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The Smart Speaker is a wireless speaker activated by Bluetooth, Wi-Fi or other wireless protocols and powered by a virtual assistant, which is driven by artificial intelligence. It is the latest technological innovation that dominates the consumer technology market and is activated in voice commands to perform various tasks, such as listening to music, ordering food and buying online.
It also shows other activities, such as obtaining weather information, breaking news, listing daily activities and integrating with smart devices. These multiple functions provide an advantage for smart speakers as compared to other alternative technology products and services.
The growing demand for smart home devices is the crucial factor driving the growth of Global Smart Speaker market. Other factors influencing the market growth are the increased willingness of the consumer to invest in advanced technologies and the increased usage of smart devices especially among the younger generation.
In addition, the development of partnerships between smart home manufacturers and smart speaker creators enables seamless integration with the smart speaker. This turns out to be a critical factor in the adoption of smart speakers.
The global smart speaker installed base is on the rise, paving the way for the ambient computing paradigm shift. From the speed of response, to the skills and real-world tasks, smart assistants can help complete, the job of building great hardware and smart assistant features falls to platform vendors with the resources and business models to support such endeavours.
However, the smart assistant ecosystem needs to be supported by third-party developers, hardware vendors and service providers. It is crucial to understand and invest in the market in accordance with user shifting habits amid the ongoing pandemic.
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With demand for stay-home entertainment expected to increase, global platform vendors have been releasing new smart speakers and displays, ensuring value and availability.
The global smart speaker market is only expected to emerge stronger in the forecast period with developed markets expected to recover and contribute to the majority of share in the market.
The major reason why the sales of smart speakers skyrocketed on a global scale during 2019 and especially during the fourth quarter is strong promotional activity combined with the brands’ introductions of new and innovative smart speaker products.
The global market has experienced the highest growth ever recorded in the history of smart speaker sales, paving the way for further growth in the said market in the forecast period.
The factors such as increasing disposable income, rising number of smart homes, growing urban population, increasing penetration of IoT devices, rising voice commerce, millennials attraction towards smart speakers and establishment of 5G connections are expected to drive the market.
It is not certain whether this catastrophe will leave a notable impact on the Chinese vendors. On the other hand, nothing is stopping Google and Amazon from continuing their sales trends and bringing forth new products to the market.
Smart speakers with a display aka smart displays showed a huge improvement over the last year as more customers preferred them over regular smart speakers. However, the growth of the industry will be challenged by the localization of language privacy and security risks and high prices.
A few notable trends include increasing usage of smart speakers at home, advancement in natural language processing, growing inclination towards technological advancement and rising demand for multifunctional devices.
Hardware is expected to hold the largest share of the smart speaker market throughout the forecast period. Hardware constitutes a major portion of the smart speaker. Currently, smart speakers process a small volume of data, which requires a hardware platform with computing capabilities to support basic functions, such as streaming music, surfing for information, making phone calls, and controlling smart devices.
However, with the use of smart speakers, the privacy of user data becomes a major problem for consumer demand. The smart speaker offers personalized service to its users through the collection and analysis of user data.
The potential for manufacturers to exploit private user data and the threat of illegal cyberattacks to invade privacy limit demand for these smart speakers. Also, the complexity of training virtual assistants speaking multiple languages around the world limits the global reach of these smart devices.
Baidu’s current smart devices and new additions all use the company’s DuerOS assistant. DuerOS can support a wide range of hardware devices, such as mobile phones, televisions, speakers, household appliances, automobiles, and robots.
The DuerOS smart speaker solution is a customized voice solution for audio output devices with or without a screen. The increasing penetration of smart devices in APAC countries, along with the growing market share of Chinese players such as Baidu, Alibaba, and Xiaomi, who have launched smart speakers with local language support, is expected to fuel the demand for smart speakers in the region.
The Global Bluetooth Speaker Market is mainly driven by its increase in demand in electronic segments such as home theatres, mobile phones, music systems, computers, laptops and many others.
The market is also driven by the fact that increasing in demand for multi-room streaming. Companies are investing in R&D to keep an eye on improvising the battery life of the connecting devices and to improvise on the efficiency from previous versions of the devices.
Global Bluetooth Market has wide market opportunity in tapping the economies that are emerging in countries like Africa. Also, the new advents on how to improvise the efficiency of the device and proper connectivity could bring in demand for the Global Bluetooth market. Improver disconnectivity amongst the devices and major dropping of the batteries in devices like mobiles and laptops has restrained the Global Bluetooth market.
Amid the COVID-19 crisis, the global market for Smart Speaker estimated at US $ xx Billion in the year 2020, is projected to reach a revised size of US $xx Billion by 2027, growing at a CAGR of xx% over the analysis period 2020-2025. Alexa is projected to record the highest CAGR and capture the most share in the market in the forecast period. The business implications of the pandemic and its induced economic crisis has also witnessed growth in the Google segment for the upcoming period.
