Global Smart Speaker market will reach USD 68.89 billion by 2025

The global smart speaker market was valued at USD 11.9 billion in the year 2019 and is estimated to reach USD 15.94 billion by the year 2020.

It is expected to grow at the CAGR of 34% within the time horizon of 2020-2025. Its market value will reach USD 68.89 billion by the end of the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Smart speakers are wireless speakers enabled with Wi-Fi, Bluetooth, and other wireless products. These devices consist of intelligent virtual assistant which is activated by the voice command to perform a variety of tasks such as listening to music, online shopping, weather forecasting, etc.

The major voice recognition systems are Siri assistant voice recognition (Apple), Cortana (Microsoft), Voice (Google), Alexa voice recognition system (Amazon), etc. The global smart speaker market is concerned with the design, development, distribution, and sale of smart speakers.

Based on the type of intelligent virtual assistant and application, the global smart speaker market is categorized into the following types:

Market Overview

The total market size of the global smart speaker market is valued at USD 11.9 billion in the year 2019 and is expected to reach USD 15.94 billion in the year 2020. Its market value is expected to grow at a CAGR of 34% within the forecasted time horizon of 2020-2025.

Its market value is expected to reach USD 68.89 billion by the end of the year 2025. Based on geography, the North American region is leading the global market with a market share of almost 60% of the total global smart speaker market. The market size of this region is valued at USD 7.14 billion in the year 2019.

Based on the type of intelligent virtual assistant, the Amazon Alexa segment is leading the market with a market share of almost 31.7% of the total smart speaker market. The market size of this segment is valued at USD 3.77 billion in the year 2019.

Based on the application, the personal segment is leading the market with a market share of almost 77.7% of the total global smart speaker market. The market size of this segment is valued at USD 9.25 billion in the year 2019.

Increasing adoption of Internet-connected technologies, energy-efficient features of the smart speakers, rising smartphone penetration rate, an increasing number of smart home devices and rising penetration rate of the smart speaker are the factors responsible for the growth and development of the global smart speaker market.

However, privacy & security concerns, connectivity issues of the smart speakers, and difficulty in local language embedding in smart speakers might restrain the growth and development of this market.

The key market players engaged in the operation of its market are Amazon.com, Harman International, Apple Inc, Sonos Inc, Google, Bose Corporation, Sony Corporation, Panasonic Corporation, etc.

Market Risks

Privacy and security concern

The adoption of smart speakers is associated with the threat of the misuse of the private data collected by them. The queries of the users are sent to the server for processing and stored in digital logs for analyzing voice patterns. The smart speaker users are concerned about the privacy issues of their personal data collection. For instance, almost 84% of the consumer in the United States are concerned about their privacy issues.

Over the past four years, the number of data breaches has been increased by almost 50% globally. In the year 2019, more than 3,800 data breaches occurred in which almost 89% of the breaches were due to the outside attacks.

Cyber-attacks are considered to be one of the top five risks to global stability as there is a hacker attack in every 39 seconds. The privacy and security concerns associated with the use of the smart speakers might restrain the growth and development of the global smart speaker market.

Top Market Opportunities

Increasing adoption of Internet-connected technologies

In the year 2019, the number of active IoT devices has reached almost 7.6 billion and is expected to reach 75.44 billion by the year 2025. The market value of the global IoT technologies is expected to grow at a CAGR of 10.53% within the forecasted time horizon of 2020-2025.

The market size of the global IoT technologies is valued at USD 690 billion in the year 2019. According to Cisco, it is expected that almost 500 billion devices will be connected to the internet by the end of the year 2030.

Globally, the number of devices using the Internet of Things connected technologies is in increasing trend and its rising adoption will create a significant opportunity for the growth and development of the global smart speaker market.

Energy-efficient features of smart speaker

Although smart speakers are always connected to Wi-Fi and other internet networks, they are very energy efficient and uses a low level of power. The annual energy use of the google home mini, amazon echo, google home, and invoke is about 12.3 KWh, 15.2 KWH, 17.1 KWh, and 33.4 KWh per year.

The average cost of the energy consumption of the third-generation echo is about USD 0.2 per month. The average energy consumption of the smart speaker costs almost USD 1.5 to USD 4 of electricity for a year. The energy-efficient features of the smart speaker will create a significant opportunity for the growth and development of the global smart speaker market.

Rising smartphone penetration rate

Globally, the penetration of smart electronic devices such as smartphones, tablets is in increasing trend. The global smartphone penetration has reached 41.5% in the year 2019, which is increased from 33.5% in the year 2016.

The smartphone penetration rate is expected to reach 44.9% by the end of the year 2020. Globally, the number of smartphone users has reached 3.2 billion in the year 2019, increased from 2.5 billion in the year 2016. It has been estimated that smartphone users will reach 3.8 billion by the end of the year 2021.

The initial setup of the smart speaker requires a specific smartphone and other devices-based applications. So, the rising global penetration rate of the smartphone will create a significant opportunity for the growth and development of the global smart speaker market.

