AI and Digital Assistants to Surge in 2018

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As they become more ubiquitous in homes and in various consumer electronics products, artificial intelligence (AI) and digital assistants are likely to be two of the major overarching themes at next week’s 2018 Consumer Electronics Show (CES). Accelerating growth in both of these markets underscores their surging role in the overall consumer electronics landscape. More than 5 billion consumer devices supporting digital assistants will be in use in 2018, with almost 3 billion more added by 2021, according to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

Despite this growth, there are still some hurdles to overcome, before consumer adoption is widespread. “Amazon has a clear lead over rivals Google, Apple and Samsung, in terms of the numbers of skills and third-party apps and services supported by its Echo products, but more needs to be done by all platforms, to help users discover new skills and uses for the technology,” said Jack Kent, director, operators and mobile media, IHS Markit. “Major technology companies continue to make investments and acquire companies that increase AI expertise. Apple has been the most acquisitive to date, but Google has been the most active investor in third-party AI-centric companies.”

Following are more key points to bear in mind about AI and digital assistants, as leading technology companies converge on Las Vegas for next week’s conference:

Smart home security

Video surveillance will continue to be a critical component of the smart home in 2018, with video cameras and video doorbells representing nearly 20% of devices shipped into the smart home globally this year. As such, video surveillance will become even more intelligent, by pairing noise classifications, voice and facial recognition, and allowing consumers to filter what is most important in their daily lives. Moreover, there will be more all-in-one devices launched in 2018, which will combine smart speakers, video cameras and hubs connecting all devices in the home.

“As smart home players look to differentiate themselves and grow market share, smart home products will achieve more proprietary expansions through acquisition and in-house research and development,” said Blake Kozak, principal analyst, smart home and security, IHS Markit, “These deals will likely enhance the opportunities for AI and home automation. For example, although Amazon and Google will continue to ramp up partnerships, Amazon will direct its focus on developing equipment in-house, while Google will revamp relations with Nest.”

Smart speakers

With heavyweights Google and Amazon aggressively ramping up competition in the space, smart speakers have risen in prominence over the last year, as both standalone products and voice-based interfaces to the smart home. In fact, 39 million smart speakers are forecast to be shipped globally in 2018, up sharply from 27 million units shipped in 2017

“The smart speaker surge is only just beginning,” said Paul Erickson, senior analyst at IHS Markit. “2018 is the year competition in this market truly begins – and the year true mainstream adoption accelerates. We expect numerous third-party smart speakers built around one or more digital assistants, so consumers will have more choices, when it comes to price, form factors, style, and audio quality.”

Smart appliances

“The integration of voice-assistant technology will soon move beyond major white-goods home appliances, to small appliances and personal- and hygiene-care appliances,” said Dinesh Kithany, principal analyst, smart home and appliances, IHS Markit. “We even expect some appliance makers to embed microphones in their premium appliances, complementing smart speakers in digital assistants within the smart home,” Kithany said. “How these companies might choose to use the data generated out of this user experience will be an interesting development to watch.”

About IHS Markit

IHS Markit is a world leader in critical information, analytics and expertise for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world's leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.