Research Firm Canalys is predicting 56.3 million smart speaker sales in 2018 worldwide. That will be up from an estimated 33 million units shipped in 2017. U.S. smart speaker sales in 2018 are expected to account for 68.2% of the total while purchases in China will be the next largest market at 7.8%.
The Fastest Growing Consumer Technology
Many analysts are recognizing that voice assistant technologies are uniquely popular as 2017 sales numbers continue to outpace even optimistic predictions. Smart speakers are the most prominent vessels for voice assistants today and Canalys Research Analyst Lucio Chen says 2018 innovations will move beyond hardware to services innovation, particularly around monetization.
Smart speaker uptake has grown faster than any other consumer technology we’ve recently encountered, such as AR, VR or even wearables. While 2017 has been a banner year for smart speakers in terms of hardware sales, especially for Google and Amazon, smart speakers in 2018 will move beyond hardware, with strategic attempts to monetize the growing installed base in the US and beyond. The possibilities to do this are endless, be it discreet advertising, content subscription bundles, premium services or enterprise solutions. The technology is still in transition, and increased investments from multiple players of the ecosystem will fuel growth.
Amazon and Google Lead the Pack in the U.S., but Won’t Win in China
Canalys data shows Amazon maintaining a 2:1 lead over Google in device sales in 2017 with only a nominal amount going to other manufacturers. This represents a smaller lead by to forecasts from other analysts such as Strategy Analytics that predicted Amazon would sell 65% of all smart speakers in 2017 with Google Home accounting for only 18%. The key difference here is that Canalys expects a smaller share for other manufacturers with Google Home taking at much as 30% of the 2017 market share.
This is explained in part by Strategy Analytics’ earlier forecast that predicted Apple would take 4-5% market share. That prediction was made before Apple delayed its HomePod launch until 2018. Still, more recent data suggests that other manufacturers may have done about as well as predicted, but both Amazon and Google over performed against expectations. The exception is China. Neither company has an offering there. The Canalys announcement elaborates:
“Despite tasting success in the US and Western Europe, China will continue to elude the two smart speaker giants, Amazon and Google. The restrictions on their services will catalyze a healthy local market where vendors, such as Alibaba, JD.com and Xiaomi, have already launched smart speakers to test the waters.”
You can add Baidu to that list with a very distinctive looking entry into the space. Samsung is also expected to launch a smart speaker in China in 2018 supported by its Bixby voice assistant which already recognizes Mandarin. Also, I learned today at CES that Naver’s Clova Friends smart speakers will support Mandarin in 2018. So, there will be outside competition for the Chinese market even if Amazon and Google bypass the country entirely.