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Smart speaker market continues to grow - report

24 Mar 2020

The smart speaker industry continues to drive the growth in the home audio market, although it is not yet clear what impact the COVID-19 pandemic will have on the industry.

According to Futuresource Consulting, smart speakers have seen a 53% growth since Q4 2018. 

Research from Canalys released last month also backs up the trend in growth, finding that the top five vendors in the global smart speaker market all saw record shipments in the last quarter of 2019.

Amazon, Google, Baidu, Alibaba and Xiaomi all broke their all-time best shipment records during that quarter, says Canalys.

“Markets [in which] smart speakers are booming saw the most significant year-on-year growth,” says Futuresource Consulting market analyst Guy Hammett.

“While the US continues to be the largest smart speaker market in the world, Eastern Europe saw the strongest year-on-year growth of 705% thanks to the introduction of Yandex’s Station Mini. 

“More impressive, however, is Asia Pacific’s 116% growth, which saw it grow by over 10 percentage points to reach 39% of Q4 shipments,” says Hammett.

Due to the continued interest in both home automation and immersive theatre, smart soundbars have also experienced a rise in popularity, according to Futuresource research.

“Soundbars with smart-tech integration have experienced a 60% increase year-on-year,” says Hammett.

“They still, however, take up a relatively small segment of the overall smart speaker market when compared to wireless speakers. 

“As the standout audio product, wireless speakers achieved the largest overall revenue growth this quarter.”

The research from Canalys released last month found Amazon leading the market for smart speakers, shipping 15.6 million units. This was followed by Google, which shipped 12.5 million units, putting it back into second place after flagging in the previous two quarters.

The research also found that, for the full-year 2019, vendors shipped a total of 125 million smart speakers worldwide, 60% more than in 2018. 

Shipments in China more than doubled, from 21.9 million in 2018 to 52.0 million in 2019 and contributed 64% of all shipment growth in the year, thanks to Baidu, Alibaba and Xiaomi. 

Baidu stood out with 384% growth as its shipments grew from 3.6 million in 2018 to 17.3 million in 2019.

“There’s a need to hasten the product cycle to bring more interesting devices to consumers faster to stay competitive, as well as to introduce new go-to-market strategies to increase the penetration of smart speakers in more households,” says Canalys Senior Analyst Jason Low.

Futuresource Consulting’s quarterly report also demonstrates the growth of smart display units, particularly those now adopting much larger screens. 

Three million smart display units were shipped in 2018 compared to a staggering 14.5 million units in 2019, according to the research. 

Google and Amazon both experienced a strong quarter, yet Baidu currently remains the strongest contender within the smart display market.

“The demand for larger screen sizes, improved Wi-fi technology and enhanced audio quality commands a premium cost, despite the average price of home audio devices declining once again in Q4,” explains Hammett.

“Vendors will need to find ways of adopting aggressive pricing strategies and increasing giveaways to gain market share.”