Since its introduction in 2014, the smart speaker has gone on to resounding success, finding widespread consumer adoption in households around the world. Last year alone, the global installed base for smart speakers reached 205.7 million, and projections show the number will exceed one billion units over the next five years.
Industry revenue also shows no signs of plateauing, with the market projected to expand in double-digit territory until at least the end of the forecast window in 2024. By then, the global smart speaker market will be worth approximately $23bn, up more than 200% from $7bn in 2019, as shown in the chart below.
These and other findings can be found in the new Omdia report, Smart Speakers Report - 2020, which surveys the current landscape for smart speakers and examines the drivers, players, and trends expected to prevail in the market in the long run. Global shipment units, revenue figures, and installed base statistics are also provided for 19 unique smart speaker platforms, along with the release dates of the devices.
Last year saw the continuation of smart speaker integrations with television sets and with cable companies. This year, Omdia expects even tighter integration between voice assistants with television brands, set-top boxes, and over-the-counter (OTT) devices. Outside of smart speakers, voice assistants will continue to be embedded in other products, such as thermostats, light switches, and security devices.
For their part, brands are currently focusing on creating a more lifelike experience with their offerings, using celebrity voices for appeal; working more closely with healthcare providers to deliver health-positive messaging; and providing Amazon’s smart home services to home buyers.
Other major smart speaker trends playing out today are audio-over-BLE—or streaming audio over Bluetooth Low Energy to reduce power consumption significantly, positively impacting battery life; the propagation of additional portable speakers ; and an increasing emphasis on device portability for enhanced ease of use and mobility.
Currently the market leader, Amazon and its Echo smart speaker is expected to maintain a sizable lead in the installed base until 2024, even though it is forecast to lose more than 15% share of total market shipments from 2019 to 2024. In comparison, Amazon’s chief rival, Google and its Assistant smart speaker, is projected to enjoy an increase in shipments, from 20.9 million units in 2019 to 40.0 million in 2024, Omdia research data shows.
Together, Amazon and Google accounted for 60% of global smart speaker revenue in 2019. The rest of the market was split by a bloc of 17 other contenders, the largest of which included internationally recognized brands such as Samsung, Apple, Sonos, and Bose. Prominent European names, including Orange and Deutsche Telekom, made up a part of this bloc; as did the Chinese giants Baidu and Alibaba, and South Korea’s KT and SK Telecom.
The regional markets
India is poised for strong growth in voice assistants and smart speakers in 2020. Amazon, present in the country since 2017, has released a battery-powered Echo, while Apple has announced it will start selling HomePod. Amazon has a big advantage going into India given the high-profile statements of Amazon CEO Jeff Bezos on partnering with India, but Google has widespread reach given its savvy incorporation of the Hindi language into the Assistant.
Google smart speakers arrived in South Korea in September 2018 to compete against local brands KT and SK Telekom, and the devices are available in Singapore while Amazon’s Echo counterpart is not, giving Google an early-to-market advantage in the city-state. Surprisingly, smart speakers have not gained much traction in Japan because of cultural differences in social norms, along with only a small number of local voice assistants able to support the market.
For Chinese behemoths Baidu, Alibaba, and Tencent, the opportunities for market expansion are colossal. Tencent Music Entertainment has over 700 million active users and 120 million paying customers, while Alibaba is nearing 1 billion in total customer base. In comparison, Apple Music had 56 million paid subscribers worldwide in 2019.
Outside their home turf, however, Chinese brands have met with mixed success. Baidu, for instance, entered the Latin American market in 2013 but had pulled out before the end of 2018. Spain’s Telefonica and other brands have been more successful in the Latin American region, with smart speaker offerings often run on the platform of Chinese telecom giant Huawei Technologies.
Privacy remains a top concern among smart speaker users, an issue made more challenging by the difficulty in determining whether a device has been hacked. Yet smart speakers can help save lives, connecting patients with doctors, and partnering with their users to establish or maintain wellness.
The Smart Speakers Report - 2020 is offered under Omdia’s Components & Devices research pillar. Omdia subscribers also have full access to our Mobile, Consumer & Connected Devices research service covering Consumer Electronics, Digital Signage, Lighting, Mobile Devices, and Smart Home & Appliances.