The latest quarterly update on the worldwide audio market is now available from Futuresource Consulting and states that 'home audio' shipments, including wireless speakers, soundbars and hi-fi systems, grew by 25%, accumulating a total of 27 million units during January to March 2018.
"Soundbars and hi-fi systems, especially at the higher end, are demonstrating rising prices on a quarterly basis," commented Rasika D'Souza, Senior Market Analyst at Futuresource Consulting. "In contrast, smart speaker prices fell by 24% year-on-year due to their successful bid for mass-market status. That said, prices did pick up in Q1 versus Q4 2017, thanks largely to the launch of the HomePod. Overall year-on-year value for the three categories combined grew by 16%."
According to Futuresource, smart speaker volume grew globally by 125% year-on-year to ship 7.5 million units, so comprising nearly 35% of all wireless speaker demand. North America was responsible for 62% of wireless speaker shipments, however, it has lost share to China, which now accounts for 20% of all global smart speaker sales, a jump from 10% in Q4 2017.
In Q1 2018, the average price for smart speakers in China was $36, much lower than prices in USA ($111) or Western Europe (€110/$135). China, which is typically not an audio hardware buying country, has witnessed a rapid ramp-up in sales of smart speakers from local players including Xiaomi, Alibaba and to a lesser extent, Baidu, amongst others. Elsewhere in the world, smart speakers have generated a lot of buzz in Australia and France.
In terms of brand leadership, it is looking to be a neck-and-neck race. Globally, Amazon is top of the leader-board. However, in Western Europe, Google surpassed Amazon in terms of units for the first time, albeit by a small margin. Both brands together accounted for 66% share. Google grew by more than 500% year-on-year, owing to its growing presence geographically and strong retailer support.
During the quarter, Apple entered the smart speaker segment and according to this Tracker Report, has captured an impressive 11% share globally in terms of units shipped. Feedback from industry sources suggests that the sell-in of the Home Pod was ambitious, outstripping sell-out performance, which was lower than expected. High prices and a closed ecosystem have been cited as the main roadblocks for rapid uptake. However, Apple has since announced that Airplay 2 will now include a multi-room feature and will be compatible with other brands. "This is a step forward, making the ecosystem more appealing," added D'Souza.
The report also highlights barriers to entry for third-party audio brands and how they have struggled to gain significant share in the smart speaker segment. This is because they are competing in a tough space where brand Titans like Amazon and Google are able to ship products priced at under $50. "Our forecast that voice assistants features would soon start to impact other audio devices has been realised, by recent announcements from Polk and Sonos that they will be rolling out soundbars with voice assistants," says Jack Wetherall, Principal Analyst, Home Electronics at Futuresource Consulting. "This is a way of extending voice assistants into higher value devices, and into the living room."
D'Souza adds that, "The tech Titans of China, Alibaba and Xiaomi, which ship smart speakers exclusively to their domestic market, are also interesting protagonists, they have a global unit share of 17%. Both brands are aggressive in distribution and pricing and have gained ranks in the global brand landscape for smart speakers."
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