Voice-activated speakers saw an 843% uptick in unit shipments during the second quarter, with Amazon.com Inc. (AMZN), the undisputed leader in the field, controlling more than 90% of the market.
That’s according to consulting firm Futuresource, which found that across the globe, 4.2 million smart speakers were shipped during the three months ended in June. It expects record shipments for the current third quarter as well. The U.S. and the U.K. were the dominant markets for these voice-activated speakers, which can do everything from read the news and weather to control the lighting and heating in a home. While the devices are finding their way into other countries, including Germany, China and South Korea, the U.S. and the U.K. are seeing the quickest rates of adoption with penetration at 6% in the U.S. and 3% in the U.K. Each home that owns a smart speaker has two, on average, noted Futuresource in a blog post. “The market continues to witness strong growth and its performance remains particularly impressive when considered within the wider market it is most closely associated with—home audio; 38% of home audio devices were voice-enabled in the first half of 2017 in the US,” the consultancy firm wrote.
(See also: Tech Stocks Set for Boom From Smart Speakers.)
New Market Entrants
Thanks to the Amazon Echo speaker, powered by Alexa, the e-commerce giant has been able to maintain its lead in the burgeoning market, but that may not last as its rivals circle. Alphabet Inc.’s (GOOG) Google has its Google Home assistant, while Microsoft Corp. (MSFT) teamed up with Harmon Kardon to launch a speaker powered by its Cortana virtual assistant and Apple Inc.'s (APPL) is slated to roll out its Siri-powered HomePod in November. (See also: Google to Launch New Home Hardware Products.)
Futuresource said it expects more audio hardware companies to launch voice-activated speakers, likely with the help of Amazon, Apple, Google or Microsoft. While there is some novelty attached to speakers that can read your email, Futuresource noted that satisfaction and usage rates with the devices are high with 46% of U.S. consumers reporting they use them daily. Much of the use is centered on controlling access to media via voice commands.
Futuresource isn't the only firm that thinks this market is set to take off. Earlier this month, Barclay’s said the connected home market represents “one of the most significant investment opportunities over the next several years.” As consumers become increasingly attracted by voice controls and appreciate the savings generated from smart gadgets, the connected home industry could be worth several hundred billion dollars by 2020, Barclay’s predicted in a recent research note to clients. Barclays foresees the hardware segment of the market contributing $130 billion by 2020, while software and advertising are expected to reach $170 billion over the same period.