Think your home is getting smarter, and that voice-activated devices in the home are becoming more widespread? Well, you’re not wrong.
Globally, the market for smart home devices is expected to rise nearly 27% this year, as forecast by the International Data Corporation. That amounts to nearly 550 million smart speakers (Alexa, Google Assistant, and more), smart thermostats, smart lighting, and adapters for digital media.
Not only that, but these products are expected to see a 12% compound growth rate every year through 2022.
Media Fueling the Rise
Media is a large part of the projected rise, with products like smart speakers and smart televisions making up more than 70% of the smart home device market this year. In the first quarter of this year, shipments of smart speakers alone rose a whopping 278% globally year over year.
Smart devices can run entertainment centers, lights, heat, and more.
So far, Amazon’s smart speaker Alexa leads the market, but its market share dropped dramatically in the first quarter of this year, from almost 82% in 2017 to more than 43% of the market in 2018, according to industry publication Marketing Dive.
Google is in the number 2 slot for smart speakers, with its Assistant product garnering over a 12% market share in the first quarter of last year. That rose in the first quarter of 2018, however, so that Amazon and Google combined enjoyed a 70% global market share for smart speakers.
That sounds impressive, but both companies are seeing their market dominance eroded by Chinese companies. In the first quarter of 2017, by contrast, Amazon and Google together claimed 94% of the total market.
The China-based firm Alibaba, an online retailer somewhat analogous to Amazon but offering more services, is the world’s number 3 shipper of smart speakers, with more than 7% of the market. Apple is in the number 4 position globally, and Chinese company Xiaomi brings up the fifth position.
Marketers Not Far Behind Smart Entertainment Devices
Because voice-activated digital assistants are proving very popular with consumers, marketers will be taking a closer look. It is likely that voice-activated assistants, like regular televisions and radio, will be the target of marketers who want to use them to sell directly into the home.
And companies are looking to provide apps for smart speakers, much as they do for smartphones. Mobile Marketer reports that companies from hotelier Marriott to streaming television provider HBO are planning apps for smart speakers.
The market dominance of smart speakers may change in the future as increasing numbers of companies start shipping entertainment devices in which smart speakers are embedded. Amazon, for example, plans a Fire TV Cube with Alexa, which will combine television and digital audio assistant functions. Television maker LG plans to roll out smart entertainment devices that have Google Assistant within them as well.
So how does your smart home grow? Well, it’s growing fairly rapidly, at least in terms of global statistics. And it’s growing fastest of all in the entertainment space, with smart speakers leading the pack.