The Rise of AI-Enabled Smart Speakers
Sun, April 18, 2021

The Rise of AI-Enabled Smart Speakers

Smart speakers have brought voice-interaction into the mainstream, offering a glimpse into the power of anthropomorphizing devices. / Photo by: Kaspars Grinvalds via 123rf

 

The fusion of artificial intelligence and voice recognition is changing the way people live. A 2018 report from research firm Loup Ventures showed that out of the 128 million US households, 28 percent had a smart speaker. It predicted that that number will be at 75 percent by 2025 while 72.5 million smart speakers are expected to be sold in the country this year, generating device revenue of $9.8 billion. By 2025, the revenue might reach $30 billion. 

Smart speakers paved the way for Google Home and Amazon’s Alexa in the market. A 2018 Google report stated that 41% of more than 1,600 voice assistant owners feel that using them is like talking to a friend. “People are engaging with their voice-activated speakers as if they were human. They’re saying ‘please,’ ‘thank you,’ and even ‘sorry.’ People perceive the devices as more than just an electronic toy, they’re more akin to another person or a friend,” Google said.

The success of smart speakers has also made its way into several industries, including healthcare and industrial environments. These devices have brought voice-interaction into the mainstream, offering a glimpse into the power of anthropomorphizing devices. Never mind that they look like normal speakers, consumers expect them to seamlessly interact with them. While there are several privacy concerns with smart speakers, research firm TrendForce projected that the global market value of voice recognition solutions will reach 15.98 billion in 2021. This will drive the usage and revenue of smart speakers even higher. 

The Global Smart Speaker Market

While Amazon remains the overall leader of smart speakers, Chinese search giant Baidu recently surpassed Google as the world’s second-biggest vendor of smart speakers. It’s worth noting that both of the tech giants, Baidu and Google, have different target markets. The former sells its devices exclusively in China, while the latter sells its products worldwide except in China. The rise of Baidu proves the impressive size and dynamics of the Chinese AI ecosystem. 

TechCrunch, an American online publisher focusing on the tech industry, reported that Amazon accounts for 6.6 million shipments in the second quarter of 2019. This is followed by Baidu, which reached 4.5 million units – a 3,700 percent increase – while Google had 4.3 million units shipped. The remaining tech companies included in the top five are Alibaba and Xiaomi, with 4.1 million and 2.8 million units shipped in Q2, respectively.

Overall, the global smart speaker market had 26.1 million units shipped across the world, which is a 55.4 percent increase. The growth in the market is attributed to Baidu’s aggressive marketing and go-to-market campaigns. “Local network operators’ interests on the [smart display] device category soared recently. This bodes well for Baidu as it faces little competition in the smart display category, allowing the company to dominate in the operator channel,” Canalys Research Analyst Cynthia Chen said. 

Of those shipments, China had 12.6 million units sold while the US only had 6.1 million. The latter represents a 2.4 percent decline since the prior quarter. Additionally, the report showed that Amazon and Google focused their attention on non-US markets in Q2. The smart speaker shipments of Amazon outside the US was 50 percent of its total shipments, which increased from 32 percent in Q2 last year. Meanwhile, 55 percent of Google’s shipments were outside the US, up from 42 percent in Q2 2018.

A Tipping Point for Home Automation

The growth of the global smart speaker market has been accredited to the proliferation of smart home devices, greater inclination toward technological products among millennials, and rising disposable income. This is despite several privacy and security concerns that hamper its growth. 

Smart speakers have entered our homes, allowing users to control their homes using voice commands. With these devices, they can turn on the bedroom lights, play their favorite music, or even check if the doors are locked using only their voice. According to The Conversation, a not-for-profit media outlet that uses content sourced from academics and researchers, the combination of home automation and smart speakers is providing a push forward for both technologies. 

Smart speakers have extended their functions to problem-solving, setting reminders, and the streaming of news and music with a single voice command. Users are welcoming information that’s relevant to them through these devices. Reports show that 52 percent of voice assistant owners say they’re open to getting deals or learning about sales from their devices, 48 percent welcome personalized tips, 42% are fine with getting details on upcoming events or activities, and 38 percent use their devices to access customer service or support.

According to Fast Company, a monthly American business magazine that focuses on technology, business, and design, one of the reasons people are increasingly adopting these devices is that they multitask more easily than before.

It’s difficult to say what lengths companies will go to outmaneuver each other, especially with the further rise of smart speakers in the global market. However, this only shows that the overall smart speaker market is still in the midst of a major growth cycle and we are only beginning to see its impacts. 

 

Smart speakers can turn on the bedroom lights, play their favorite music, or even check if the doors are locked using only their voice. / Photo by: Akarat Phasura via 123rf