In the global Siri segment, USA, Canada, Japan, China and Europe will drive the market growth estimated for this segment. These regional markets accounted for the majority of combined market size in the year 2020 and is expected to remain so by the close of the analysis period. China is estimated to remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific.
The fastest-growing regional market is the United States owing to an increasing number of devices per household coupled with the rising adoption of smart speakers. The U.S. and China are highly established premium markets that contribute to significant shares in the global market. Growing installed base users for smart devices in China propelled the demand for smart speakers.
The smart home segment to be the largest contributor to the smart speaker market during the forecast period
Smart home is the major application of smart speakers owing to their features and usability. Smart speakers can control smart devices with the user’s voice, thus making day-to-day tasks easy. With a voice command, the user can control all smart devices by connecting the device to the Internet.
Smart speakers understand the natural way of speaking and are less complicated to operate than other smart devices. The changing lifestyles, increasing per capita income, and the inclination of smart home owners toward luxurious entertainment systems have spurred the demand for smart speakers in smart homes.
The increasing penetration of smart devices in APAC countries, along with the rising market share of Chinese players such as Baidu, Alibaba, and Xiaomi, who have launched smart speakers with local language support, is expected to fuel the demand for smart speakers in the region.
The software segment to grow during the forecast period
In the coming years, smart speakers will expand their operations. To perform these operations, more data would be sensed or processed by smart speakers. To process this large volume of data, advanced software would be needed. Hence, there would be a requirement for advanced software that can work on a complex set of databases.
With the nation-wide lockdown due to the pandemic, there has been seen an increasing trend of digital media adoption and a major shift has been observed in terms of digitization as means of entertainment. This has proven to be an opportunity for increasing adoption of the smart devices by an average consumer with regular shifting habits and preferences.
Global smart speaker shipments reached 147 million units in 2019 and this figure only grew further in 2020 to more than 170 million. The COVID-19 pandemic has inevitably had an impact on the market both from the supply side as a result of factory closures in China during Q1 and on the consumer demand front due to the ongoing economic fallout following the widespread lockdown measures.
However, the market has been better insulated against the crisis than many other major device categories due to the high proportion of sales that go through online channels but also as a result of consumers actively seeking out smart speaker and smart display products in order to facilitate communication with family and friends during the period of lockdown.
Consumer appetite for smart speakers remained undimmed during the all-important lockdown period as newly launched devices with improved feature sets and audio performance helped drive record quarterly shipments.
The Smart Speaker market landscape is based on survival of the fittest owing to the presence of some of the prominent players in the industry who are dominating the market, the competition is relatively high and in this segment. The industry is constantly innovating and bringing in new applications to the market in order to stand its ground in the rapidly changing market scenario.
In terms of the market share, Jeff Bezos-led Amazon emerged as the market leader with a 23.5% share, up from 21.5% in the same period a year ago. This was followed by Google, the company that retained its second-position by capturing 19.3% market. Amazon, Google, and Apple collectively captured 47% market share in Q1 2020 compared to 38% for Baidu, Alibaba, and Xiaomi.
Rising consumer preference for Alexa, low cost and high efficiency along with its multi-functional features helped Alexa to remain at top position amongst all the smart speakers. In the smart speaker market, Alexa accounted for the highest share in 2020.
Amazon Echo Dot Tops Smart Speaker Sales in India in 2020, Google Home Mini, Mi Smart Speaker Follow. Amazon captured 79 percent of the market share by volume in 2020, whereas its market share by value stood at 80 percent.
Consumers across the world were once again enticed by scarcely believable deals from leading brands such as Google, Amazon, Baidu, and Alibaba, while Google, in particular, stepped up its giveaway promotional activity in partnership with brands such as YouTube and Spotify
The Q4 of 2019 gave the global market a large push with a total of 55.7 million sales. The holiday season led vendors to slash the prices on their entry-level speakers and encourage customers to make purchases. Amazon sold a total of 15.8 million units during the holiday season, leaving Google at the second place with 13.9 million sales. The third place was a Chinese vendor called Baidu with 5.9 million sold units.
Baidu’s current smart devices and new additions all use the company’s DuerOS assistant. DuerOS can support a wide range of hardware devices, such as mobile phones, televisions, speakers, household appliances, automobiles, and robots. The DuerOS smart speaker solution is a customized voice solution for audio output devices with or without a screen.
Amazon and Google are striving to spark interest of the average consumer by breaking the speaker mould, each taking different design routes aimed at improving sound quality improvements, not only with physical design changes, but also introducing additional elements of computational audio. In the future, a customer’s listening experience will be increasingly adaptable and driven by Artificial Intelligence.
