Voice-Controlled Speaker Market Growth Depends on Compelling Use Cases, SA Reports

Smart speaker shipments, reaching 5.9 million units globally in 2016, will grow 10 times by 2022, driven by improved speech recognition accuracy, compelling use cases and multilanguage support, said a Strategy Analytics report Monday. Smart speaker revenue is forecast to reach $1.5 billion this year and $5.5 billion in 2022, it said. Amazon's Echo product line dominates the market, but competition is set to heat up this year as Google Home enters its first full year of sales and other Wi-Fi speaker manufacturers begin to build microphones and virtual assistant platform-compatibility into products, the research firm said. Conversational, hands-free interaction with the internet is “very compelling,” Strategy Analytics analyst David Watkins said. Although early smart speakers have “obvious limitations,” future versions will deliver new use cases such as voice calling, travel planning, remote learning and healthcare services, Watkins said. Advances in voice biometrics and voice authentication “will help ease privacy concerns and make the devices more adaptable to multi-user environments,” Watkins said. Adoption across different markets will depend on integration of localized services with the relevant voice platform and “near-human levels of accuracy” with speech recognition and contextual understanding, the analyst said. With Amazon’s $50 Dot device already an “impulse" buy, cost isn’t expected to be a barrier to entry, analyst Bill Ablondi said. Attractive pricing will drive adoption of the technology beyond the tech-savvy customer, but compelling use cases will have to emerge to “ensure that these devices do not end up collecting dust after an initial period of experimentation,” Ablondi said.