Market Drivers

The factors driving the growth and development of the global smart speaker market are the growing trend of personalization, rising disposable income, the rapid proliferation of multifunctional devices, increasing focus on enhancing customer experience, rising penetration of smart speakers, and increase in usage of smart home devices. The major driving factors of the global smart speaker market are discussed as follows:

Increasing number of smart homes devices

Globally, the use of smart home appliances is in increasing trend. The penetration of the household in the adoption of the smart home is expected to reach 21.3% by the year 2025, increased from 9.1% in the year 2019.

The market value of the global smart home market is expected to grow at a CAGR of almost 16.1% within the forecasted time horizon of 2020-2025. The market size of the global smart home market is expected to reach USD 92.74 billion in the year 2020 and will reach USD 195.74 billion by the end of the year 2025. Here, the smart is also a part of smart home appliances.

Here, the personal segment is the leading application segment of the global smart speaker market, which accounts for a market share of almost 77.77% of the total global smart speaker market. The rising penetration of smart homes and their associated devices is driving the growth and development of the global smart speaker market.

Rising penetration rate of the smart speakers

Globally, the adoption and penetration of the smart speaker in households are increasing. For instance, almost 35% of the households in the United States are equipped with at least one smart speaker and the penetration rate of the smart speakers is expected to increase to 75% by the end of the year 2025.

The global sale of smart speakers is estimated to be at 92 million in the year 2019, increased from 46.4 million in the year 2017. Within the past two years, the sale of smart speakers is increased by almost 98.27%. The rising adoption and penetration rate of smart speakers is driving the growth and development of the global smart speaker market.

Market Restraints

Connectivity issues associated with the smart speaker

Some of the smart speakers have the issue of the connectivity issues with Bluetooth and wireless networks. For instance, in google home smart speaker, the speaker disconnects the Bluetooth devices on its own with its own.

This Bluetooth connectivity problem of the google home smart speaker disconnect frequently and negatively influence the personal experience of the consumers. The google home also has the problem of playing music, turning lights, etc showing something went wrong error.

Along with this, Alexa disconnects from the Wi-Fi connectivity. The connectivity issues associated with the smart speaker might restrain the growth and development of the global smart speaker market.

Industry Challenges

Localization of languages

There are almost 7,097 living languages in the world. It is quite difficult to integrate intelligent voice assistants with the relevant local language, accent, information, and others.

The major issues associated with the internalization of smart speakers are local language understanding & translation, speech recognition for multiple languages, integration of the local information and culture to the system, and spoken language generation.

It is quite challenging for the market players engaged in the global smart speaker market to integrate the multiple local languages with the smart speakers.

Technology Trends

The adoption of new and advanced technologies is creating a favorable environment for the growth and development of the global smart speaker market. Some of the key technological trends that occurred in this market are discussed as follows:

Automated speech recognition technology: This technology is used to enable the human to speak with the computer interface through their voices in complex variations which resembles normal human conversation. The most advanced form of automated speech recognition technology is natural language processing. It assists the smart speakers to communicate with human beings.

Microphone technology: These technological devices are used to convert the sound waves captured from audio into an electrical signal. The electronic signal is amplified to a digital signal, which can be processed by the digital audio devices, computer, and other devices.

Smart voice searches: It is a type of dialog system that allows the users to search the content on the internet, website, and any applications through their voice command. The major voice search assistant is Siri, Google, Alexa, and Cortana.

Pricing Trends

The price of the products of this market depends upon the type of product, application, brand name, functionality, and technology embedded in the product. For instance, the price of the Echo input portable smart speaker is about USD 54.68 per unit while the price of the Ni compact Bluetooth speaker 2 within Built mic is about USD 10.92 per unit.

The price of the LED RGB color bulb light B22 base Bluetooth control smart music audio speaker lamps is about USD 8.19 per unit.

The price of the Echo studio smart speaker with high fidelity audio Dolby Atmos and Alexa is about USD 314.46 per unit while the price of the google home is about USD 12.57 per unit.

Regulatory Trends

Some of the regulations directly or indirectly related to the global smart speaker market are discussed as follows:

Anti-Eavesdropping Act: This act is passed by the California State Assembly of the United States, which prohibits the makers of the smart speaker devices to share voice recordings with other third parties. Along with this, the smart speaker providers aren’t allowed to store the recordings of the consumer’s voice until and until they provide their written consent.

General Data Protection Regulation: It is developed by the European Union to address the transfer of personal data outside the European Union and European Economic Areas. According to it, the company engaged in the provision of the smart speaker should obtain unambiguous affirmative consent from the consumer before collecting and processing their data.

Market Size and Forecast

Based on geography

The North American region is leading the global market with a market share of almost 60% of the total global smart speaker market. The market size of this region is valued at USD 7.14 billion in the year 2019.
The European region accounts for a market share of almost 23.33% of the total global smart speaker market. The market size of this region is valued at USD 2.77 billion in the year 2019.
The Asia Pacific region accounts for a market share of almost 13.33% of the total global smart speaker market. The market size of this region is valued at USD 1.58 billion in the year 2019.
ROW stands for the rest of the world, which includes Middle East Africa, and South America. This segment accounts for a market share of almost 3.33% of the total global smart speaker market. The market size of this region is valued at USD 0.39 billion in the year 2019.

