Personal Finance

The 3 Best-Selling Smart Speakers of 2018

Amazon Echo smart speaker on a countertop

This past year has been a big one for smart speaker sales growth. Nearly 90 million of these devices will be shipped in 2018, compared to just 32 million in 2017, according to data from Strategy Analytics. For a few years, Amazon 's (NASDAQ: AMZN) Echo devices dominated the market, but lately, devices from Alphabet 's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google have stolen some of Amazon's thunder.

Smart speaker shipment data for the fourth quarter of 2018 isn't available yet, and the companies don't disclose exact sales numbers for their devices. But based on the most recent smart speaker shipment data from research firm Strategy Analytics, Google Home smart speaker devices (which include the Google Home Mini, Google Home, and Google Home Max) and Amazon's Echo lineup (including the Echo, Echo Plus, Echo Spot, Echo Dot, Echo Show, and Echo Look) are easily leading the pack and handily outpacing No. 3 player Alibaba (NYSE: BABA) . Take a look:

Smart Speaker Maker 2017 Shipments(Q1 to Q3) 2018 Shipments(Q1 to Q3) Change (YOY)
Amazon 9.9 million 16 million 62%
Google 2.8 million 10.8 million 286%
Alibaba 0.1 million 3.7 million 3,600%

Data source: Strategy Analytics. Chart by author. YOY = year over year.

Last quarter, Amazon captured about 32% of the smart speaker market, followed by Google at 23%. However, investors should keep in mind that Google could take the top spot very soon. In the second quarter of this year, the Google Home Mini smart speaker -- the smallest and cheapest of Google's lineup -- was the best-selling smart speaker globally, just beating out Amazon's Echo Dot.

Investors may also want to keep an eye on what's happening in the third-place spot. China is already the second-largest smart speaker market, and neither Amazon nor Google sells their devices in the country . That gives China-based vendors like Alibaba, Baidu , and Xiaomi the opportunity to grab significant worldwide market share as China's smart speaker market grows.

Amazon Echo smart speaker on a countertop

Image source: Amazon.

Why all of this matters

The global smart speaker market is expected to reach $30 billion by 2024. That may not sound very big, but investors should keep in mind that Google and Amazon benefit from these devices far beyond their initial sales.

For example, Amazon Echo owners already spend about $1,700 per year buying items from Amazon's website, which is $400 more annually than the average Amazon Prime member. Users can easily make Amazon purchases through their Echo speakers by simply telling the device what they want to buy. That additional spending through Echo devices could add $10 billion to Amazon's sales by 2020, according to RBC Capital.

Additionally, Google benefits from its Home smart speakers in the same way it does from online searches. Google makes its money selling ads based on the data it collects from user searches, and it's taking the same approach with its smart speakers. The more that people use them to ask questions, the more Google learns about those users, and the more targeted its ads become.

Smart speakers are quickly moving out of their initial early adopter stage and are becoming more popular among average consumers. Amazon and Google are ideally positioned to benefit from this growing market.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Amazon, and Baidu. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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