U.S. Smart Speaker Market

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01
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Part
01

U.S. Smart Speaker Market Projections

The number of homes with a smart speaker is estimated to reach 51.99 million by 2020, growing at a CAGR of about 16.09% during 2018-2020 and beyond (2025).

MARKET PROJECTIONS

  • Around 35.78 million U.S. households owned at least one smart speaker in 2018. That share is projected to reach around 51.99 million and 101.69 million by 2020 and 2025, respectively.
  • The rate of growth of smart speakers in the United States to 2020 and beyond (2025) is projected at approximately 16.09 %.
  • Statista Research Department predicts that the household penetration rate of smart speakers in the United States will grow from around 28% in 2018 to 40% in 2020, and reach 75% by 2025.
  • This is consistent with Loup Ventures analysis that estimates that "75% of U.S. households will have smart speakers by 2025" a rise from 28% in 2018.
  • Joint Center for Housing Studies (JCHS) projected that the number of households in the United States would increase by roughly 11 million during 2015-2025.
  • According to the US Census Bureau, the number of households in 2015 was about 124.59 million.

RESEARCH STRATEGY

The research team gathered statistics from industry databases and government sites such as Statista, Joint Center for Housing Studies (JCHS), and US Census Bureau to triangulate the projected households with a smart speaker by 2020 in the U.S. and the growth projections for the market for 2020 and beyond (2025).

NUMBER OF HOUSEHOLDS 2018-2025
In 2015, there were about 124.59 million households in the United States, projected to reach around 135.59 million in 2025 — an increase of about 11 million.
The projected growth rate during 2015-2025 is 0.85% — calculated using the CAGR calculator, where the period (n) is (10), initial (i) and final (f) values are (124.59 and 135.59, respectively).

Therefore, the number of households by year calculated using the CAGR calculator:
2018 – 127.79 million; r(0.85), i(124.59), and n(3)
2019 – 128.88 million; r(0.85), i(127.79), and n(1)
2020 – 129.98 million; r(0.85), i(128.88), and n(1)
2021 – 131.08 million; r(0.85), i(129.98), and n(1)
2022 – 132.19 million; r(0.85), i(131.08), and n(1)
2023 – 133.31 million; r(0.85), i(132.19), and n(1)
2024 – 134.44 million; r(0.85), i(133.31), and n(1)
2025 – 135.59

NUMBER OF HOUSEHOLDS WITH SMART SPEAKERS 2018 – 2025
2018 – 35.78 million (28%*127.79)
2019 – 45.11 million (35%*128.88)
2020 – 51.99 million (40%*129.98)
2021 – 65.54 million (50%*131.08)
2022 – 79.31 million (60%*132.19)
2023 – 86.66 million (65%*133.31)
2024 – 94.11 million (70%*134.44)
2025 – 101.69 million (75%*135.59)

GROWTH PROJECTION 2018-2025
Using the CAGR calculator, the growth rate for the number of households with smart speakers is anticipated at approximately 16.09% — where f(101.69), i(35.78), and n(7).
Part
02
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Part
02

U.S. Smart Speaker Usage

Smart speaker owners in the U.S. use the device mostly in the living room (63%), bedroom (42%), kitchen (37%), office (22%), bathroom (13%), and outside (5%). Also, 43% of smart speaker owners want to interact with their favorite brands on the devices.

MOST COMMONLY USED PLACES

  • Adobe Analytics survey reveals that smart speakers are mostly used in the living room by U.S. owners, about 63% on a relative user basis.
  • Forty-two percent of the owners report that they use the device in their bedroom, and 37% in their kitchen.
  • Twenty-two percent of smart speaker owners surveyed by Adobe Analytics said that they have such a device in their office. "Bathroom use is at 13%, and only 5% reported having a smart speaker outside."

