There is a hidden gem in yesterday’s earnings release from Amazon. It has nothing to do with the fact that Amazon beat earnings estimates. Nor is it that Alexa was referenced 28 times in the release and Amazon Echo another 13 times. Both are noteworthy. But, what does this quote by Amazon CEO Jeff Bezos in the earnings release tell us?
Customers have purchased tens of millions of Alexa-enabled devices…
Tens of millions can mean only one thing. Amazon Alexa is in more than 20 million devices. The vast majority of these are in the Amazon Echo portfolio. If you consider how few Alexa-enabled devices other than Echo have been sold through Q3, it is easy to conclude that Echo sales to date have totaled 19.5-21.5 million units. Non-echo smart speakers with Alexa are estimated to be in the 1 million unit range through Q3 2017.
It is also worth noting that this wasn’t some off-the-cuff remark. It was in an earnings release. As a public company, all data inserted into earnings releases receive extra scrutiny. Bezos was signaling to the market that they have underestimated how many Echo devices have been bought by consumers.
Amazon Has Sold over 20 Million Echo Devices
Other analyst models out there have consistently under-reported total unit sales for smart speakers. Voicebot did this as well in 2016. Our estimate was higher than other analysts, but we still revised our 2016 estimates upward after reviewing survey and financial analyst data early in 2017. We are also starting to see new models from research firms such as FutureSource and Strategy Analytics that are incorporating both survey and supply chain data to determine total sales. Voicebot’s estimate of 16.1 million Echo devices sold through the end of Q2 2017 seems increasingly justified by the new data points.
Based on the latest sales estimates and seemingly confirmed by Bezos’ station, Voicebot estimates that total shipments of Amazon Echo and Google Home devices were 20.54 million and 4.60 million respectively through Q3 2017. These numbers reflect all sales globally for the smart speakers and not just 2017. We also estimate that the global installed base of smart speakers will exceed 38 million at the end of 2017 and could easily surpass 40 million. The key variable in total sales will be Asian markets and in particular China and Japan.