Amazon Echo to Grab 70% of Voice-enabled Smart Speaker Market, 130% Engagement Increase

Amazon Echo sales

eMarketer’s latest forecast for voice-enabled smart speakers like Amazon Echo looks extremely encouraging. While Amazon Echo and its family of Alexa-enabled smart speakers are expected to hold 70.6 percent of the market this year, Google will garner a much more modest 23.8 percent, with the rest being shared by Lenovo, LG, Microsoft’s Harman Kardon Invoke and Mattel.

The market research firm also expects Amazon Echo to hold the lead in this segment “for the foreseeable future,” while it could lose some ground as Google Home gains more sales traction in 2017 and beyond.

As a whole, voice-activated devices like Amazon Echo and Google Home will be used by no less than 35.6 million Americans at least once a month, up 128.9 percent over 2016 usage. That’s impressive engagement for a product segment that’s barely two and a half years old.

Says Martín Utreras, vice president of forecasting at eMarketer:

“Consumers are becoming increasingly comfortable with the technology, which is driving engagement. As prices decrease and functionality increases, consumers are finding more reasons to adopt these devices.”

The voice-enabled virtual assistant segment is also growing, with nearly 60.5 million people in the United States engaging with one of the many digital assistants at least once every month in 2017. That’s up 23.1 percent from last year, and equates to 27.5 percent of all smartphone users.

It does seem that people are getting more comfortable asking virtual assistants for help, and eMarketer also notes that heavy usage comes from the 25 to 34 age group.

That’s great news for the voice assistant market, but it’s even better news for companies like Amazon and Google, whose foray into hardware is only a few years old. Mass adoption could take years, the way smartphones did, but as prices come down, more people will be able to afford a smart speaker for their home.

The real opportunity is in developing markets. Once smart speakers are made more widely available in the sub-$100 range, uptake should increase significantly in these countries.

Other drivers of growth in these geographic markets are Internet connectivity and smartphone usage. The penetration of both are still growing in emerging markets, although they’ve slowed down considerably in developed markets in North America, Europe, Australia and some parts of Asia.

With this kind of growth opportunity forecast for 2017, it’s no wonder everyone is jumping on the virtual assistant bandwagon. Of note is the entry of Samsung into the space this year with its Bixby virtual assistant that’s being rolled out to Samsung Galaxy S8 and Galaxy S8 Plus devices. It’s not fully functional yet, according to users, but Samsung will hopefully push harder on timelines so they don’t miss out on the growth opportunity in this segment.

Amazon Echo is clearly the king of the voice-enabled smart speaker market, with Google at a distant second. That could change over the next two to three years as Google keeps pushing more features into Google Home. Hopefully, both with start bringing their prices down so more market opportunities can be opened up.

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Source: eMarketer