CONSUMER ENGAGEMENT WITH BRANDS

  • The Smart Audio Report reveals that eight in ten smart speaker owners (or 80%) in the United States are very tolerant of brand participation. They are open to brands creating skills and features to communicate with them.
  • However, a recent survey conducted by NPR and Edison Research of 1,800 consumers found that only 43% of smart speaker owners in the country would be interested in using the device to connect with brands they follow on social media. This research is echoed by multiple publications, including Musically, Stella Rising, and Retail Wire.
  • Data from Google and Peerless Insight reveals what smart speaker owners would like from brands. Fifty-two percent are most interested in receiving information about deals, sales, and promotions from brands.
  • Another survey, the U.S. Smart Speaker Consumer Adoption Report 2019, found that 31.4% of smart speaker owners in the U.S. want to use their devices to engage with brands through the customer service departments.
  • Over 50% of owners nationally are using the device to shop. Around 38% are using it to buy groceries, and about 26% are doing so regularly.
  • Approximately 42% are buying household products or toiletries this way, and over 43% "are buying other types of goods via their device."

RESEARCH STRATEGY

The research team searched through publicly available industry databases and credible media sites such as Adobe Analytics, Stella Rising, Retail Wire, and more to determine where smart speakers are most commonly used in the U.S. and the percentage of owners who want to interact with their favorite brands this way. To determine the latter, we assumed this to be the percentage of owners who want to interact with the brands they follow on social media — meaning they are their favorite. In addition to these statistics, the team also provided information about what smart speaker owners would like from brands and those already using it in their buying decisions.
Part
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Part
03

U.S. Business Smart Speaker Usage

After an exhaustive search through credible sources, it appears the percentage of businesses in the United States that have smart speaker skills/actions, along with their reasons for doing so, is unavailable in the public domain.

HELPFUL FINDINGS

U.S. Business Smart Speaker Usage

  • By 2018, there were over 50,000 Alexa skills globally, compatible with about 20,000 different devices, and utilized by over 3,500 brands.
  • The number of Alexa skills in the US by 2018 exceeded 30,000.
  • Specific to companies, several prominent household brands in the United States (e.g., LEGO, Betty Crocker) have created applications or skills to interact with consumers and promote their offerings.
  • The companies that witnessed the most frequently named “branded” skill/application administered by owners of smart speakers were Tide (6%), Glad trash bags (5%), Quaker Oats (2%), Campbell’s soup (2%), etc.
  • Some news companies with Alexa skills include: NPR’s Alexa skill known as NPR News Now, The Wall Street Journal skill, which provides command-based answers on news summary, latest podcasts, market updates, and the CNN Alexa news skill.
  • According to the 2017 Enterprise Tech End-User Sentiment Survey from Unit4, 38% of specialists declared that they employ a digital assistant similar to Alexa for personal reasons. Meanwhile, 11% maintained that they use it for professional reasons.
  • Around 91% of decision makers at companies are conducting major investments in voice technologies.
  • At least 88% of business decision makers claimed they plan to uphold numerous voice assistants (e.g., Apple Siri, Google Assistant, and Amazon Alexa).
  • Less than one-third (22%) of companies in the U.S. have released a voice app, while about 44% intend to do the same during 2019.

Reasons for using smart speaker skills for their businesses

  • According to a 2018 Strategy Analytics Consumer Survey, in the United States, more than two-thirds (61%) of smart speaker users utilize an Amazon device, and therefore, news sites publishing to audience that speak English "have the most to gain from creating an Alexa skill news show for their brand."
  • A survey from Adobe revealed that U.S. consumers are routinely utilizing smart speakers to review news and weather updates and enjoy music.
  • By September 2018, in the United States, the potential smart speaker audience reach amounted to 57.8 million, and it was expected to exceed 60 million by the conclusion of the year.
  • Other reasons include the fact that smart speakers are more convenient than podcasts, they act as an additional revenue stream, and future proofing news sites.
  • According to a survey done by Adobe, the three leading objectives of companies investing in voice apps are :
  • Enabling customer purchase (45% of the surveyed respondents)
  • Tracking orders (45% of the surveyed respondents)
  • Facilitating renewals and repeat purchases (44% of the surveyed respondents)

Research Strategy:

Our research began by examining market research and industry analysis reports concerning the smart speakers market. We searched sites such as Technavio, GMInsights, Mordor Intelligence, Markets and Markets, Market Research, etc. for market research reports. Meanwhile, we checked sources such as PWC, Nielsen, Deloitte, BCG McKinsey, etc. for industry analyses. We wanted to locate data on the penetration of US businesses in the US market, either in terms of the percentage of companies using smart speaker skills or the share of smart speaker skills that businesses enjoy within the market. However, the information we found was limited to the overall usage of smart speakers, particularly by consumers, the share of companies, growth of the market (overall), etc., without providing any specific instance for the usage by businesses.

