Study: Amazon's Q1 smart speaker market share plummets

Dive Brief:

Global smart speaker shipments reached 9.2 million units in Q1 2018, a 278% growth from Q1 2017. While Amazon shipped 4 million of those during the quarter, its market share has slipped to 43.6% from 81.8% year-over-year, according to new data from Strategy Analytics.
Google shipped 2.4 million smart speaker units in the quarter, giving it a 26.5% market share. The company’s market share was 12.4% in Q1 2017. Amazon and Google dominate the market with a 70% share of global smart speaker shipments in Q1 2018, but their combined share has dropped from 84% in Q4 2017 and 94% in Q1 2017.
Strong growth in the Chinese smart speaker market put Chinese companies Alibaba and Xiaomi in the third and fifth spots, respectively. Alibaba held 7.6% of the global smart speaker market in Q1 2018. Apple was the fourth-largest brand with 6% of the market share for the quarter.

Dive Insight:

The smart speaker market is growing rapidly but is still relatively young, so the landscape continues to evolve, meaning marketers will need to closely weigh the relative benefits of the different platforms before choosing a partner with as more consider voice-driven marketing opportunties. Ad spend on voice-powered digital assistants is expected to reach nearly $19 billion by 2022, according to Juniper Research.

While Amazon remains the market leader in this space, the Strategy Analytics reports suggests the e-commerce retailer's position is weakening as competition heats up. Google, in particular, could be a threat to Amazon's dominance as the search giant aggressively expands in the smart home market and putting its considerable AI tech behind it. Google also outperforms the competition when it comes to answering questions correctly.

Amazon is more aggressively marketing its smart speakers as competition heats up, such as by turning model houses into Alexa-powered smart homes.

The report shows that the smart speaker market is growing rapidly in China, where Amazon and Google are absent, giving a boost to domestic producers Alibaba and Xiaomi, which are taking a piece of the market share. Apple’s new HomePod speaker has been something of a bust with consumers, leading the company to lower its sales forecast for the product after only 10 weeks on the market. Still, Apple was the fourth largest smart speaker brand worldwide in Q1, according to Strategy Analytics with a 6% market share.

Research continues to show that consumers are interested in voice-powered devices and how the technology can be used to make daily tasks easier. As the devices continue to gain a foothold with consumers, it can present new opportunities for marketers to provide enhanced shopping experiences and deeper connections with consumers. Most consumers with the devices aren’t yet using them to make purchases, prompting marketers to experiment with providing product information or answering questions. Brands that have similar, repeat business, such as pizza ordering, are beginning to use the technology for commerce.