Based on the type of intelligent virtual assistant

The Amazon Alexa segment is leading the market with a market share of almost 31.7% of the total smart speaker market. The market size of this segment is valued at USD 3.77 billion in the year 2019.
The Google Assistant segment accounts for a market share of almost 31.4% of the total global smart speaker market. The market size of this segment is valued at USD 3.73 billion in the year 2019.
The Apple Siri accounts for a market share of almost 6% of the total global smart speaker market. The market size of this segment is valued at USD 0.714 billion in the year 2019.
Ali Genie accounts for a market share of almost 11.2% of the total global smart speaker market. The market size of this segment is valued at USD 1.33 billion in the year 2019.

Based on the application

The personal segment is leading the market with a market share of almost 77.7% of the total global smart speaker market. The market size of this segment is valued at USD 9.25 billion in the year 2019.
The commercial segment accounts for a market share of almost 22.22% of the total global smart speaker market. The market size of this region is valued at USD 2.64 billion in the year 2019.

Market Outlook

The global smart speaker market is expected to grow at the CAGR of 34% within the forecasted time horizon of 2020-2025 because of increasing adoption of Internet-connected technologies, energy-efficient features of the smart speaker, rising smartphone penetration rate, an increasing number of smart homes devices, and rising penetration rate of the smart speaker.

Its market value will reach USD 68.89 billion by the end of the year 2025.

Technology Roadmap

The major technological changes occurring in this global smart speaker market are automatic speech recognition technology including natural language processing, microphone technology, and smart voice searches.

These advanced technological trends are enhancing the functionality of the smart speakers and thus, improving the user experiences. The adoption of new and advanced technologies is driving the growth and development of the global smart speaker market.

Distribution Chain Analysis

The key stakeholders involved in the operation of this global smart speaker market are speaker manufacturers, software developers, distributors, sales, and end-users.

At first, the speaker manufacturing companies are engaged in the development of the hardware components for the speakers. The software vendors develop the software, applications, etc for the operation of the smart speakers. The smart speakers are available to the end-users through the offline and online distribution channels.

Competitive Factors

The key market players engaged in this market are competing for the product portfolio expansion, high investment in research and development activities, mergers & acquisitions, geographical expansion, and collaborations.

For instance, in December 2019, Baidu has launched the Xiaodu Smart Display X8 smart speaker supporting multiple biometric modalities including face and gesture recognition. Amazon has introduced the Echo device to access Alexa at home and provide a three-dimensional audio experience.

Key Market Players

The key market players engaged in the global smart speaker market are Amazon.com, Harman International, Apple Inc, Sonos Inc, Google, Bose Corporation, Sony Corporation, Panasonic Corporation, etc. Short profile of the key market players engaged in this market are discussed as follows:

Amazon.com: It is the US-based company engaged in the manufacture and sale of electronic devices, fire tablets, fire TVs, and the Echo. It provides the voice assistance platform, Alexa for smart speakers.

Harman International: It is the US-based company engaged in the design, manufacture, and marketing of audio and infotainment solutions for automotive, consumer, and professional sectors.

Apple Inc: It is the US-based company engaged in the design, manufacture, and sale of mobile communication, media devices, personal computers, and portable music players. It provides the voice assistant platform, Siri for smart speakers.

Sonos Inc: It is the US-based company engaged in the manufacture of wireless music systems including speakers, home theaters, and speaker components. It is providing services and products in more than 50 countries.

Google: It is the US-based company engaged in the sector of advertising, search, operating systems, platform, enterprise, and hardware products. It has Google Assistant as a virtual assistant platform.

Bose Corporation: It is the US-based company that designs and develops portable speakers, multiroom speakers, home theatres, and stereo speakers. It offers smart speakers compatible with Siri and Google Assistant.

Baidu: It is the China-based company engaged in the provision of image search, online storage, enterprise search, voice assistance, multimedia files, and algorithmic search It offers Raven H as voice-controlled intelligent personal assistant services.

Alibaba: It is the Chinese company engaged in the provision of the online and mobile marketplaces for retail and wholesale trade with cloud computing services. It offers Tmall Genie X1, as the personal assistant smart speaker.

Strategic Conclusion

The global smart speaker market is growing at a rate of 34% within the forecasted time horizon of 2020-2025 because of the increasing adoption of Internet-connected technologies, energy-efficient features of the smart speaker, rising smartphone penetration rate, an increasing number of smart homes devices, and rising penetration rate of the smart speaker.

However, privacy & security concerns, connectivity issues of the smart speakers, and difficulty in language localization might restrain the growth and development of this market.

References

Appendix

USD= United States Dollar

CAGR= Compound Annual Growth Rate