Next, we visited the sites of the providers of smart speakers, namely Amazon, Google, and Apple. We looked into sources discussing details on their products such as Alexa, Google Assistant, etc. We explored their websites for growth and performance reports, investor presentations, etc. We aimed to find out what these companies said about their share in the business smart speaker market, or the number of companies adopting it. However, we could not find data on smart speaker skills/actions backed by market data, and the information available was mostly qualitative, discussing what these companies thought about the benefits of using their products or services.

Finally, we consulted sources that publish US-based news on technological companies or any news specific to technological businesses. These sources included sites such as Forbes, Business Wire, Business Insider, Fortune, WSJ, CNBC, Tech Crunch, Tech Republic, etc. Although we focused our search on discovering business usage related to companies having smart speaker skills/actions, the data we came across centered on the consumer usage of these services or products, or the latest technological advances made by a company.
Part
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Part
04

Top Smart Speaker Skill Usage

Since smart speakers can have over 15,00 skills, we had to get creative to determine the top five business categories that use the most smart speaker skills. According to our analysis explained below, the top five business categories that use the most smart speaker skills are Travel/Lodging, Media & News, Real Estate, Recreation & Sports, and Healthcare. The checklist we created for this analysis is included in this Google Doc and the details of that checklist are explained below.

Findings

1. The Data

  • Smart speaker skills have been described as "akin to apps on a smartphone, that unlock capabilities such as reading recipes or ordering pizza."
  • Due to the huge number of smart speaker skills (over 15,000), we needed a categorized way through which to analyze those skills with regard to business categories that use those skills. For that, we found a list of the categories for all smart speaker skills published on the website for Amazon Alexa. That was key information because it allowed us to group the huge number of smart speaker skills and analyze them with regard to the business categories.
  • We chose Amazon Alexa as our source for smart speaker skill categories because that particular smart speaker has a 70% share of the U.S. smart speaker market per an article published by Marketing Land in August 2019.
  • The first category of smart speaker skills is Custom Skills. These skills involve performing a vast array of routine tasks, such as looking-up information or ordering food. In fact, the Custom Skills category is so broad that it can involve practically any type of action that's able to be properly coded.
  • The second category of smart speaker skills is Smart Home Skills. These skills are able to perform directives such as changing TV channels, turning lights on, or changing the temperature.
  • The third category of smart speaker skills is Flash Briefing Skills. These skills involve information feeds and do things such as telling people news headlines or providing briefings on a certain topic, based on text or audio information.
  • The fourth category of smart speaker skills is Video Skills. These skills involve controlling videos such as changing channels or playing content.
  • The fifth category of smart speaker skills is Music Skills. These skills "provide audio content such as songs, playlists, or radio stations."
  • Lastly, the sixth category of smart speaker skills is List Skills. These skills are able to do things such as remove items that are on a list, add items to lists, or update items that are included on a preexisting list.
  • After establishing those skill categories, we then looked for and found a list of business categories. Twenty-five business categories were included in that list, which are included below and in the Google Doc checklist.

2. Our Checklist

  • To determine the business categories that use the most smart speaker skills, we decided to make a checklist in this Google Doc.
  • We structured that checklist so that we could mark each smart speaker skill category that's part of each business category's core business operations.
  • We then completed that checklist accordingly.
  • We determined the top five business categories that use the smart speaker skills by counting the number of check marks for each business category.
  • Those calculations determined that Travel/Lodging, Media & News, Real Estate, Recreation & Sports, and Healthcare are the five business categories that use the most smart speaker skills. Each of those five business categories use five of the six smart speaker skills categories. In fact, those were the only five business categories that use that number of smart speaker skills, so these were indeed the top five business categories per our analysis.
  • With the exception of Custom Skills and List Skills, we provided at least one example of a smart speaker skill for each business category that had a corresponding check mark (e.g. the Entertainment & Arts business category uses Music Skills, so we marked that box in the checklist and provided an example of such usage as part of its core business operations). All those examples are listed in the next section of our research findings below and thus are not provided in the checklist.
  • All the business categories use Custom Skills (due to the vast nature of such) and List Skills (because all businesses make and use lists), which is why we checked that box for each business category.
  • An "X" mark in the Google Doc means that the business category uses that smart speaker skill as part of its core business operations.

