It’s not going to surprise anyone that in the latest totting up of smart speaker shipments Amazon’s Echo is leading the pack. The latest numbers come from Strategy Analytics, looking at the smart speaker market globally in Q2 2018.
The headline figures are that Amazon shipped 4.8m speakers in Q2, giving it a 41% market share. Google meanwhile shipped 3.2m to give it a 27.6% share. It appears to be a two-horse race here as trailing behind are Alibaba (0.8m speakers and a 7% market share) and Apple (0.7m speakers and a 5.9% market share).
But compare those numbers to the same period in 2017 and a more arresting story emerges. Amazon may have enjoyed year-on-year growth of 64% between Q2 2017 and Q2 2018, but it has seen its market share plummet dramatically. In Q2 2017 it held a remarkable 75.8% share (based on shipments of 2.9m units), so it has watched its share of the global market halve in the past year. That is obviously due to increased competition as new devices (notably those from Alibaba and Apple) come into the market. But it is primarily the rapid growth of Google Home – going from 0.6m units and a 16.1% market share in Q2 2017 to 3.2m units and a 27.6% share a year later – that will be Amazon’s biggest concern for the coming years.
This is obviously being regarded as a boom time for the diverse range of players with devices now in the market. In Q2 2017, 3.9m speakers were shipped globally, but this jumped to 11.7m in Q2 2018. The good news for Amazon is that the market is still growing, it is still dominating and it saw its shipments go up 64%; but it effectively had the field to itself last year and is now facing far more aggressive competition, with Google working furiously to close the gap.
“Amazon and Google accounted for a 69% share of global smart speaker shipments in Q2 2018 down from over 90% in Q2 2017,” said David Watkins, director at Strategy Analytics. “The drop is not only a reflection of growing competition in the smart speaker market but also Amazon and Google’s inability to break into the fast growing Chinese market that is dominated by local powerhouse brands such as Alibaba, JD.com and Baidu.” He added, “China has the potential to be a hugely lucrative market for smart speakers and the voice assistant platforms that power them and Google’s recent $500 million strategic partnership with Chinese ecommerce giant JD.com is a sign that it is deadly serious about not missing the opportunity.”
Context, of course, is key. These numbers are all shipments, not sales; so maybe we can snidely back reference the old “sipped platinum, returned gold” jibe that haunted the record business in the CD era. Earlier this month, Music Ally worked through lots of the numbers and forecasts here to try and offer a more realistic sense of what is happening in the smart speaker sector as well as what is likely to happen next. Strategy Analytics and Canalys are both quite bullish about the vertiginous nature of the growth curve, but Futuresource is a bit more reserved in its forecasting. To sound a note of caution amid the hysteria gripping the sector, everyone needs to be careful not to write cheques today that tomorrow can’t cash.