Voice as a Unifier
Stephen Baker, Vice President, Industry Advisor ;
Consumer Electronics Connected Intelligence
The adoption of voice-enabled speakers has exploded over the past two years. According to our Connected Intelligence Home Automation Report, 20 percent of Internet-enabled homes in the U.S. owned a voice-enabled speaker as of April 2018 – up from 10 percent in April 2017.
With a number of devices at varying price points, form factors, and audio quality levels now available, the voice-enabled speaker market has evolved, positioning it to become a more useful centralized smart home manager. The growth in voice-enabled speakers has allowed consumers to begin to see the value of a more integrated smart home ecosystem. By providing a line of sight to a more robust smart home experience, speakers have become a leading indicator of smart home adoption.
According to NPD, unit sales of voice-enabled speakers were up 78 percent during the 12 months ending June 2018 compared to the same period a year prior, while dollar sales were up 29 percent1. During the same timeframe, sales of home automation devices were up 42 percent based on unit sales and 34 percent based on U.S. dollars sales2 (see here for more on NPD’s future smart home sales expectations). Ownership is highest among the 18- to 34-year-old demographic at 35 percent3, proving once again that younger consumers truly are early adopters and provide the initial sales volumes that lead to mass market penetration levels.
Google Home owners are more likely to be younger and less affluent, while Amazon Echo owners are more likely to be homeowners3. A likely contributor to this difference is the fact that Amazon has been in the market longer, allowing it time to reach a more mainstream audience. By the end of Q3 2017, Amazon sold over 11 million devices before Google reached 2 million1. Additionally, retail availability influences ownership and the installed base construct. In this case, demographics partially reflect the fact that Walmart does not carry Amazon branded products, giving Google a head start selling into Walmart’s customers, whose demographics differ considerably from those of Amazon.
Though Amazon and Google remain the two top-selling voice-enabled speaker brands, selling more than half of U.S. unit sales combined1, Siri is still the most used digital voice assistant. In fact, 38 percent of voice users use Siri on a regular basis, compared to 36 percent for Google Assistant, and 24 percent for Amazon Alexa3.
An interesting trend to watch in the voice-enabled speaker market relates to subsequent smart home purchases made once the speaker becomes part of a home. NPD’s Checkout e-commerce insights prove out that voice-enabled speakers can be a gateway to additional smart home purchases. In fact, after purchasing a voice-enabled speaker, 17 percent of consumers purchased a home automation device. When reversing the purchase order, only eight percent of consumers purchased home automation devices before a voice-enabled speaker4.
But while consumers are keen on shiny new gadgets, they also understand that turning on a lightbulb via a smartphone app isn’t as user-friendly as simply flipping a switch. Therefore, the long-term value of smart home technologies won’t be in individual items or techs, but rather in a full-fledged ecosystem that makes things simpler, more intuitive and convenient. This will make the gadget itself secondary to the cohesive ecosystem.
As an example, apps like Uber, Lyft, and Airbnb, couldn’t be created without smartphones and 4G LTE. In the case of smart home, voice is the current technology that enables the smart devices, and we are at a unique point in time where the platforms and applications are being developed to maximize the potential of the ecosystem.
As the development of the ecosystem is completed, we are likely to see what the true value of smart home technology is to the consumer, as well as the tech industry. But without jumping these final hurdles, the proliferation of smart home could certainly stall out.
1The NPD Group,
Streaming Audio Speaker Total Market Report, July 2017-June 2018 vs. July
2The NPD Group, Retail Tracking Service, Home Automation, July 2017-June 2018 vs. July 2016-June 2017
3The NPD Group, Connected Intelligence Home Automation Report
4The NPD Group, Checkout E-commerce, July 2017-June 2018