Who Is Going to Dominate the Smart Speaker Market?

Who Is Going to Dominate the Smart Speaker Market?
This article is a 4 min read.

Alexa: “I Only Know My Competitors by Hearsay”

Me: “Alexa, how do you like Siri?”
Alexa: “I only know my competitors by hearsay.”*

This answer summarizes the current market situation of smart speakers. Amazon and Google have a combined market share of 90%. But where is Apple? Apple postponed the release of their smart speaker – the Apple HomePod – until later in 2018. How important are smart speakers at all? And what does Amazon as a pioneer in smart speakers mean for Apple?

Echo Dot: #1 Christmas Best Seller

First, let’s talk about last year’s Christmas season. During December, the Echo Dot was number one best selling product across all categories on Amazon, which is impressive. This show that Amazon sold millions of Echo devices over the holiday season. Also from my own experience, I can only confirm how popular the Echo and Google Home were over the Christmas season. I worked as a sales rep for the Danish speaker company Libratone. But not Libratone, nor Sonos, Bose, or JBL were the most requested speaker brands. It was the Amazon Echo and the Google Home. Think about it: even though the majority – probably 98% or upwards – ordered the Amazon Echo or the Google Home online, both products were still the most desired products in the local stores.

Smart Speakers Simplify the Simplest

We all have to admit that this demand does not come without a reason. Smart speakers like the Amazon Echo do significantly simplify one’s life. I use an Amazon Echo myself daily. If you don’t have a smart speaker at home you might ask yourself what the hell all these people need those devices for. I will explain it to you in a few short sentences:

First, it will surprise non-users that the Google Home and the Echo Dot are worth $50 simply because they can do the simplest tasks faster and easier. So let me give you a few examples:

1. You want to choose the correct jacket for the day so you’d like to know how cold it is outside and what the weather is going to be the day. Instead of watching the weather forecast or unlocking the phone to look up the weather in a weather app you can simply say: “Alexa, what’s the weather today?” Instantaneously you have the answer. Great.

2. You are cooking and you want to set a timer. No need to touch your phone or a dirty egg timer with your wet hands. Simply say: “Alexa, timer 5 minutes.” As simple as that.

3. You want to listen to your favorite radio station or your favorite music genre. Instead of turning on the radio or using an app for that you can simply say: “Alexa, play jazz music.” Wow.

4. And one of my favorite features: Alexa as an alarm clock. Instead of turning on your alarm on your phone or – even more complicated – using an alarm clock, you can simply say: “Alexa, wake me up at 7 AM.” This works with your lights turned off! And Alexa will wake you up even when you turn off your Wifi at night by using a time switch.

These are my personal favorite features and I honestly say that Alexa is worth $50 only for these four tasks. These are also the tasks most smart speaker owners in the U.S. use them for as the following graph shows.

HomePod – A Rocket Lift-Off?

Now back to Apple. What can we expect to happen when the HomePod is finally released? When one looks at the official homepage of the HomePod one can see that the focus of Apple is definitely on music. However, Google released a smart speaker focussed on good sound just recently. So does Apple have what it takes to regain a large take on the market share as they did with the Apple Watch?

To overtake Google let alone Amazon, Apple has to deliver a product which is at least ten times better than all current products. At price points below $50 – during the Christmas season as low as $29 – the Echo Dot and the Google Home Mini are a no-brainer to try out smart assistants at home.

Listening to music with a superior audio quality is unlikely to be the reason many people buy a smart speaker in the first place. If Apple releases a smart speaker with high or superior sound quality, they will take a huge market share of Sonos or Bose SoundTouch products. At a price point of $349 it is unlikely that Apple will overtake Amazon or Google in the near future. Especially in regard to the skill ecosystem behind Amazon Alexa and even Google Home. As the statistics show: the most used features are simple tasks which both – Alexa and Google – are very good in, and asking questions – where Google is the king.

Unless…Apple builds a smart speaker which is ten times better than every existing product. If Apple does – they might replay their success stories of the iPad and the iWatch and take their lion share.

What is your opinion; are you using a smart speaker and will you buy a HomePod if it gets released? Leave a comment below!

*Note that Alexa’s answer has been translated as I use Alexa in German.

Photo by Rahul Chakraborty on Unsplash

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