Smart Speakers and Smart Displays Are One of the Strongest-performing New Consumer Electronics Categories

Smart speakers and smart displays are one of the strongest-performing new consumer electronics categories since tablets and smartphones. Their upward trajectory has continued even amidst the COVID-19 pandemic, now reaching nearly half of US broadband households. Smart speakers and smart displays are on their way to reaching levels of adoption and ubiquity not seen since perhaps the DVD player. To that end, the products themselves are now in their third and fourth generations and have seen technical maturation accompanied by continual aesthetic refinements to form factors, colors, and materials. The smart speaker / smart display category is now a lifestyle product staple within the modern connected home, and this product evolution is a clear sign of the shift.

Amazon, Google, and now Apple are battling for ecosystem dominance within the household, and smart speakers and smart displays are increasingly seen as a platform battleground with manifold potential benefits in terms of control of the smart home, media consumption, ecosystem product propagation, service subscriptions, user data, and other areas.

Third parties such as Sonos, Harman (Harman Kardon, JBL), Sony, Lenovo, and others continue to have a steady presence in the market, but the smart speaker / smart display landscape is solidly dominated by first-party products from the big three voice assistant ecosystem competitors – Amazon, Google, and Apple. As these three heavyweights redouble their efforts in this market, third parties must deliver substantive differentiation in features, functionality, form factor, and aesthetics in order to maximize their share of the limited oxygen left behind by the three ecosystem companies.

Currently, 43% of all smart speaker and smart display owners own multiple brands; brand experimentation and mixed-brand ownership continue to rise. This product category is maturing, with greater choices being offered and average prices in decline. As a result, an increasing number of users are using multiple brands of devices within the household – either due to choice or due to increased gift-giving of increasingly-affordable smart speakers / displays. Most telling though is the growth in the percentage of households with more than two brands of devices, nearing 30%.

Q4 2020 saw brand exclusivity decline in smart speaker and smart display households. Amazon and Google’s presence in both single and multiple-product homes declined, while at the same time, the share of households owning other brands either exclusively or alongside Amazon and/or Google increased.

Brand experimentation is rising, with Apple, Harman Kardon, JBL, Sonos, Lenovo and others providing alternatives to the long-standing dominance of Amazon and Google in this market. Apple’s introduction of the less-expensive HomePod Mini in late 2020 is also a likely factor in the ownership growth of non-Amazon/Google brands.

Amidst this healthy growth, privacy concerns regarding companies’ use of user data and retained audio / video recordings still continue.?For the industry to maximize long-term adoption potential of smart speakers and smart displays, it will eventually need to definitively address these issues and allay remaining public fears.

This research is an excerpt from the study Smart Speaker and Smart Display Market Assessment, with insights from Paul Erickson, Parks Associates Director of Entertainment Research. We love feedback about our research. For any questions, feel free to contact me or visit our website at www.parksassociates.com. Thank you for reading our research!