EMarketer: Amazon Loses Share In Smart Speaker Space As Competition Rises

Amazon is losing its iron grip on the increasingly competitive smart speaker market.

Amazon’s share will dip below two-thirds for the first time this year to 66.6%, according to a forecast released Thursday by eMarketer. Google will retain 29.5% of the market while other players like Apple, Sonos and Facebook capture the remaining 8.3%.

By next year, Amazon’s share of the market will drop again to 63.3%, eMarketer predicts. Meanwhile, Google’s share will rise to 31% while other smart speakers gain a 12% share.

“Amazon was the first mover,” said Victoria Petrock, principal analyst at eMarketer. “Now other competitors are jumping in, and if you’re the market leader, you have a target on your back.”

But as competition rises, each smart speaker is developing strengths that set it apart from the pack. Where Amazon has its ecommerce connection, Google has its search engine and opportunities to integrate voice with other products, like Google Lens.

“It’s not clear that there’s necessarily going to be a winner or a loser,” Petrock said. “It could end up that there are different voice assistants with different strengths and purposes.”

As more competition emerges in the market, smart speaker adoption is also on the rise. The number of Americans using these devices will increase 15% next year to 74.2 million, per eMarketer. By the end of next year, 26.8% of Americans will use a smart speaker.

But most people who own a smart speaker today use it for only basic functions. Roughly 80% of US smart speaker owners report listening to audio as their primary activity, followed by asking questions, according to eMarketer.

Just 0.4% of US ecommerce sales, or $2.1 billion, was transacted through voice activated devices in 2018. EMarketer lowered its forecast for the number of people who will make a purchase through a smart speaker from 31% in Q2 to 27%.

“People aren’t necessarily ready to buy using these speakers,” she said. “We’re seeing reordering and product research, but consumers want to see what they’re going to get before they buy it.”

But that could change as Amazon, Google and Facebook promote their voice-enabled devices with screens.

“People are still very wedded to the idea of seeing something before they buy it,” Petrock said. “If more devices start coming out with screens, you may see more people willing to shop on them.”

 

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