Can You Hear Me Now? — The Rise of Voice Assistants

UnfoldLabs
Jul 11, 2017 · 10 min read

2017 is predicted to be the year of voice-first devices like Amazon Echo and Google Home. Voice assistants, or smart speakers, have fast become the trend in the tech world. According to ComScore, by 2020, 50% of all searches will be done by voice.

It started when Apple released Siri in 2011, which was not only able to recognize speech, but understand information and come up with answers. This was followed in 2014 by Microsoft’s digital personal assistant, Cortana. In November of the same year, Amazon announced the release of the voice speaker, Echo, which is powered by Alexa and has come to include the Echo Dot and Tap. Not to be left behind, Google introduced its answer to Amazon’s Echo, Google Home, and yet to be released late this year is Apple’s HomePod. The war for the voice assistants has heated up and many more devices are yet to be seen.

Gartner predicts that 30% of our interactions with technology will be through conversations with smart machines, so it’s easy to see why each manufacturer is trying to gain control over the voice assistant market.

Stats on AI, Voice Assistants

· eMarketer reports that Amazon has about 70% of the market for voice-activated speaker systems and Google Home has 24%

· According to PC Magazine, Google Home has 200 third-party skills, but Alexa has over 11,000

· Consumer Intelligence Research Partners (CIRP) estimates that 8.2 million people own an Amazon Echo device

· A study by VoiceLabs predicts that in 2017, 25 million voice assistant devices will be shipped

· Technavio reports that by 2019, the voice recognition market will be a $601 million industry

· Activate estimates there will be 21.4 million smart speakers by 2020

· According to Gartner, by 2020 the VPA-enabled wireless speaker market will be a $2 billion business.

Voice has become a gold mine for activity, AI is growing Stronger

What first started with voice assistants on phones, such as with Siri, has evolved to voice assistant devices for homes. These devices have at least one thing in common, to provide assistance for countless tasks, all by using one’s voice.

The role of AI is becoming so strong that tech industry leaders like Bill Gates and Elon Musk believe that it could become a threat to humans. These machines have the potential to become “smarter.” AI, which will become faster, more intelligent, and more like humans, however, doesn’t only refer to voice assistants. Other applications include self-driving cars, customer service, concierge services, consumer behavior, smart home technologies, and in medicine. Recently, Google Home called the police when a couple was allegedly involved in a violent domestic dispute.

The holiday season in 2016 was amazing in terms of sales of Voice Assistants.

The evolution of voice recognition systems

APPLE

Apple jumped into the smart speaker market that is already led by Amazon and Google by announcing HomePod that will be available by December 2017. Not only does it give users access to Apple Music through voice interaction with Siri, it is also able to analyze music and adapt to what is being played to provide the best sound possible. Like the Amazon Echo and Google Home, HomePod has other functions like answering questions and controlling your smart home accessories — all through voice commands.

The ecosystem is certainly expanding with more and more devices. Each device claims to do more, do things better, do things faster, and do things more accurately than the other. Home automation with IoT has been a growing market as well. IoT based home products and services include not only voice assistants, but other AI assistants like wi-fi sprinkler controls and thermostats, appliance and light controls, keyless door locks and doorbell cameras, and even devices that allow you to control home electronics from anywhere.

Amazon

Compared to other voice assistants, the Amazon Echo has been the most successful. Not only was it the first to be released, but it’s tie to Amazon gave it a great deal of exposure to millions of consumers who shop on Amazon.com. Alexa has taken the voice assistant market by storm with crowd sourcing of Alexa Skills. These skills that make Alexa “smarter” are developed by people through Amazon’s Developer Portal and can handle anything from simple to complex tasks.

Though very successful with crowdsourcing the Alexa Skills, the number of data sets that Amazon could offer is still less. The data sets that Amazon has are centered on shopping, playing music and the usual tasks, their range of success is slower. However, that can all change when they get more data sets. More data sets, means more capabilities.

Amazon has also opened up Alexa for 3rd party OEMs to create more solutions and devices which has helped them build on their skill sets.

Google

A critical factor in Google Home’s success is that Google already knows so much about its users. Its search capability and voice control is also superior. Moreover, with Chromecast Audio, users can stream the same song or podcast to speakers in different rooms simultaneously using voice commands — a feature that Alexa doesn’t have.

Others

The obvious result is that the market will get even more crowded with all the other manufacturers wanting a piece of the action. However, this isn’t necessarily a bad thing. An advantage to having other players is they add value to the AI Assistant ecosystem. Specializing in specific tasks, like the Aristotle that functions as a baby monitor and a learning toy, will help targeting specific consumers.

Our Take on the Products: A Competitive Analysis

Other Important aspects that play a role

On the other hand, China has a growing smart home market. Beijing LingLong Co.’s DingDong, although able to understand Mandarin and Cantonese, faces a challenge when it comes to understanding all the different accents and dialects.

Connectivity also plays a role in voice assistants as all these devices need to get connected to their respective network servers for voice and data processing. Hence for geographies where connectivity is an issue, these devices will not be useful.

Language is another factor that needs to be taken into consideration. Right now, with the exception if Siri, which “speaks” 21 languages, English is the predominant language these devices “understand.” Therefore, it still remains to be seen who will win the race for voice assistants to cover other languages to capture the global market.

As popular as AI Assistants have become, there’s always the drop off of usage that is common with new tech gadgets. One of the reasons for the drop off may be that there is not enough repeated usage. For example, an app may be downloaded but it will only be used once. Likewise, a function, such as asking the assistant to read the news, may not be something that is done on a regular basis. In other words, these assistants are being used for different tasks, just not repeatedly. Another reason may be that consumers purchase assistants out of curiosity and find it’s not a gadget they need to use on a daily basis.

Retention strategies for these OEMs include:

· Finding ways for skills and apps to be used more consistently

· Marketing devices as a gadget for the mass market and having consumers not consider them as a novelty item, but rather as a need

· Making it simpler for consumers to setup and control multiple devices

· Creating devices that are compatible with each other

Our Take

AI, although it has seen many advances, is still in its infancy. With Siri only having been released less than 10 years ago, there is much that remains to be seen in the world of Artificial Intelligence. For Voice Assistants to succeed and continue to interest consumers, they need to be integrated with more data sets, become more conversational and predictive. Devices can be improved so they have more of a human quality that potentially results in a more human-like conversation. The challenge will also be to become real assistants in the sense that they should have to ability to help us before we ask for help. It will certainly be a challenge, but AI has already come so far, why not push it further?

Based on our experience — we think that Amazon & Google will continue to be leaders in this market — as they have invested a lot of time and money on Voice, Natural Language Processing and artificial intelligence. Google stands tall in terms of Datasets that it has and has acquired over the years, but Amazon’s approach to crowd sourcing datasets and maybe M&A’s in the near future will be a force to reckon with. It’s going to be an interesting next few years.


Have you used any of the devices mentioned above — and if so — which ones? What is your opinion on this topic?


This post was written by Asokan Ashok, the CEO of UnfoldLabs. Ashok is an expert in driving customer insights into thriving businesses and commercializing products for scale. As a leading strategist in the technology industry, he is great at recommending strategies to address technology & market trends. Highly analytical and an industry visionary, Ashok is a sought after global high-tech industry thought leader and trusted strategic advisor by companies.

Entrepreneur. Inventor. Product Ideation. Strategist. Visionary. Evangelist. Architect.


For any comments or discussions, please feel free to reach out to Ashok or UnfoldLabs at “marketing-at-unfoldlabs-dot-com”.

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