In January, 2018 Consumer Intelligence Research Partners (CIRP) estimated that Amazon Echo/Alexa controlled 69% of the U.S. smart speaker market. Google Home owned the remainder, with a tiny percentage going to Apple’s HomePod. More than a year later, new CIRP data shows roughly the same breakdown, with Amazon maintaining a 70% market share.
76 million units. Based on its newest survey, the firm said “the US installed base of smart speaker devices is 76 million units, up from 70 million units in the March 2019 quarter and 50 million units in the June 2018 quarter.” Other surveys argue there are more than 100 million units in American homes.
U.S. smart speaker market share (millions)
Source: CIRP (8/19)
Market share largely unchanged. CIRP says Google Home now has 25% of the market and Apple HomePod has 5%. A year ago, the numbers were almost the same with HomePod at 6% and Google Home at 24%. Since that time the HomePod has come down in price $50 ($299). That may have driven incremental sales but hasn’t fundamentally changed the competitive dynamics of the market.
This is largely because the vast majority of sales exist at the low end of the market. According to CIRP, more than 50% of sales are entry-level devices: Amazon Echo Dot and Google Home Mini
Echo Dot and Home Mini: percent of installed base of smart speakers
Source: CIRP (8/19)
Pricing driving adoption. Amazon has consistently and aggressively discounted its Echo Dot to maintain and grow its share of the smart speaker market – most recently, during Prime Day. Indeed, the company said that Echo Dot was its top-selling device during the sales event. Google has largely matched Amazon’s pricing to keep pace.
At least according to CIRP data, fewer people seem to be responding to the array of higher-end speaker and smart display devices that both Amazon and Google offer. And buyers don’t seem to be paying any attention at all Samsung’s Bixby and the Cortana-powered devices that are still in the market.
Usage numbers are different. In the broader virtual assistant market, a recent survey by Microsoft found that consumers were using Siri and Google Assistant equally (36%), followed by Alexa (25%) and then Cortana (19%). The top use cases were:
- Searching for a quick fact — 68%
- Asking for directions — 65%
- Searching for a business — 47%
- Researching a product or service — 44%
- Making a shopping list — 39%
- Comparing products or services — 31%
- Adding items to a shopping cart — 26%
- Making a purchase — 25%
- Contacting customer service or support — 21%
- Providing feedback for a product/service — 19%
Unfortunately, the survey didn’t distinguish carefully between virtual assistant usage on smartphones and smart speakers. However, you can assume the uses above are predominantly happening on smartphones. But it does illustrate the marketing and commerce potential for smart speakers.
Why we should care. The realization of the full potential of virtual assistant powered devices depends on greater adoption of smart displays or the tighter integration of smartphones with smart speakers, which Google is trying to do.
So far, however, smart speakers have failed to materialize as a meaningful search or commerce channel despite their promise. A metaphor for the underperformance of the segment is the existence of more than 80,000 Alexa skills without a major success.
The first generation Echo was introduced in 2014. It will probably take another five years for these devices to mature and become viable marketing, commerce or customer service tools – if they ever will.
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