Time flies by when you’re having fun with voice assistants: the smart speakers market is nearly five years old now. When Amazon unveiled the first version of its Echo speaker in November 2014 – complete with its Alexa assistant – even the technology press wasn’t sure what to make of it. “The whole thing is a tad baffling, but also intriguing in that it’s fairly unique among major tech company product introductions,” was tech site TechCrunch’s initial verdict. “This seems like an odd pitch to make to consumers…”
Odd, perhaps, but also persuasive. In 2018 alone, 86.2 million smart speakers were shipped globally according to research firm Strategy Analytics, while Amazon itself said in January 2019 that it had just reached the milestone of 100 million devices sold with Alexa on board. Now expanded to a family of devices, the Echo has also been joined by Google’s Home speakers, Apple’s HomePod as well as smart speakers from Chinese firms Baidu, Alibaba and Xiaomi to build the burgeoning market.
Smart Speaker Statistics and Predictions
The smart speakers market is growing fast. Research firm Canalys estimates that this device category’s global install-base was 114m units at the end of 2018, but that this will grow by 82.4% to 207.9 million units by the end of 2019. Rival research companies have also made their predictions for the future of smart speakers. IDC expects 144.3 million smart speaker shipments globally in 2019, and for this to rise to 240.1 million a year by 2023, for example. Strategy Analytics, meanwhile, has forecast a tipping point in the US in late 2020 where “there will be more US homes with smart speakers than without”.
It’s always important to remember that smart speakers are not the only devices that voice assistants are being used on: smartphones, tablets, TV set-top boxes, in-car devices through to fridges and even smart toilets are also in play here. Research firm eMarketer recently predicted that 111.8 million people in the US alone will use a voice assistant at least monthly in 2019 – just over a third of the general population. “Today, most people use their voice assistants on smartphones and smart speakers. Smartphones, by a wide margin, are most common,” explained the company.
In terms of the companies selling smart speakers and their respective market shares, Canalys split out its estimates for 2018. It thinks that 78 million speakers were shipped overall, with Amazon accounting for 24.2 million of them (a 31.1% market share) and Google for 23.4 million (30%). Behind them were three Chinese firms: Alibaba (8.9 million shipments for an 11.4% market share), Xiaomi (7.1 million / 9.1%) and Baidu (3.6 million / 4.6%).
Smart Speaker Trends: China is rising
This is one of the most important smart speaker trends to understand in 2019: the growth in China. In fact, when Canalys published its estimates for shipments in the first quarter of this year, it claimed that China had overtaken the US to become the largest smart-speaker market: with its 10.6 million shipments accounting for 51% of the global total that quarter.
China has huge potential scale for smart speakers and their voice assistants. In July 2019, Baidu said that its DuerOS voice assistant, which is used on its speakers as well as on other devices, now had 400 million users. With the global music industry currently very excited about the growth of Chinese music-streaming services from companies like Tencent Music and NetEase, the growth of smart speakers there is just as fascinating to watch.
So where is Apple in all of this with its HomePod? Most estimates put it in sixth place. For example, when Strategy Analytics published its smart-speaker shipments estimates for the second quarter of 2019, it claimed that Apple shipped 1.4m HomePods that quarter, for a 4.7% share of the global market – some distance behind Amazon (6.6 million / 21.9%) and Google (5.6 million / 18.5%) as well as the three Chinese manufacturers.
Smart Speaker Usage: Music still key!
Music is one of the key uses for a smart speaker in 2019. Indeed, several surveys have suggested it’s the most popular use. For example, NPR and Edison Research’s latest Smart Audio Report, which is an excellent source of data for smart speakers in the US, found that playing music topped the list of weekly smart-speaker requests. Some 77% of American smart-speaker owners are doing it, ahead of weather (75%) and asking general questions (74%).
The report also found that 55% of smart speaker owners say they are listening to more audio since getting one and that 69% of them use the speaker daily.
A different study, published by Voicebot and Voicify in March 2019, also found that listening to a music-streaming service was the most popular use case for US smart-speaker owners. In this survey, 69.9% said they were doing this monthly, and 38.2% on a daily basis. Note, radio is part of the smart-speaker ecosystem too: 40.5% were listening to radio on a monthly basis, and 21.2% daily.
New ways to discover music
Even nearly five years in, we’re still scraping the surface of how voice interfaces might change the way we listen to music. Amazon in particular has been working hard to roll out new modes of discovery, from its earliest days of enabling listeners to issue commands like ‘play me happy indie music from the 1990s’. In December 2018, it added the ability for listeners to use ‘Alexa, help me find…’ as a command – for example, ‘Alexa, help me find dinner music’ – as well as a new ‘Alexa, recommend some new music’ command. There is more to explore from that model of using a voice assistant as a recommender, rather than simply an entity that is ordered to play specific music.
Decoding the algorithms
The more complicated – or rather, more vague – commands for voice assistants are where things get interesting for the music industry. The algorithms driving the personalised music recommendations that come back for these queries are mysterious, certainly to labels but quite possibly to many of the developers working on them at the tech companies too. Labels already have teams working hard to uncover these mysteries, in order to understand how to give their music catalogues the best chance of being picked regularly by Alexa, Google Assistant, Siri and other voice assistants. Which brings us neatly on to…
Platform control and competition issues
Control is at the heart of another important future trend for smart speakers. Amazon controls Alexa and Echo speakers; Google controls Google Assistant and Google Home speakers; Apple controls Siri and HomePod speakers. All three companies also run their own music-streaming services: Amazon Music, YouTube Music and Apple Music respectively. The arguments about whether those services’ rivals have fair access to these platforms and their latest features are only just beginning. Witness HomePod featuring in Spotify’s recent anti–competition complaint against Apple (although also recent reports of the companies working together to open up Siri more to Spotify). The industry will be watching closely though: if the smart speakers’ sister streaming services seem to be getting an unfair advantage, regulators will be pressed to step in.
Artist ‘skills’ as the next marketing tool?
In a different sense, the two biggest western voice assistants are open for external companies to innovate. Alexa has its ‘skills’ and Google Assistant its ‘actions’ which are for smart speakers the equivalent to apps for smartphones. Developers can create skills/actions which smart speaker owners can then install (by voice) and use. Labels and artists are already exploring the potential this has for marketing. Check out Paloma’s Bedtime for example: released for artist Paloma Faith, it helps parents get their young children off to sleep with lullabies, stories and sleep sounds. It sits alongside skills developed for Little Mix and Michael Bublé on Alexa. Not that this is restricted to major-label artists: independent musician Emma McGann launched a skill earlier this year too.
This kind of activity illustrates the single most important smart speaker trend in 2019: that the music industry is already actively engaging with these devices and their voice assistants: understanding how they work, how their music features are evolving, and what potential there is for labels and artists to capitalise by doing things, rather than simply sitting back as the passive providers of the music that this technology serves to listeners.
That’s why smart speakers are such an interesting space for music going in to 2020 and beyond: because our industry doesn’t know exactly what they’ll mean yet, there’s an impetus to dive in and experiment, and to make sure that future brings even more opportunities for artists.