Smart Speakers Market to Hit $39.3 Billion by 2025

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The global smart speakers market size is expected to reach $39.3 billion by 2025 at a 38.7% CAGR over the forecast period, according to a study conducted by Grand View Research, Inc. The ability of a smart speaker to function as a centralized hub that can adequately control other smart home devices is expected to increase their popularity among consumers.

The market is anticipated to witness significant growth over the forecast period owing to various technological advancements. One of the recent technological advancements is Echo Look, launched by Amazon in June 2018. Echo Look is integrated with a camera and programmed to function as a fashion advisor by capturing user’s images. Similarly, in March 2017, Google announced its strategy to incorporate smart displays in their speakers. The Google Assistant Smart Displays can be used to watch recipes, refer to Google maps, and shop online with the visual aid of a screen.

Furthermore, increasing penetration of broadband services, coupled with growing integration of AI technologies, is anticipated to bolster the smart speakers market over the forecast years. Another key factor driving the market is price differentiation. Various smart speaker providers offer their products at varied costs to maintain consumer preferences toward their products.  Additionally, smart speakers are expected to be the fastest-growing products among other smart devices included in the consumer electronics portfolio.

Despite growing consumer interest in smart speakers, data security and privacy continue to be primary concerns. These devices gather personal information pertaining to contact details, bank account number, and login credentials from Google Home, which has access to Gmail where users store their personal details. These security concerns may hinder market growth. However, with development of security compliances, the market is expected to overcome this challenge and exhibit an upward growth trend.

Further key findings from the study suggest:

• Amazon Alexa dominated the market in 2017 and is expected to register a CAGR of more than 19.0% over the forecast years. This growth is ascribed to its massive popularity among consumers and its advanced features such as machine learning and semi-supervised learning techniques
• Several emerging players are entering into collaborations with existing participants to enhance their market presence. For instance, in July 2018, Pioneer Electronics announced its partnership with Amazon, Inc. to introduce Elite Smart Speaker F4 (VA-FW40) enabled with Amazon Alexa voice assistant. Pioneer Electronics is engaged in providing home entertainment products
• The smart speakers market is marked by presence of industry participants such as Apple, Inc.; Amazon; Google; and Xiaomi. These players incorporate effective strategies to maintain their presence and gain popularity among users. For instance, after Amazon introduced its smart speaker in U.S., Xiaomi, Chinese electronics giant, introduced its smart speakers and is currently one of the pioneers in the consumer electronics market. The company holds more than 5% share in the smart speakers market.