Google is Catching Up to Amazon in Smart Speakers

Posted on August 15, 2018 by Paul Thurrott in Smart Home with 11 Comments

Two new reports point to an inevitable conclusion: Google could overtake Amazon in the smart speaker market as soon as this coming holiday season.

NPD, which tracks consumer usage in the United States, notes an explosive demand for what it calls voice-activated speakers.

“Voice-activated speaker sales are expected to experience 50 percent U.S. dollar growth from 2016-2017 to 2018-2019,” the firm notes. “Demand for voice control in streaming speakers will grow the segment to nearly $2.7 billion by 2019.”

As good, 19 percent of U.S. consumers plan to purchase a smart speaker in the next year, NPD claims.

NPD doesn’t discuss the market leaders, but it does point out that this overall growth is “overtaxing” traditional wireless networks, leading to related growth in wireless mesh networking equipment. (You may recall that both Brad and I have moved to mesh networking at home. I’m using Google Wifi and Brad is using the Amplifi HD Mesh Wi-Fi System.)

Meanwhile, a related report from Strategy Analytics, which examines the global market for smart speakers, shows how quickly Google is catching up to Amazon.

Sales of Google Assistant-powered smart speakers surged by 420 percent in the previous quarter compared to a year ago, while sales of Amazon speakers grew just 64 percent. So Amazon’s lead has collapsed: The firm now controls 41 percent of this market, compared to 76 percent a year earlier. Google is in second place with 28 percent, up from just 16 percent a year ago.

As is the case in the smartphone market, however, the smart speaker market is impacted by two outside factors: Apple and China.

Thanks to its “fiercely loyal fan base,” Apple’s terrible and expensive HomePod smart speaker somehow accounted for almost 6 percent of sales in the quarter, good for fourth place. And China-based Alibaba, which sells only in China, is doing even better with 8 percent market share, good for third place.

“The fast-growing Chinese market is dominated by local powerhouse brands such as Alibaba, JD.com, and Baidu,” Strategy Analytics director David Watkins says. “China has the potential to be a hugely lucrative market for smart speakers and the voice assistant platforms that power them and Google’s recent $500 million strategic partnership with Chinese e-commerce giant JD.com is a sign that it is deadly serious about not missing the opportunity.”

My guess is that Google and Amazon will be at least neck-and-neck in the smart speaker market by the end of the 2018 holiday season.

 

Tagged with , , ,

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (12)

12 responses to “Google is Catching Up to Amazon in Smart Speakers”

  1. Avatar

    dcdevito

    It's only a matter of time, Amazon devices cannot sniff Google's jock in this area - no one can. The Knowledge Graph makes all the difference. It's a black box of general information.

  2. Avatar

    wolters

    I have all three Google Home's (Mini, Home, Max) after being on Echo since the beginning. I made the full move last fall after taking some time to migrate off of Amazon. It wasn't that I didn't like Echo, but I felt I was full of redundant services (music namely) and since we used Google Play Music / YouTube Music primarily, it was just the logical decision. And I've been happy with it, even if it isn't perfect.


    Same goes for Bixby. I love the Note 9 and really want one but I don't want a phone filled with redundant services and apps.

  3. Avatar

    FalseAgent

    Interesting that China is leaning into these things - smart speakers have yet to take off at all here in Southeast Asia.

  4. Avatar

    JacobTheDev

    In my opinion, Google's obviously going to win this in the end. They're already so integrated in to most of our lives, and their assistant is miles ahead of the competition. Email, search, photos, documents, calendar, phones, etc. is all powered by Google for most people. Amazon dominates online shopping, sure, but that's the only advantage I see Amazon having over Google in this space, and Google's been massively expanding their Express shopping service in an effort to compete. Definitely will be interesting to see where this goes in the next few years.

  5. Avatar

    Stooks

    Leo on Tech TV (Your pal on Windows Weekly) just read off some statistic that only 2-3% of smart speaker owners actually use them to buy anything.


    He also said that people get them but then abandon them for the most part, because you have to essentially learn how to talk to them in their own language and often they are slower then just doing things manually. He said this applies to the smart-home world as well.


    I completely agree with him. Our full size echo is a blue tooth speaker for my youngest. Our HomePod is great in the Kitchen for music playing and using AirPlay vs BT is 100x better since we all have iPhones and Apple Music.


    Using the HomePod for anything else....well we tried it, like listening to the new or getting a weather report and it worked just as well as the Echo....that is you have to ask it a specific way and sometimes there is this pause before you get information back. With both those tasks they are faster done on our smartphones or computers.


    These devices wont be able to have a natural language conversation (think Star Trek) for at least 5-10 years and it will require some serious amounts of user data, 1000x more than they have today or serious advancements in AI...or do we now call it "Machine Learning"?


    I think these devices were the 3D TV's of the last 2-3 years. Great present during the holidays when they are on sale and you are buying them for that person you don't know what to get for them. AKA a fad that wont last long....or simply land fill...filler.

    • Avatar

      Tony Barrett

      In reply to Stooks:

      Today's AI is probably the equivalent of a 5 year old. You can hold a simple conversation, but you need to speek slowly and clearly, and often repeat what you said. In 5 years time, it will be like a teenager - tempestuous and argumentative, but it has to start somewhere.

      In reply to your comment though, Amazon sell smart devices because they want people to shop and use Amazon's retail services. Google just want people to use their AI assistant. There's a big difference in the business model.

  6. Avatar

    PeteB

    Google will overtake Amazon, it's not an if but a when. Amazon had a nice head start, but lacks the billions of phones Google has to vertically integrate with. And Amazon has admitted people aren't really using Echo's for shopping as they'd hoped.


    Meanwhile Cortana is just a whimper heard from a locked bathroom somewhere.

  7. Avatar

    Rob_Wade

    What a stupid purchase to make.

  8. Avatar

    Tony Barrett

    Honestly, I really do think that some people will by *anything* with an Apple logo on it. The HomePod is a pretty average device, with limited connectivity and a relatively dumb AI, yet it has the logo that means people buy it, enough for it to take 6% of the smart speaker market. It's a crazy world.

Leave a Reply