ON World

Innovations Will Drive the Smart Speaker Market to $22 Billion by 2028

Smart speakers are one of the fastest growing consumer products used by nearly half of US households last year after the first product emerged in 2014. Sales have been volatile over the past two years with overall ownership rates relatively flat in mature markets such as North America and Europe. Because of this, much of smart speaker sales in mature markets will come from repeat customers who add to their collection of smart speakers.

ON World’s latest survey with 750 smart home early adopters found that 80% of the North American respondents and 60% of the respondents from Europe have purchased 2 or more smart speakers in the last two years. Forty-three percent in North America and 16% in Europe have purchased 3 or more during this period. Nearly all (88%) of current smart audio users in North America and two-thirds of the respondents in Europe are planning to purchase additional smart speakers in the future. 

Amazon Echo continues to hold the number one position in terms market share with 7 in ten early adopters having purchased at least one Amazon smart speaker. Google is gaining traction especially in North America where 56% of the surveyed consumers have purchased one of the Google smart speakers and nearly half of respondents would consider purchasing a Google smart speaker in the future. 

While it still has a relatively small portion of the market, Apple’s HomePod increased the fastest of all smart speakers with primary voice assistants in 2020 when it launched its more affordable HomePod Mini. Apple is currently used by 6% of the surveyed early adopters in North America and Europe although 1 in 3 of surveyed online consumers would consider buying an Apple smart speaker in the future. 

Near saturation of smart speaker ownership has driven smart speaker innovations such as stereo-quality sound, multi-room audio, video displays and dual-purpose smart speakers as smart home hubs.

Stereo Quality Sound and Multi-Room Wireless

Of the smart speaker market leaders with a primary voice assistant, Apple’s HomePod uniquely provides stereo-quality sound with multi-room wireless functionality. Stereo-quality and multi-room speakers with third party voice assistants was one of the fastest growing segments last year. Examples include Sonos, Bose, JBL, Sony, Savant, Denon and Belkin. One of the first vendors to offer a smart speaker using a third-party voice assistant, Sonos announced this month that it has created its own music-centric voice assistant that is immediately available as an option on all its multi-room smart speakers

Although this was not stated in the question, we interpret this to mean they would prefer to not have a dedicated hub which to them means a redundant expense and added complexity. The latest Thread update and upcoming Matter standard addresses these consumer concerns and preferences while simplifying product development for vendors and accelerating opportunities for the entire smart home ecosystem.

Smart Speakers as Smart Home Hubs

Many existing multi-purpose products already have the required hardware (IEEE 802.15.4 chipset) to support smart home automation. Many of these currently use wireless mesh network protocols such a Zigbee or Thread and will likely support the Matter standard when this is released later this year.

Another growing trend is for smart speakers with integrated smart home connectivity technologies such as Zigbee or Thread. These wireless mesh technologies enable consumers to have centralized, whole-home automation and control of smart home products such as lighting controls, security sensors, cameras, and thermostats. Examples of smart speakers that have immediate smart home hub connectivity include Amazon’s Echo 4th generation, Echo Plus and Echo Studio as well as the Echo Show 10 smart display, Google’s Nest WiFi point, the Nest Hub Max and Apple’s HomePod Mini. 

By 2028, annual revenues for smart speakers will reach $22.2 billion up from $9.4 billion in 2021.

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About ON World:
ON World provides market research and business intelligence on Internet of Things (IoT).  Since 2003, our research reports, datasets and customized research services have been used by Fortune 500 companies, investors and developers worldwide to advance IoT solutions in hundreds of industries.

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 05/16/2022