Nearly half of Americans plan to purchase a smart speaker this year

Study says nearly half of America plans to buy a smart speaker this year

Google Home Mini vs Amazon Echo Dot echo close
Bill Roberson/Digital Trends

An interesting report quietly dropped last month from the Consumer Technology Association (CTA) that revealed that 44 percent of U.S. adults plan to purchase a smart speaker in the next year.

The report also demonstrated that smart devices are becoming increasingly popular, with 70 percent of current owners of smart home products using their device every day, and 89 percent report being satisfied with their product.

Amazon Echo 2017 review both colors

Bill Roberson/Digital Trends

With this new information in mind, Digital Trends looked back on our coverage of the smart speaker market to find more questions worth answering. Here’s what we found out.

Is the market for Smart Speakers diversifying faster than consumers can keep up?

Interest in these devices now reaches to about 44 percent of 325 million Americans. Even if we discount kids and teens, that’s well over 100 million Americans who are thinking about buying a smart speaker this year. That’s a staggering market by anyone’s standards; no wonder manufacturers are plunging into the smart speaker market.

But there are now a staggering array of devices for consumers to study and select from. Most consumers by now are familiar with Amazon Alexa and Google Assistant, but the number of devices that can employ these digital assistants are growing at a breakneck pace. Off the top of our heads, consumers can choose from:

And we’re sure we missed some. The smart home marketplace commonly faces challenges common to any emerging technology, including poor consumer knowledge or lack of familiarity. One has to question whether consumers, especially of older generations who look to physical retail stores to advise them on technology, can keep up with the pace of innovation in the smart speaker market.

Joe Branca, a senior analyst at Strategy Analytics, recently commented, “Manufacturers are clearly very much still in experimentation mode with regards to finding out which combination of feature set, size and price will trigger mass market adoption of smart speakers. Of course, there is unlikely to ever be a one-size-fits-all solution given the wide variation in consumer budget, audio quality expectation, and virtual assistant ecosystem preference. Rather, consumers will choose to put smart speakers into specific rooms in their homes based on the combination of features being right for its use in that space.”

Does the cost of smart speaker technology matter to consumers?

Interestingly, the Consumer Technology Association also found in its survey that cost is the top purchase barrier among non-smart home technology owners, with 60 percent of respondents saying that cost is a factor.

Google Home Mini vs Amazon Echo Dot audio output
Dan Baker/Digital Trends
Dan Baker/Digital Trends

It’s a wide range, currently dominated by manufacturers who are willing to drop prices; this recent holiday season saw smart speaker makers come down below the $30 threshold. Price will continue to make a difference, especially as a certain fruit-themed technology company enters the fray with a device that costs nearly $350.

Who dominates the smart speaker market?

The Google Home Mini may have stolen our hearts last year but there’s no doubt that Amazon is the heavyweight champion when it comes to smart speakers. A Q4 report released by Strategy Analytics demonstrated that fact that Amazon is winning the smart speaker war. The company projected that Amazon Alexa will be on 68 percent of all smart speakers by the end of 2017. This includes Amazon’s popular and competitively priced Echos, a hugely popular gift this holiday season, as well as products built by third parties running Amazon’s digital assistant Alexa. Like we said in our 2017 prediction wrap-up: “Blame Amazon.”

Where in the world is the Apple Homepod?

Finally, there’s no way to address the 2018 smart speaker market without mentioning the big pink elephant in the room — or rather, not in the room — the Apple Homepod.

homepod apple legacy audio innovation is dead event 1
Jeremy Kaplan/Digital Trends
Jeremy Kaplan/Digital Trends

On Friday, November 17, Apple announced that it was pushing the release date of the $349 speaker, initially set for December, to 2018. A statement put out by the company noted that Apple needs a little more time to perfect the Siri-enabled smart speaker, which will compete with Amazon Alexa and Google Assistant when it hits the market. The company certainly has resources, with dozens of HomeKit-friendly products on its website.

It remains to be seen whether the tech giant can go head to head with Amazon, given that Amazon not only has a massive head start but is also dominating the hardware market with its popular, reasonably priced Echo Dot.

What will smart speaker manufacturers do with your data?

Extending the argument that Americans are adopting smart speakers at a record pace, one of the questions that emerges is: what are companies like Amazon and Google doing with all that data?

The question of Customer Relationship Management (CRM) and how data collected by smart speakers might impact those relationships is a huge question. Another question is whether tech giants like Google and Amazon will share that data.

“At the moment, it is early stages – a bit of a wild west,” says Kees Jacob of technology consulting firm Capgemini. “Conversations are orchestrated by Amazon and Google. If that is going to remain the case, the primary data is collected by these firms as they deliver the device and intelligence.”

smart home devices Sonos Play 1 Compact Wireless Speaker

However, it’s a real game-changer in terms of how companies interact with consumers. Access to Alexa or Google Home data would provide actionable intelligence into the behavioral pattern of people’s lives. Companies could know to the second how people make decisions about how they spend their time, from leisure activities to what to have for dinner. Jacobs expressed concern that dominance by companies like Google or Amazon could hinder consumer adoption of the smart speaker platform.

“Ultimately, there needs to be clarity and more openness in sharing voice data and insight,” he says. “It relates to the decoupling of devices, the intelligence behind them and the consumer engagement and business intelligence behind that. Right now, that is in a few hands. For consumers and the industry, we need to go to a level playing field.”

These are big questions, unlikely to be answered by Alexa anytime soon, but we’ll keep covering these developments and keep you posted.