Smart Speaker Market Size, Share & COVID-19 Impact Analysis, By Type (Virtual Assistants, Wireless Speakers, and Others), By Application (Residential and Commercial), and Regional Forecast, 2021-2028

The global smart speaker market size was USD 7.82 billion in 2020 and is projected to grow from USD 9.04 billion in 2021 to USD 34.24 billion in 2028, at a CAGR of 21.0% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with smart speaker witnessing a positive impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a higher growth of 14.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Smart speakers have started gaining importance in recent years due to rapid growth in smart homes. They offer communicating functions through voice commands and are Wi-Fi enabled. They also act as a control hub for smart home devices.

The increasing demand for the speaker system in residential applications is anticipated to surge the product demand in near future. The proliferation of smart home products, development of artificial technology, and growth of display-based devices are a few major factors that are expected to create market opportunities for key players. Also, key market players are focusing on expanding their business units across the globe. For instance,

• In September 2019, Amazon launched a new line up of Echo devices to access Alexa at home with all new Echo Show 8, Echo Dot with clock, Echo, and Echo Flex. Also, the launched devices provide three dimensional audio experience with Dolby Atmos.


• In 2019, the Consumer Intelligence Research Partners (CIRP) estimates that Amazon Alexa and Echo dominate the U.S. market with 70% share followed by Google Home with 25% and Apple HomePod with 5%.

COVID-19 Impact

COVID 19 Pandemic to Create Significant Growth Opportunities for Smart Speaker Market Players

The COVID-19 pandemic has driven the need for speakers due to rapid growth of the smart home market. Also, due to expansion of wireless technology, end-users across the globe have started adopting advanced audio technology. This trend has significantly increased during remote working culture, which resulted in increased adoption of smart type of speakers.

Further, Asian nations, such as Japan, Taiwan, South Korea, India, and China, that have substantial raw materials producers, such as chipsets for voice assistants and stamped iron and aluminum that is used for frame, have encountered unclear production schedules and lockdowns throughout the world.

Economic uncertainties and work from home situation caused by the pandemic have increased the usage of speakers across various residential applications for everyday tasks. Various tasks, including turning on lights, controlling other smart devices at home, adjusting the thermostat, setting timers, alarms, or reminders, streaming music or podcasts have further boosted the market growth. Also, in 2020 due to COVID-19, speaker shipment decreased but still maintained growth. According to Strategy Analytics, global sales of smart speaker in the first quarter of 2020 reached 28.2 million units, with an increase of 5%. Further, in the second quarter of 2020, the number reached to 30 million units with the rise of 6%.

LATEST TRENDS

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Integration of Artificial Intelligence (AI) Technology with Smart Speaker

Artificial intelligence (AI) integrated chipsets that are being used for smart type of speaker offer voice control, audio quality, and enhanced battery life. Further, voice recognition technologies and natural processing language (NPL) are making it possible to better understand voice commands being given to speakers.

For instance, Baidu’s expertise in AI gives it major advantages in building conversational capabilities and voice assistant speakers with natural processing language.

DRIVING FACTORS

Increased Adoption of Smart Home Products to Aid Market Growth

Consumers are progressively adopting smart home devices, including smart kitchen appliances, security cameras, smart locks, smart lights, thermostats, and smart TVs. Further, this type of speaker act as single point of control and contact hub through which all the smart devices can be easily operated and controlled remotely. For instance, Xiaomi is trying to develop an Artificial Intelligence of Things (AIoT) system using speaker as a control hub that would help in connecting its other IoT products. Further, Xiaomi has almost 324 million devices connected on its AIoT platform.

Many speaker companies, such as Apple Inc., Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, and others, have begun to offer smart home connectivity features to their speakers while others are collaborating and partnering with smart home product providers, including Xiaomi and Siemens AG. For instance, in October 2020, Apple Inc. launched HomePod mini speaker that is compatible with Apple's voice assistant Siri and edge software. Further, HomePod mini is enabled with Wi-Fi and smart home capabilities with built-in security and privacy.

Increased Demand for Display-Based Smart Speaker Device expected to Fuel Market Growth

The increasing growth of display devices is helping sustain the growth of the market. Key players in the market are increasingly switching to display-based devices due to evolving use cases, including social networking, watching online content, and video call features.

Further, key players provide a wide range of smart display devices products. For example, Amazon Echo Show 5, Facebook Portal, Google Nest Hub (2^nd Gen), Redmi Touch Screen Speaker 8, Lenovo Smart Display 7, Xiaodu Zai Jia 1C (Baidu), Alibaba Tmall Genie CC8, and JBL link view are a few devices with display capabilities. Also, regular updates and enhancements are being made to these products according to end-user requirements.

• In September 2020, Baidu announced financing for Smart Living Group (SLG), including Xiaodu smart devices and DuerOS voice assistant platform. Further, the funding is a Series A financing with a valuation of USD 2.9 billion.

RESTRAINING FACTORS

Threat to Privacy and Data Security to Hinder Market Growth

Data security, compatibility issues with smartphones and other devices, threat to privacy, and lack of standardization are the major threats hindering the growth of the market. Further, sharing data over connected devices led to privacy issues. For instance, a smart type of speaker has features to synchronize your corresponding device data, thereby raising concerns about data security. Therefore, the impact of data privacy and security threat will affect the smart speaker market share for a few years.

