Published on: November 14, 2019
Smart speakers are Internet-enabled speakers that are controlled by voice commands. It can stream audio content, relay live information such as weather and traffic updates, and communicate with other smart devices at home, through Wi-Fi, Bluetooth, and near-field communication (NFC) technology. Smart speakers are also available with displays. We categorize the smart speaker market as a part of the consumer electronics market. The consumer electronics market covers manufacturers of consumer electronics products including TVs, home audio equipment, game consoles, digital cameras, and related products. Our report on the smart speaker market provides a holistic analysis, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis of around 30 vendors.
The growth of the global smart speaker market has been primarily driven by increasing unit sales in both the residential and commercial user segments. The increasing consumer expenditure on home renovation and upgrades for smart homes will further spur the demand for smart speakers during the forecast period.
The global smart speaker market will witness an incremental growth of USD 14 billion between 2018 and 2023, thereby offering significant growth opportunities for market participants. The residential user segment is expected to observe the fastest growth, growing at a CAGR of 24% during the five-year forecast period. It will also remain the largest segment constituting more than three-fourths of the total smart speaker market in 2019. North America will comprise around 38% of the global smart speaker market. Meanwhile, the APAC market is expected to grow the fastest, at a CAGR of 23.7% during the forecast period.
Many factors are expected to drive growth in the smart speaker market during the forecast period. Our analysis identifies the following factors to be driving the growth in the smart speaker market:
The unit sales of smart speakers are increasing at a significant rate. For instance, global sales grew at a CAGR of 270% between 2016 to 2018. Vendors such as Amazon and Google have been dominating this market since 2016, with many new companies entering this market over the last few years.
The increasing number of home renovation projects, the growing popularity of digital streaming and over the top (OTT) platforms, and easy integration with other smart home devices are making smart speakers a highly sought consumer electronics device.
Language localization is one of the major factors driving the adoption of smart speakers in emerging and non-English speaking countries. The adoption of smart speakers in non-English speaking countries was low when compared with that of English-speaking countries such as the US and the UK until 2017. However, the scenario changes when smart speaker manufacturers began to offer language localization in product offerings.
Meanwhile, the vendors operating in the market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
The buyers of smart speakers are wary of the potential privacy and security issues in using smart speakers. Vendors offering smart speakers employ thousands of people worldwide who listen to voice recordings captured in smart speaker owners’ homes. The process improves the smart speaker’s understanding of human speech and helps it improve the respond to commands, but at the same time encroaches on the user’s privacy.
The global smart speaker market is facing a significant threat from fake setup apps and support services. There have been instances where miscreants pretend to be the authorized support centers of reputed brands and scam consumers.
The global smart speaker market faces a significant threat from the availability of numerous substitutes such as soundbars, home theaters, and Bluetooth speakers. Some of these devices also come with built-in smart assistants such as Amazon Alexa and Google Assistant.
The global smart speaker market can be segmented into the following:
We provide a detailed analysis of around 30 vendors operating in the smart speaker market, including some of the prominent vendors such as Alphabet Inc., Amazon.com Inc., LG Electronics Inc., Samsung Electronics Co. Ltd., and Sony Corp. Investment, mergers and acquisitions, research and development to improve product are some of the strategies adopted the manufacturers in the global smart speaker market.
Some of the key developments mentioned in our smart speaker market report include:
Backed with competitive intelligence and benchmarking, our smart speaker market research is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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