The smart speaker market is booming, and this year will be a particularly momentous one as adoption accelerates. Tech giants continue to jump into the market and expand existing offerings while fine-tuning their voice-controlled virtual assistants. That has important implications beyond just the device manufacturers themselves, as smart speakers are turning into veritable computing platforms. Third-party services will have an opportunity thrive on those platforms, innovating entirely new revenue models.
There are now nearly 50 million smart speaker users in the U.S.
Voicebot has partnered with PullString and RAIN Agency to release a new report on the growing smart speaker market and related audience, detailing findings based on a national survey of 1,057 U.S. adult consumers. The report points out that smart speakers were the "number one gift during the 2017 holiday season," with 16% of respondents saying they either gave or received one as a present.
Approximately 20% of U.S. adults now have access to a smart speaker, which translates into 47.3 million U.S. users. Note that there's a distinction between smart speaker owners and users. Unlike mobile devices, smart speakers are stationary and can be accessed and used by anyone in the household, so some of the users the study refers to may be users that are not the primary owner.
On average, households contain 1.8 smart speakers, as consumers are increasingly starting to place smart speakers throughout the home in different rooms. About two-thirds of households only have a single smart speaker, 85% of households have one or two, and 15% of households have three or more. A little over 2% of households have five to 10 devices, and 1.7% of households just can't get enough and have more than 10 devices.
That's good news for manufacturers, as there is plenty of upside. Not only is there lots of room for growth in terms of first-time adopters, but also within the majority of households that only have one device. This is why it's becoming increasingly important to offer a diverse range of smart speakers that span various price points .
Amazon owns the market (for now)
Of course, any discussion of smart speakers would be remiss if we don't talk about market leader Amazon.com (NASDAQ: AMZN) . While Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google is making a noticeable dent in the market, Amazon had a dominating 72% share of the installed base in 2017.
Smart Speaker Market Share Installed Base 2017
Data source: Voicebot.
Within "Other," Sonos was the leader, thanks in part to integrating Alexa in its products like the new Sonos One. That means Alexa's overall position is even stronger than just looking at Amazon-branded devices.
Better late than never, Apple (NASDAQ: AAPL) just officially jumped into the market last month with its (delayed) launch of the $350 HomePod. Rumors suggest that the Mac maker is working on a " HomePod Mini " that would be priced at a relatively more affordable $150 to $200. Apple will likely stay out of the low-end part of the market, despite unit growth being concentrated there.
Amazon's Echo Dot and Google's Home Mini, both aggressively priced around $50, are enjoying brisk sales and grabbed a combined 41% of the market last year, according to the report. Sales of Home Mini overtook the regular Google Home in just three months. It's hard to imagine Apple venturing that far down into the market.
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