Amazon will continue to dominate the smart speaker market into 2019
Forecasts come at the heels of studies finding that smart speaker usage is evolving beyond the kitchen
TL;DR
- According to eMarketer, Amazon will capture 63% of the US smart speaker market in 2019, maintaining a healthy lead over Google (31%)
- Smart speaker usage is forecasted to increase 15% YoY in 2019
- Despite the proliferation of devices and healthy rise in apps, consumers tend to gravitate to basic functions on speakers
- Companies are broadening product lines at varying price points and device complexities to maximize appeal
- Adobe Analytics has found that, while smart speakers were largely marketed as “kitchen devices,” they’ve now begun to move to living rooms and bedrooms, and with deeper integrations with other IoT devices
$0.02
As a refresher:
- Smart speakers are powered by conversational / voice interfaces
- These are the digital assistants that you can speak to, such as Siri, Google Assistant, Amazon Alexa etc.
- These assistants are powered by natural language processing capabilities that leverage machine learning (artificial intelligence) to digest voice queries, reconcile them with a database of information, and spit out a response
- Therefore, smart speakers are basically the physical manifestation of conversational interfaces
Google was the first of the tech giants to dedicate strategic focus and capital to perfecting voice technology. The company predicted that voice would become the next big interface and would reduce friction for consumers trying to do things like find information and complete tasks. In fact, given the amount of rich data that it has to train its natural language processing capabilities, the Google Assistant is considered the most accurate of all the conversational interfaces.
However, Amazon has beaten Google to actually “productizing” conversational interfaces by launching smart speakers. Amazon’s objective here is to create a frictionless “gateway to commerce.” The logic is, instead of visiting the Amazon site, you just tell your smart speaker, “hey Alexa, order me more toilet paper.” The problem is, like any nascent technology, people aren’t comfortable, or familiar, with the “new.” In fact, as seen below, most consumers are still using smart speakers for basic tasks like playing music and asking questions.
But you can’t exactly blame people for being skeptical. There has been plenty of bad press surrounding smart speakers and their clumsy mistakes. Who would want to trust their financial information and purchases with something that hasn’t been perfected yet?
Google has some additional objectives. By getting enough people into using voice technology, they can movie beyond search, display and video ads, and into voice ads. This could help advertisers connect with consumers in a brand new way altogether. But even Google has had its share of voice ad blunders. And even Amazon could get in on the advertising action — the company is now the third-largest digital ad platform in the US.
But right now, it’s in all of these companies’ best interests to study consumer habits and perfect the user experience before aggressively trying to monetize. This will hopefully bring about more unique and experimental ways to use voice technology and leverage the power of an entirely new interface.
