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VPA (Voice Personal Assistants) Competition in 2017
Futuresource expects voice control to largely disrupt how we interact with our electronics – from controlling our in-car-entertainment, white goods or smartphones, voice is making an impact. With four main contenders in the English language VPA race, Siri, Alexa, Cortana and Google Assistant, there is a lot of ground to fight for, with no clear winner in sight.
While Amazon, Apple, Google and Microsoft are taking vastly different strategies in terms of getting users on their platforms, and with Samsung’s rumoured assistant Bixby, speculated to be released in the coming fortnight, we have a very interesting platform battle developing in 2017.
Often when discussing the VPA market, we also forget the many alternatives available either as smartphone apps or regional products outside of the west. SK Telecom has ‘skinned’ IBM Watson technology with the Korean Language, to offer voice commands and AI assistance in their Nugu smart speaker.
Baidu, the Chinese answer to Google, also has its sights on bringing smart assistant device to the most widely spoken languages in the world, Mandarin and Cantonese. Although Baidu’s VPA speaker form factor differs from other leading VPA’s on the market, including a screen and a camera, the essential uses of the device remain the same – ordering food or other goods, asking questions and interacting with the smart home.
While language coverage is one key aspect of how VPA’s will battle globally for a space in our homes, the business model behind the devices and smart assistant is equally important.
So far, I have mentioned six companies with assistants on the market or expected forthcoming offerings, but background of these companies is important to understand the limitations of the devices and the expected adoption of their use globally.
Apple and Samsung both predominantly create revenue from sales of hardware. Siri has only appeared on hardware that is produced by Apple and is marketed as a unique selling point to Apple products. Presumably, if Samsung do later announce their own brand of personal assistant, we will see a similar model.
Baidu and Google create the vast majority of their revenue from servicing online advertising. While Google has made claims to focus more on hardware in the future, their hardware has usually served to forward their software or advertising products. Baidu’s business model is less varied than Google’s, with a greater focus on online marketing, meaning Baidu’s smart assistant technology will be offered to generate data and therefore better targeted advertising.
Microsoft’s major source of business is its software, however, does gain a substantial amount of sales from other hardware ventures. The company so far has largely invested into their Cortana platform as software, opposed to pushing the assistant as a hardware device. Its PC and gaming platform could prove key strategic assets, in both business and consumer channels.
SK Telecom had announced plans to diversify their revenue streams after citing loses in 2015-2016. The network has a range of products that the Nugu smart assistant can interact with, such as video streaming and cable platforms.
Finally, Amazon is predominantly an online retailer. However, to further generate business on their platforms, Amazon has created several hardware devices linked to their retail products. Although Alexa has been celebrated as being a hugely capable smart assistant, it is sold essentially to drive traffic to the Amazon store and Amazon Prime membership.
As smart assistants continue to become more popular, 2017 will witness many more vendors and products emerge in this space, and we will see how different business model manifest as consumer propositions, and ultimately, which will generate greater traction.
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.