“Alexa, what’s the top gift to buy this holiday season?”
There are a lot of products vying for that distinction, but the Amazon Echo, powered by Alexa, is certainly a popular option this year. However, while the Echo is currently the best-selling smart speaker, other brands are battling to claim market share.
Consumers can choose between Amazon Echo, Google Home and a mix of other brands such as Sonos One (which uses Alexa) or Harman Kardon Invoke (which uses Microsoft Cortana), but what’s missing from the choices is an Apple product—at least for a little longer anyway.
Apple is missing out on the opportunity to snag market share this holiday season. The expected December 2017 release of its HomePod was pushed back to early 2018. HomePod was expected to be a big player this holiday season, and this delay could be costly for Apple because it may mean more consumers will lock into Amazon or Google ecosystems. On the other hand, Apple has a history of coming from behind to snag market share with different products—so we’ll have to wait to see how well it competes in the smart speaker space.
The Evolution of Smart Speakers
Amazon first introduced the Echo in 2014, mainly promoting it as a way to control music playback with your voice. Now the Amazon Alexa technology that powers the Echo has more than 15,000 skills, which include controlling smart home appliances, listening to news and podcasts, making credit card payments and even ordering pizza, just to name a few. Over the past year, Amazon has highlighted some of these skills in a clever campaign with more than one hundred 10-second spots of people asking Alexa funny things, typically in order to further demonstrate use cases. Use cases are typically a challenge for new technology adoption so the ads are a smart move.
Google Home, powered by Google Assistant, was released in 2016, shaking up the smart speaker market. Google Home has fewer applications, partly because it’s not been on the market as long, but according to one article, “many Google Home owners still believe that, in the long run, Google Home will prove to be a more robust platform than Alexa.” With mobile devices powered by Android (also a Google product) using Google Assistant, this could be a more seamless option for many consumers who are already integrating the Google platform in their daily routines. Amazon lacks a similar mobile platform, and while that’s not the case for Apple, time will tell if the Fruit takes a bite of the pie.
eMarketer predicted Amazon Echo to hold 70.6 percent of the market share in 2017, with Google Home holding 23.8 percent. The small remaining market share is split between other smart speaker brands.
Amazon and Google continue to launch new variations of their smart speakers, such as Echo Plus, Echo Spot, Google Home Max and Google Home Mini, at various price points, further ramping up the competition this holiday season.
Meanwhile, voice-based technology is making a big impact in how consumers interact with the digital world. For example, 90 percent of smart speaker owners initially purchased smart speakers to listen to audio, according to the Smart Audio Report conducted earlier this year by NPR and Edison Research. However, smart speaker users started managing more tasks such as timing laundry or checking the weather, gradually integrating the technology more and more into their routines.
In fact, 42 percent of smart speaker owners say smart speakers are essential to their everyday lives, demonstrating the impact the technology is having.
The Future of Smart Speakers
There is great potential for media companies to tap into the smart speaker consumer base, which many are already doing. Many consumers love being able to multi-task while selecting music, news, podcasts or other content with their voice.
Perhaps the biggest potential for smart speakers are as a hub for a host of smart home appliances. While the smart home has seen slow adoption, partly because there were no voice-enabled unifying control devices available, smart speakers are easy to use and could speed up adoption of the smart home and the overall Internet-of-Things among consumers.
When considering the future of smart speakers, it is important to remember that the speakers are simply the medium for the underlying technology of artificial intelligence (AI) assistants, such as Amazon Alexa, Google Assistant, Apple Siri and Microsoft Cortana. While exactly how these products will evolve remains to be seen, it is clear that voice-based technology will continue to change the way many consumers engage with the digital world.
This holiday season will likely prove to be a key time for more consumers to adopt smart speaker technology. Amazon started off the holiday season strong, as the clear winner over Thanksgiving weekend, beating out competitors by a wide margin. The Echo Dot was Amazon’s best-seller globally across all categories.
In the final countdown to Christmas, Amazon is still forging ahead while other competitors try to make up ground, a battle that will carry on into the new year.