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Smart Speaker Market Grows 843% in Units in Q2 2017, While Q3 is on Course to Break More Records (Year-on-Year)

4.2 million Smart Speakers shipped in Q2, with sales dominated by the US and UK markets despite availability extending to Germany, China and South Korea during the quarter. Adoption in the US and UK has been relatively swift, with penetration standing at 6% and 3% respectively and with each home owning a little over two speakers per home, on average.

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.

While Amazon maintain over 90% of installed units, the potential for VPAs to be the next-generation interface, particularly in the smart home, has created a platform race with Amazon, Apple, Google and Microsoft all launching new products (including via 3rd party vendors) to drive penetration of their platforms. Between IFA and CES, Futuresource anticipates several audio hardware vendors to introduce products with VPA support, in most cases supporting one of the aforementioned platforms.

The smart speakers market is driven by a degree of novelty, which is expected to dissipate over time. However, Futuresource consumer research shows usage and satisfaction with smart speakers is high, with 46% of owners using them daily in the US. Usage is heavily focused around controlling media with voice, with a negligible share of Echo’s 15,000+ skills used on a regular and ongoing basis.

In terms of integration of VPA’s into devices, the focus has been on smart speakers as they provide the optimum combination of features, functionality, affordability and market growth to introduce the concept of VPAs to consumers. However, future growth of smart speaker demand will be affected by integration of VPAs in to other device categories. Successful deployment in a broader portfolio of devices will limit the requirement for smart speakers and multiple device ownership. Various levels of VPA functionality will appear in devices throughout the home as well as cars, public places and in mobile devices.

As VPAs start to be integrated into devices beyond smart speakers, Futuresource forecasts that adoption will ramp up to exceed 25% of sales of CE ‘home’ devices by 2021.

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Simon Bryant

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Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.