Smart speakers and smart displays entered 2020 as one of the strongest-performing new consumer electronics categories since tablets and smartphones. Their upward trajectory has continued, now reaching over half of US internet households according to Parks Associates research. Smart speakers and smart displays are on their way to reaching levels of adoption and ubiquity not seen since perhaps the DVD player. To that end, the products are now in their third and fourth generations, and they have seen technical maturation accompanied by continual aesthetic refinements to form factors, colors, and materials.
Parks Associates defines smart speakers as wired or wireless speakers with an embedded voice assistant. Examples include the Amazon Echo, Google Nest Audio, Apple HomePod, and Sonos One. Parks Associates defines smart displays as smart speakers with screens, allowing these devices to display data visually and/or to show videos.
The smart speaker / smart display category is now a lifestyle product staple within the modern connected home, and this product evolution is a clear sign of the shift. Amazon, Google, and now Apple are battling for ecosystem dominance within the household, and smart speakers and smart displays are increasingly seen as a platform battleground with manifold potential benefits in terms of control of the smart home, media consumption, ecosystem product propagation, service subscriptions, user data, and other areas.
Third parties such as Sonos, Harman (Harman Kardon, JBL), Sony, Lenovo, and others continue to have a steady presence in the market, but the smart speaker / smart display landscape is solidly dominated by first-party products from the big three voice assistant ecosystem competitors as Amazon, Google, and Apple. As these three heavyweights redouble their efforts in this market, third parties must deliver substantive differentiation in features, functionality, form factor, and aesthetics in order to maximize their share of the limited oxygen left behind by the three ecosystem companies.
Market Drivers for Smart Speakers and Smart Displays
High Visibility Driven by the Strength of Ecosystem Players
Smart speakers and displays are highly visible, with the well-funded marketing campaigns and presence of Amazon, Google, and Apple driving awareness across online, TV, radio, and brick-and-mortar retailers such as Best Buy, Target, and Walmart. These products are frequently advertised on commonly used online platforms, such as YouTube, as well as through cross-promotions with companies in entertainment, utility, healthcare, security, hospitality, and other industries.
Low Cost of Entry and Ease of Experimentation, via Sustained Competition and Promotion
Smart speakers and displays are available at several price points, with an entry point of less than $50 for the Amazon Echo Dot and Google Nest Mini, and an entry point of less than $90 for the Echo Show 5. Sales and promotions further lowered the barrier to entry, with buy-in points as low as $20 for top-brand smart speakers or $60 for top-brand smart displays during Black Friday and Cyber Monday. Major promotions included free smart speaker giveaways, allowing consumers to experiment with smart speaker ecosystems without needing to buy in at all.
Music Service Integration
The number one self-reported use for smart speakers is streaming music and podcasts, with approximately three-fourths of smart speaker owners reporting doing so. Almost half of smart display owners report using their smart display to listen to music, meaningfully lower than the percentage for smart speaker owners – however music remains a top smart display use case.
Smart Home Device Integration
A high percentage of consumers are using smart speakers and displays as the command and control centers for their smart home and entertainment devices. Most smart speaker and display owners own one or more smart home device 60% of smart speaker owners and/or smart display owners own at least one smart home device, versus 34% of US broadband households overall.
This is an excerpt from Parks Associates research library from the study: Smart Speaker and Smart Display Market Assessment. Market Assessments provide a comprehensive and deep analysis of a single smart product market. Parks Associates analysts identify key market drivers and barriers and assess market growth via topline market forecasts. This research includes consumer data for each product, including trending data across years and deep dive questions on product usage, pain points, and preferences.
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