A survey from early June by Morning Consult suggests that 18.8 million Amazon Echo devices have been sold. Maybe more surprising is the finding that 15.7 million Google Home devices have been purchased. There is an overlap of 4.7 million people that own both devices according to the survey so the total users of voice assistant devices knownE more commonly as smart speakers is 29.8 million.
Could This Mean 39 Million Smart Speakers Sold?
Previous Voicebot analysis showed that households had 1.18 devices each in Q4 of 2016. If we assume that 4.7 million people with both Amazon Echo and Google Home have two devices and the remainder have 1.18 devices then the real total of devices sold climbs to 39 million. This would be three times higher than most market estimates.
What About the Google Home Numbers?
While most estimates have placed Amazon Echo unit sales in the 10-13 million range, the 18.8 million figure is plausible. First, Morgan Stanley estimated that Amazon had sold 11 million Echo devices before December 1, 2016 with about 700,000 in the UK and Germany. That means 10.3 million in the U.S. which is the focus of the Morning Consult survey. We all remember that Amazon Echo sold out before Christmas so demand was high.
And, Amazon said in late December that,“Sales of Amazon Echo family of devices up more than 9x over last holiday season.” CIRP had estimated about one million devices were sold in Q4 2015 which would mean as many as 9 million sold in Q4 2016. CIRP reported in that Echo sales through Q3 of 2016 were 5 million so you would have 14 million sold through December 2016. Sales of 1 million Echo units per month in 2017 brings us to 18.8 million through early June.
Getting to a Google Home number of 15.7 million is harder to confirm. The only sales estimates for Google in the market to date have been from Evercore which suggested that 500,000 were sold in 2016 after the product first launched. Google Home had only been available for purchase for seven months at the time of the survey. That would mean Google was selling an average of over two million units per month.
If we consider the eMarketer estimate that Amazon will command 71% market share and Google Home will have 24% in 2017 and build off of the 18.8 million Echo devices number, we get a total market of 26.5 million smart speaker devices today. The Google Home share would be 6.35 million or about 40% of the Morning Consult estimate. This tracks relatively well with the Edison Research survey estimate of 5.4 million Google Home ownership in February 2017. Growth of one million units over four months sounds reasonable.
Every survey and forecast has a different methodology and all were built at different times. As a result, it is hard to line up these three recent forecasts. For example, eMarketer focuses on monthly usage across all ages whereas Morning Consult addresses ownership and only adults as of June 2017. Edison uses a 12+ age number in early February 2017. You would expect eMarketer and Edison numbers to be higher than Morning Consult as they are less restrictive in their populations unless there has been a very rapid sales increase over the past 3-4 months. One more wrinkle. eMarketer may be basing its forecast in part on Edison data.
Should We Believe the Numbers
There are definitely reasons to be skeptical. However, we should also look at a couple of data points that suggest Morning Consult indeed has a representative survey sample. First, the survey estimates that the number of iPhone owners is 32% or 79.7 million US adults (i.e. 18 years or over). A comScore study found that 86 million people 13 or over in the US owned an iPhone. When we subtract the 13-17 year olds from the comScore figure we arrive at right around 80 million. So the numbers match very closely and suggest that the Morning Consult survey sample had similar characteristics to the comScore sample. Both claim to be representative.
Another data point comes from Edison Research which found that 7% of the 12+ population owned a smart speaker in early 2017. The Morning Consult results suggest that 12% of the adult population owns at least one device. When we adjust that recognizing that there are multiple adults per household we get 8% of U.S. Households from the Morning Consult data. It is certainly reasonable that about 3 million devices have been added over 4 months.
We Have Been Underestimating Total Sales
When the Morgan Stanley data was published, it was an outlier. The addition of the Edison Research survey, Gartner Forecast and Morning Consult survey all suggest that CIRP and Evercore data underreport total sales for both Amazon Echo and Google Home respectively. This also means that the Voicebot estimate for year end units in use of 23.55 million also is low.
Based on the more recent data points, Voicebot estimates that 16.1 million Amazon Echo and 5.9 million Google Home were sold through the end of May 2017 and in use today. The addition of new form factors such as the Amazon Echo Show, Echo Look and Dash Wand along with new entrants such as Apple, Microsoft and Samsung should accelerate growth in the second half of 2017. Everyone seems to have underestimated consumer interest in voice assistants.