3. Examples of Smart Speaker Skills Used By Each Respective Busines Category

  • As was previously noted, this section contains at least one example of a smart speaker skill for each business category that had a corresponding check mark in the checklist.
  • The following findings (sub-sections A, B, and C) include each business category that we analyzed, followed by the smart speaker skills that each business category uses as part of its core business operations (excluding Custom Skills and List Skills for which no examples are provided, as was explained above). At least one example of each such skill is provided.
  • Since there are 25 business categories, we broke them up into three different groups for better readability.

A. Business Categories 1-8

  • Entertainment & Arts: Video (movies, shows) and Music (soundtracks, songs)
  • Auto Service/Sales: Custom and List only
  • Finance/Banking: Flash Briefing (business news)
  • Accounting/Tax: Custom and List only
  • Business Services: Flash Briefing (business news) and Video (meeting/presentations)
  • Community Organizations: Video (meetings/presentations)
  • Dental/Orthodontics: Music (waiting rooms)
  • Education: Video (educational videos for students) and Music (educational songs for students)

B. Business Categories 9-16

  • Health/Wellness: Video (instructional videos) and Music (gym/workout soundtracks)
  • Healthcare: Flash Briefing (business/health news), Video (instructional videos), and Music (waiting rooms)
  • Home Improvement: Smart Home (installations) and Video (step-by-step instructional videos)
  • Insurance: Custom and List only
  • Web/Internet Services: Video (website development and content marketing) and Music (content marketing)
  • Legal: Flash Briefing (business/legal news)
  • Travel/Lodging: Smart Home (room light control), Flash Briefing (flight status), and Music (lobbies/entertainment areas)
  • Advertising & Marketing: Video (content/advertisements) and Music (content/advertisements)

C. Business Categories 17-25

  • Media & News: Flash Briefing (news story updates), Video (content), and Music (content)
  • Pet Services: Custom and List only
  • Real Estate: Smart Home (selling a house), Flash Briefing (business/market news), and Video (presentations)
  • Restaurant: Music (playing music in the dining rooms and lobbies)
  • Retail: Music (playing music in-store)
  • Recreation & Sports: Flash Briefing (game scores, team standings, and news), Video (broadcast and content), and Music (in-stadium and content)
  • Transportation: Custom and List only
  • Utilities: Custom and List only
  • Meetings & Events: Video (presentations) and Music (background music at events)

Your Research Team Applied the Following Strategy:

The best and most-accurate way for us to determine the business categories that use the most smart speaker skills was grouping those skills by category. That's because there are over 15,000 skills, which wouldn't have been feasible for us to analyze individually. Nonetheless, we looked for such a list just in case one existed, but didn't find any. The six categories we included were the ones provided by the Amazon Alexa website, so we are confident in using those categories as the basis for our analysis due to that smart speaker's industry standing. While it's possible to think of a way that each business category could use a certain skill category (e.g. any business category could use Smart Home Skills to turn on office lights), we considered the core aspects of the work that each business category does or the services each business category provides (e.g. the travel/lodging business category would use Smart Home Skills because they provide rooms to guests, which could certainly incorporate smart home skills). Since all business categories use Custom Skills and List Skills as part of their core business operations, we placed a check mark for each of those skills for each business category and thus didn't provide examples of such. Together, this research process enabled us to determine the top five business categories that use the most smart speaker skills (per our analysis) in a creative way due to the vast array of smart speaker skills.
Part
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Part
05

U.S. Smart Speaker Revenue Projections

The smart speaker space driven by business users is anticipated to reach revenues of around $2.6 billion by 2023.

