Market Insight

Smart speakers: Come one, come all

October 12, 2018

Blake Kozak Blake Kozak Principal Analyst, Smart Home and Security Technology
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New smart speakers flooding the market

With Facebook’s recent release of Portal+, its first smart speaker/display, and with Google’s debut of Home Hub, its first native smart speaker/display, the upcoming holiday season in the United States could be a bellwether for the future of smart speaker form factors.

Amazon held commanding market share in 2017

While recent product launches from Google, Amazon and Facebook are beginning to reveal their strategy roadmaps, in the fierce battle for market share and consumer attention, none of these devices will drastically move the needle. Amazon’s smart speaker share globally in 2017 was about 57 percent, followed by Google at 22 percent.

Consumers soon have to make a choice

With their new devices, Facebook and Google have each decided to focus on security and privacy. For Google, that means not including a camera, while for Facebook it means no facial recognition, no recordings, available options to disable cameras and microphones, and a privacy shutter for the camera. These privacy-minded features are very different from the Echo Show Second Generation, announced by Amazon just a few weeks ago, which includes a camera, but no privacy shutter.

Since the Google Home Hub has no camera or smart home radio-frequency (RF) protocols except Bluetooth, the device will likely focus on tight partnerships and its own Nest ecosystem, rather than trying to become a truly agnostic hub. Amazon, on the other hand, is very focused on an open ecosystem (e.g., ZigBee capable) and Ring integrations, which includes a user interface that is not quite up to par with Google’s newly released Home App and Home Hub.

More specifically, Google has taken a similar approach to Apple Home, when it comes to how devices are managed and ordered. Although Amazon just released an updated app, Google and Apple are still ahead of Amazon in their user interfaces. Facebook Portal is also very different from the Google and Amazon offerings. Facebook has no control over smart home devices and offers only Facebook Watch and a few others, but Netflix, HBO and Amazon Prime were not included at launch. Therefore, the Facebook smart speaker/display will be great for video chat, but not much else, in terms of smart-home functionality, aside from its integration with Amazon Alexa. Overall, Amazon and Google lead Facebook’s speaker/display in proprietary video content and the ability to control smart home devices.

Asia becoming the top market for smart speakers

Despite the recent news coming out of North America for smart speakers, the recent smart home devices report finds that the Asian region is not far behind. Led by Alibaba, SK Telecom, Korea Telecom and Xiaomi, IHS Markit estimates there were about 6.3 million smart speakers shipped in Asia in 2017, compared with 25 million in the Americas and 4 million in the EMEA region. By 2022, Asia is forecast to have about 17 million more smart speaker shipments compared with the Americas region. However, due to the late entry of smart speakers into Asia, the installed base is forecast to remain less until at least 2023 compared with North America.

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