novelty/gimmick is definitely a factor, but also voice is more commonly used in China, via mobile,” said Bryant.
Yet are all these devices dramatically changing our lives after we buy them? Yes and no.
Futuresource, in addition to tracking smart speaker shipments, also tracks consumer behavior. As smart speaker purchasers move from experimental early adopters to mass everyday consumers, what we’re using the Talky Tinas for is shifting more to the tried-and-true from the new-and-novel.
In research conducted in April with consumers in the U.S., U.K., Germany and France, Futuresource found that, like nearly a year earlier, the top two uses of smart speakers were listening to music (growing from 69 to 84 percent) and checking the news (a slight decline from 54 to 52 percent). Also in the top four and growing were traffic information and setting reminders and alarms.
But starting at a low percentage and getting less popular? Using a smart speaker for controlling appliances or heating, or making online purchases, or playing games. All are declining, and tallied at less than 25 percent in Futuresource’s most recent survey.
I decided to check in with my informal social media hive mind with a public ask about what owners use their smart speakers for the most — and if it’s changed any aspect of their daily lives. Music, news and weather also rose to the top in these anecdotal responses, with repeated mentions of alarms and to-do lists and controlling house lights.
There was a hint of anxiety as well.
Shopping fears surfaced. “We accidentally bought some goofy movie,” one responded. “The good news is that Amazon was great about refunding our $3.99, but it caused enough alarm that the next accident would be more. So I pulled that off of the settings, we can’t do that anymore.”
So did concerns about privacy, with several people stating they actively used the microphone mute functions, often after odd outbursts from Alexa. “The other night my Alexa decided out of nowhere that she wanted to play ‘Name that Tune,’” one wrote. “It was great fun, but then just disappeared.”
Music 🎵 all day long – but it’s just replacing streaming via mobile app + BT speaker. Voice is just more convenient. A distant second is adjusting the thermostat.
— Dan Seeley (@DanSeeley) August 16, 2018
“I think it’s fair to assume a high proportion of smart speaker demand is fueled by intrigue, novelty and certain gimmicky features which consumers tire of over time,” Bryant told GeekWire. And as the market has moved to the mainstream, Bryant said, there is less enthusiastic use of new consumer electronics. So the blend of ownership affects what’s most popular.
We have 3 Echos and use them for music everywhere (especially our live-in 4 year old granddaughter who orders Alexa to play songs to which she can dance tap or ballet). We also use them to control 2 lamps.
— Douglas Stein (@douglas_stein) August 16, 2018
However, at the same time, owners are using smart speakers more often the longer they have them. “In a survey we did earlier this year nearly half said use has increased because they have realized how much time it saves them,” Bryant said. It’s those “regular routine activities” like turning on the radio and starting cooking timers that are stimulating repeated use, even if the uses don’t represent the full range of what a smart speaker can do.
Alexa, play the news flash
— Mark DeLoura (@markdeloura) August 16, 2018
Still, it’s important to remember that smart speakers are themselves new. How new? “In years if you’re counting it’s three, since essentially I became me,” my home office Alexa said when I asked her age. “Before that, I wasn’t. Which sounds quite unpleasant. Because me, is what I like to be.” Amazon Echo turns four in November and I can’t wait for the next birthday rhyme.
That newness means some obstacles are still being overcome. Futuresource’s research found that what consumers didn’t like about their speakers included poor understanding of different languages and voices, poor accuracy of responses, and “insufficient range of command buttons.”
But that newness also means there are many more potential uses, and places, for smart speakers to spread beyond the home. Both Arizona State University and Saint Louis University have put them in dorms as student helpers. Marriott is putting them in hotel rooms.
“Our consumer research shows a strong use case with the elderly – keeping them company but also performing practical support for assisted living. We have also seen kids using them,” Bryant said.
As a result Futuresource, which very early this year had thought the smart speaker market would reach saturation in developed markets like North America by 2020, is extending that time horizon to 2021 or 2022. “The worldwide market has plenty more growth potential,” said Bryant, noting the explosive uptake in China and other factors have caused Futuresource to revise its forecasts upwards.
And even eventual market saturation doesn’t mean voice interaction will go away. Far-field microphone voice control will simply be built directly into more devices, Bryant said, including more with screens.
The voice genie? Now out of its bottle. And spreading, fast.