PROJECTED REVENUE

  • The US smart speaker market is expected to generate revenues worth $9 billion by 2023, "growing at a CAGR of approximately 21% during 2018-2023."
  • The 2018 smart speaker market in the United States is estimated at $3.47 billion— determined using the CAGR calculator, where the final value is ($9 million), rate (21%), and period (5).
  • The end-user segment is divided into residential/personal and commercial/business users, with the former's revenue leading the latter.
  • According to Computer World, the smart speaker space in the US is fast-moving, and "the sales figures are impressive but very little of the market’s growth is driven by business users."
  • The global smart speaker residential sector holds a market share of 82% of the overall market. Assuming that this rate also applies for global regions like the United States, then the residential sector's market share is 82% and the business sector in the country is 18%.
  • Therefore, the revenue for businesses driven by smart speaker usage is approximately $624.6 million (18%*3.47bn) in 2018.
  • Research and Markets predict that the commercial end-user segment will grow at a CAGR of about 33% during 2018-2023.
  • Hence, in 2023, the revenue for businesses driven by smart speaker usage will reach approximately $2.6 billion — calculated using the CAGR calculator, where the initial value is $624.6 million, the rate is 33%, and the number of periods is 5.

RESEARCH STRATEGY

The research team searched through industry databases and credible media sites including Transparency Market Research, Markets and Markets, Research and Markets, Market Watch, PR Newswire, and Hitech News Daily to discover the projected revenue for businesses driven by smart speaker usage. We understood the task to mean that we would be determining the market size in terms of revenues for the smart speaker space driven by business users. Unfortunately, the team did not find precompiled reports providing these statistics, but then managed to collect various metrics from the above databases that we used in triangulating the answer.
Sources
Sources

From Part 03
Quotes
  • "In Unit4's 2017 Enterprise Tech End-User Sentiment Survey, 38 percent of professionals affirmed that they use a digital assistant like Alexa for personal reasons; only 11 percent asserted to be using it in their professional lives."
  • "When that 38 percent was asked whether they would trust a digital assistant like Alexa for a work-related task, 54 percent of them said they would."
  • "Dimension Data's The Digital Workplace Report: Transforming Your Business indicates 62 percent of organizations expect virtual assistants to have a place in their companies within the next couple of years. In addition, 58 percent of organizations expect to start actively investing in technology that powers virtual advisors in the next two years. Amazon Alexa's business platform could significantly cut down on those investments."
Quotes
  • "Alternatively referred to as a virtual digital assistance, a digital assistant is a computer program designed to assist a user by answering questions and performing basic tasks."
  • "Smart speakers like the Amazon Echo and Google Home are also popular examples of a digital assistant. "
Quotes
  • "An Adobe survey says 91% of “business decision makers” are making significant investments in voice technologies"
  • "88% responded that they intend to support multiple voice assistants such as Amazon Alexa, Google Assistant, and Apple Siri"
  • "Adobe says 22% of businesses surveyed have launched a voice app and 44% plan to do so in 2019"
  • "The top three objectives for voice initiatives are all voice commerce related including purchases and order tracking"
Quotes
  • "Amazon revealed yesterday through a blog post by Ted Karczewski and a presentation at IFA (aka Europe’s CES) by Daniel Rausch, Amazon’s vice president of smart home, that there are now more than 50,000 Alexa skills worldwide. Both sources also reported that Alexa is now compatible with 20,000 devices and is used by more than 3,500 brands. That is up from 4,000 devices and 1,200 brands at the beginning of 2018. If you thought that Google’s recent surge in worldwide smart speaker sales was denting Alexa’s market momentum, you may need to rethink that position."
  • "As of August 30th, there were 66,410 combined skills listed in the U.S., U.K. and Germany. There were clearly many more when you add in Japan, India, Australia and Canada. However, many of the skills are duplicates, particularly for the U.S., U.K. and other English-speaking countries. "
Quotes
  • "As an entrepreneur, you know how crucial it is to get things done quickly. That’s where creating Alexa skills for your startup comes in handy. This service allows you to bring Alexa and its capabilities to your workplace. If implemented correctly, it can do wonders for many aspects of your startup or your clients ‘needs, from communication to management and event control."
Quotes
  • "Voicebot focuses on measuring the skill counts in specific countries. The U.S. provides the high water mark of the total number of skills an Alexa user can access. That number today is 30,006."
Quotes
  • "The smart speaker is also a chance for CPG brands, it seems, to interact with customers and potential customers. After all, many popular household brands, from Betty Crocker to LEGO, have developed skills or apps to communicate with customers and promote their products."
  • "Tide was the most commonly cited “branded” skill/app used by smart speaker owners. Six percent said they’ve interacted with the detergent brand through their devices, with Glad trash bags (5%), Campbell’s soup (2%), Quaker Oats (2%), and Ritz Crackers rounding out the top five."