Virtual assistant market on track for 5% growth, while new wave of AI models will boost future expansion

The virtual assistant market is on the threshold of change, with platform owners reassessing strategies for voice as consumer replacement cycles begin to lengthen. Yet despite the slowdown, there is still plenty of market opportunity for vendors. Futuresource Consulting’s latest market tracker forecasts a 5% year-on-year increase in sales in 2023, to end the year at just over 2.1 billion units globally. 

“The players in the virtual assistant industry are looking out over a new and challenging landscape,” says Simon Forrest, Principal Technology Analyst at Futuresource Consulting. “Following the disruption caused by the pandemic, instabilities in the global economy are now pressing down on profits. Nevertheless, the industry has several years of engineering development to draw from, and this is backed up by substantial market investments.  

“As a result, platform owners have the foundations of genuinely new solutions within their grasp. We’re closing in on an exciting period of generative artificial intelligence and neural computation, which will play a significant part in future technology development.” 

AI will transform the VA market 

According to Futuresource, the rise of large language models (LLMs) looks destined to revolutionise the way that voice interfaces develop. These include GPT-4 (the foundations of ChatGPT), Google’s Bard, Amazon’s Burnham, Meta’s Llama and Apple’s Ajax. 

“LLM essentially resets the playing field,” says Forrest. “Generative AI presents the potential for industry players to design more intelligent virtual assistants, so expect to see some new product introductions beyond the popular assistant platforms that we have today. Alongside these innovations, it’s yet to be determined whether platform vendors will maintain their existing and well-known assistant brands or head off into new territory.” 

Monetisation still presents challenges  

Yet monetisation of virtual assistants continues to pose problems for the industry. Consumer engagement with smart speakers is largely invariable year on year, and voice-first interfaces have yet to be fully realised. Challenges continue to surround the influencing of consumer behaviour in ways that result in monetary transactions and additional revenue streams. 

Moving forward, Futuresource expects voice interfaces to endure in consumer devices, with a positive market trajectory that will culminate in 3.1 billion shipments in 2027, representing a CAGR of 9% over the forecast period. 

For further information on Futuresource Consulting’s Virtual Assistants Market Tracking service, or to make a purchase, please contact leon.morris@futuresource-hq.com 

About the author

Simon Forrest

As Principal Technology Analyst for Futuresource Consulting, Simon is responsible for identifying and reporting on transformational technologies that have propensity to influence and disrupt market dynamics. A graduate in Computer Science from the University of York, his expertise extends across broadcast television and audio, digital radio, smart home, broadband, Wi-Fi and cellular communication technologies.

He has represented companies across standards groups, including the Audio Engineering Society, DLNA, WorldDAB digital radio, the Digital TV Group (DTG) and Home Gateway Initiative.

Prior to joining Futuresource, Simon held the position of Director of Segment Marketing at Imagination Technologies, promoting development in wireless home audio semiconductors, and Chief Technologist within Pace plc (now Commscope) responsible for technological advancement within the Pay TV industry.