Growth of Smart Speakers & IoT a ‘Frenzy,’ Says New Reports

Photo of Google Home device

Two new research reports from two different research groups came to basically the same conclusion – smart speakers (and IoT devices) show no signs of slowing down with eye-popping growth rates in just the last two years. One of the researchers, Comscore, is calling the trend, “The Smart Speaker Frenzy.”

See the latest smart speaker & IoT data…

Two new reports, one from Comscore and the other a joint venture of NPR and Edison Research, laid bare the continued growing dominance of the smart speaker category. And both reports held some surprises surrounding the use of these devices…some of which is not necessarily good for the creators of the category. Let’s first talk about the latest Comscore data…

In a blog post on their website, Comscore teased out the data, drawing some interesting conclusions as a result. The researcher noted that “device manufacturers” are “in a frenzy over smart speakers.” But it posed a question as to whether consumers feel the same way. The answer to that rhetorical question was in their charts.

American Homes are ‘Going Virtual’ & IoT is the Driver

There is a real technology trend to homes “going virtual” Comscore analysts said. And, they note, smart speakers and other IoT devices are the big drivers.

In a chart showing selected consumer technology products, we see both the size of the various categories in 2017 and in 2019. By looking at the difference of each category of product between the two years, you can clearly see the growth rate of each category.

Smart speakers and IoT devices are showing surprising growth in two years
Although smart speakers and other IoT (Internet of Things) devices are still smaller in share of the home, they are growing much more rapidly than more traditional digital devices [Click to enlarge]

And what’s happening is that more traditional consumer products, such as phones, desktop computers, and tablets all have much greater market share than smart speakers, with the phone showing 90% in 2017 and 89% in 2019. But each of these three major categories showed measurable declines between the two year period.

Other digital consumer products, such as streaming stick/box, connected TV and gaming console are growing, but are both smaller categories…and both showed relatively modest rates of growth. On the right-hand side of the chart, we see a highlighted box with the IoT categories – including smart speaker, smart watch, and smart thermostat.

Consumers Have 9.2 Connected Devices in Their Homes

These IoT categories are much smaller in the overall consumer market adoption, but are growing dramatically in just two years. Smart speakers jumped from 12% in 2017 to 29% just two years later. That is huge growth…and even the smallest category – thermostats – doubled in those same two years from 3% to 6%.

Comscore’s research says that consumers have on average 9.2 connected devices in their homes. Of this number, audio devices were the most prevalent category…that is, most prevalent after mobile, connected TV and computers/laptops. Still, audio remains an important player in the typical American home.

Chart of usage by time of day showing they are used mostly in the morning
The orange trace is tracking smart speaker use by time of day. The activity clearly takes a major bump up in the morning, but is other wise fairly consistent throughout the day. Note how the phone and streaming box categories take a big jump after 5:00pm [Click to enlarge]

Comscore’s report also has identified a trend that smart speakers are used mostly during the morning hours according to their data tracking. Yet other devices, such as phones and streaming sticks/boxes, tend to see their greatest usage spike after work hours of 5-10pm. And this trend is even more pronounced during the weekend.

This chart shows usage of smart speakers on the weekend as opposed to week days
During the weekend, the morning bump in smart speaker usage is even more pronounced as you can see in the solid trace above [Click to enlarge]

Voice Commands of Users are NOT What Makers Want

The final analysis in the Comscore blog is interesting – noting that the voice commands users are mostly using, are not really what manufacturers had hoped for. Most users who employ voice to interact with their smart speakers are using general, non-purchase connected commands.

This chart shows the types of voice commands used by smart speaker pemrtd
The vast majority of voice commands from users are for things other than shopping with “General Questions” being asked by more than half of users [Click to enlarge]

These include asking about the weather or other general questions about traffic, sports, and setting timers and alarms. Only a small minority of users are using them for purchasing-related purposes.

The Smart Audio Report

Also chronicling the rise of the smart speaker, NPR and Edison Research in their Smart Audio Report note that one out of every four U.S. adults – or about 60 million Americans – owns a smart speaker now. Overall awareness of the category has grown from 62% of Americans in January 2017…to an impressive 84% by December 2019.

smart speaker growth from less than 1-in-10 to nearly 1-in-4
Explosive growth in smart speakers market share: from well under 1-in-10 ownership (7%) in 2017, to 1-in-4 ownership (24%) just two years later. [Click to enlarge]

Not only that, but the typical U.S. household has more than one smart speaker in the home – 2.6 to be exact. This is up substantially from the 1.7 per home in 2017. The researchers say that there are now a total of 157 million smart speakers in the market…up dramatically from 67 million in 2017. That’s an increase of over 134% in just 24 months.

Overall growth in installed base of smart speakers - up 135% in just two years
I have to say explosive growth again, this time in number of smart speakers in the market, up 135% in just two years…remarkable. [Click to enlarge]

When respondents were asked how often they use their smart speakers, the largest group said ‘Several times a day’ (33%), followed those who said they use theirs ‘Nearly every day’ (27%). After this number, respondents said ‘At least once per week’ (21%), ‘Never’ (11%), and finally ‘Once per month’ (8%). I find it interesting that more than 10% of smart speaker owners…never use them. What is THAT all about???

A pie chart of smart speaker usage showing 33% use them every day and 11% never use them
Impressive: 1/3rd of respondents use their smart speaker every day; Equally impressive: more than 10% of smart speaker owners ‘Never’ use them [Click to enlarge]

Interesting Voice Command Data Here Too

The NPR/Edison Research team also uncovered an interesting behavior associated with smart speakers owners’ use of voice commands. According to their results, a majority of users (54%) have tried interacting with their speaker by voice – or as the researchers “have ever used voice commands.”

But what is perhaps more interesting is that less than a quarter of all smart speaker users who say they use voice commands (24%), use them every day.

What Does This All Mean?

Both of these new studies make clear that smart speakers are popular with consumers. Yet both also seem to show that consumers have chosen to use the devices for activities other than for those that they were intended.

Amazon developed the Echo and its siblings as a way to facilitate friction-free commerce on a mass one-on-one scale in American homes. In order for those individual orders to add up to a meaningful number for the company – it needed to get them into millions of homes.

Consequently, to drive adoption, Amazon regularly discounts their various Alexa devices heavily. On that front, they’ve been quite successful and millions of homes have multiples of the devices.

However, in a twist of irony, users are not shouting orders at Alexa to purchase anything…at least not on a meaningful scale.

Oh those fickle consumers!

About Ted

A sales and marketing specialist - primarily in the technology industry - I've experienced a sort of "circle of life" in business. I've been a mass merchant retailer, a specialty retailer, a specialty manufacturer, a large volume manufacturer, a distributor, and even represented sales representatives. Now the owner of a marketing company that works with a variety of businesses on improving their strategic marketing and business development - I analyze issues from all angles to develop holistic solutions.

Comments

Growth of Smart Speakers & IoT a ‘Frenzy,’ Says New Reports — 1 Comment

  1. It seems that voice shopping is an inferior way to shop vs on a PC, tablet or phone where it facilitates comparison shopping along with visual information so people can research and be more confident to buy. Voice shopping seems to make the shopper “trust” the service and recommend what to buy. They might be better off creating virtual AI shopping experts you can choose to consult who will recommend rather than a generic AI such as Alexa or Google, that will make a biased recommendation. Perhaps you ask Martha Stewart for a cooking item or a product, kind of like a personal expert shopper. I find it handy for controlling lights around and is used frequently in the evening. Morning is for weather and a bit of news.

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