SEGMENTATION

By Type Analysis

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Virtual Assistants to Dominate Market Owing to Rising Demand in Residential Applications

Based on type, the market is categorized into virtual assistants, wireless speakers, and others. Virtual assistant is expected to lead the market during the forecast period. The increasing demand for virtual assistants across industries, including residential and commercial is expanding the market size. Companies, including Apple Inc., Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, and others are investing in developing advanced virtual assistants. Also, the companies are focusing on integrating solutions with artificial intelligence (AI) to offer virtual assistants with voice control, audio quality, and enhanced battery life.

Wireless speakers, including Amazon Echo Show 5, Facebook Portal, Google Nest Hub (2nd Gen), Redmi Touch Screen Speaker 8, Lenovo Smart Display 7, Xiaodu Zai Jia 1C (Baidu), and others are expected to witness fast growth during the forecast period, owing to the rising demand for display-based wireless speakers. Further, these factors are anticipated to drive the market growth in the near future.

By Application Analysis

Increasing Adoption of Smart Speakers in Residential Sector to Propel Market Growth

Based on application, the market is categorized into the residential and commercial. Residential is expected to hold maximum market share during the forecast period. For instance, in December 2019, Baidu launched Xidodu Smart Display X8. The new launch for residential speakers offers robust four microphones to facilitate voice interactions and 8-inch full touchscreen display. Also, X8 supports gesture multiple biometric modalities such as recognition and face. The increased adoption of this type of speakers in residential application is expected to drive the market growth.

Commercial application is expected to gain traction due increased adoption of smart assistants for businesses that help in managing business tasks with increased efficiency. Commercial use of these speakers helps employees to stay prepared, organized, and focused, eventually boosts productivity, and thus further anticipated to drive the growth of the market. The market growth is attributed to rising use across residential and commercial applications in developed nations such as the U.S., Canada, Germany, and others.

REGIONAL INSIGHTS

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Geographically, the market is segmented across North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

North America has witnessed rapid growth in smart speakers due to early adoption of advanced technologies and a strong economic landscape. The penetration of speakers in the region is due to the presence of key speaker providers. The readiness of customers to use and accept new technology has also encouraged key providers in North America to develop advanced and new products. Further, according to the Smart Speaker Consumer Adoption report, the number of speakers per user rose by 10% from 1.8 in 2018 to 2.0 in 2019. In addition, the report states that there were about 133 million smart speakers in the U.S. in 2019, wherein 60% of users identified themselves as daily users. Also, the major market players, including Amazon Web Services, Apple Inc., and Bose are based in the U.S., owing to which the products are shipped and launched in the region first. These key factors are driving the market growth. Furthermore, according to the Smart Speaker Consumer Adoption report, in 2019, the U.S. smart speaker penetration rate was highest at 26%.

Key players in Europe are increasingly embracing the speaker for smart homes, owing to the development of digital technologies in the region with a significant growth rate. For instance, in 2019, there were 13 million people using speakers with 22% penetration rate in the U.K. Similarly, in February 2020, Germany is expected to pass a new law for adaptable online media houses that will consider voice assistants as ‘end-user interfaces’ and help make more accountable to the country’s rules. Also, investment by key players in the market, government projects, and increasing funding in research and development activities are a few of the driving factors for the market growth in the region.

The market growth in Asia Pacific is led by Japan, South Korea, China, and India. For instance, in 2019, China was ranked first globally in speaker with nearly 86 million users. Also, key players, including Xiaomi, Alibaba, and Baidu are among leading enterprises focusing on domestic consumers. China is among the largest markets in voice enabled smart home services and products. Further, according to the China Electronics Standardization Institute (CESI), the smart homes market in China is growing with the growth rate of 20–30% each year.

In South America and the Middle East & Africa regions, the adoption of speakers is supported by the rising adoption of digital technologies. For instance, in December 2021, Google launched its artificial intelligence-powered virtual assistant in Saudi Arabia. Google has been specially adapted to understand all Saudi dialects and respond in standard Arabic. These features will allow Google to sing and joke in Arabic language.

KEY INDUSTRY PLAYERS

Key Players Emphasize Partnerships and Acquisitions to Strengthen Market Position 

Apple, Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, Facebook, Jam Audio, KaKao, and KitSound by Kondorare are some of the key players in the market. Major players in the market are developing speakers integrated with AI and others. Additionally, the rising market competition is forcing key market players to focus on the acquisition strategy for strengthening their positions. For instance,

• October 2019 – Alibaba AI Labs announced AliGenie has integrated with more than 660 IoT platforms, covering 60 different product categories and can be found on 200 million devices in 900 brands and 3,600 device models.

List of Key Companies Profiled:

• Apple Inc. (California, U.S.)


• Avnera Corporation (Oregon, U.S.)


• Baidu, Inc. (Beijing, China)


• Deutsche Telekom (Bonn, Germany)


• Fabriq (England, U.K.)


• Facebook (California, U.S.)


• Jam Audio (Michigan, U.S.)


• KaKao (Jeju-si, South Korea)


• Lenovo (Quarry Bay, Hong Kong)


• LG Electronics (Seoul, South Korea)

KEY INDUSTRY DEVELOPMENTS:

• June 2019 – Alibaba Tmall Genie launched Tmall Genie Auto for connected cars. Further, Volvo and BMW have initially agreed to install Alibaba’s speakers to their cars with the launch. The company has added Honda, Renault, and Volkswagen’s Audi to its customer list.

REPORT COVERAGE

An Infographic Representation of Smart Speaker Market

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The market research report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry and smart speaker industry trends and analyzes technologies deployed at a rapid global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

Report Scope and Segmentation