Gartner predicts that 75% of US households will have smart speakers like Amazon Echo or Google Home by 2020 according to Inside Radio. Edison Research survey data earlier this year suggested that 7% of U.S. households currently have a smart speaker with an embedded voice assistant. If both Edison and Gartner are correct, that represents 10x growth in just four years or a 81% compound annual growth rate (CAGR).
138 Million Voice Assistant Smart Speakers in 2020
The number of households in the U.S. at the end of 2016 was 118.5 million according to US Census Bureau data as reported by YCHARTS. The five year growth rate has been 1.48% annually. If that trend continues there will be 123.8 million US households at the end of 2020. Inside Radio also reported that Gartner’s model predicts 20% of households will have two devices and 5% will have three or more in 2020. If we assume the greater than two device households average five devices then 94.2 million US households will have 138.2 million smart speaker devices.
It is important to note that the 7.85 million starting base includes the period 2014-2016 and excludes 2016 sales in the UK and Germany by Amazon. The foreign sales needed to be removed as the Gartner and Edison data points only reflect U.S. household ownership.
Comparing Growth to Other Models
The models are highly sensitive to the starting base, current year sales and subsequent year growth rates. The model is also constrained by the Gartner estimate of 75% of households owning at least one device with an assumed average of 1.5 devices per household. That seems like a reasonable upper bound for four years out which means the only other lever is additional devices per household. To make the model work with reasonable growth rates the 15.7 million units sold in the U.S. is a reasonable estimate for 2017. It reflects a doubling of the installed based at the end of 2016 and a 2.7 times increase in sales between 2016 and 2017.
This 2016 estimate is about nine million less than the Voicelabs estimate. Voicelabs does not necessarily constrain its estimate to U.S. only sales. Therefore the models could be compatible if the Voicelabs estimates include about nine million in foreign sales. It may be hard to imagine Europe growing that quickly Amazon only in two countries and Google in one today, but it is reasonable to forecast Europe surpassing four million units and the balance of sales resulting in Asia. With that said, using the Edison and Gartner anchor points likely provides a more conservative model than Voicelabs.
258 Million Audience for Smart Speakers in 2020
The other big number to consider is total audience for voice assistant enabled smart speakers. Smartphones may be a one-for-one ratio of device to user. However, smart speakers like Amazon Echo and Google Home are household devices. Everyone in the home has access to them. Comparing U.S. Census population and household data suggests that about 258 million U.S. consumers will have access to smart speakers at the end of 2020. That sounds like the definition of mass market adoption and mass audience reach.