Connected speakers – confined listeners have a new radio set
The decline in the number of FM radios in North American homes is not the end of the line for editors and advertisers. The health crisis we are going through proves that connected speakers have become the leading radio receiver of the moment (source: Katz Digital). The story of a formidable ascent.
Science fiction fans will remember HAL, the virtual assistant – humanised and self-aware – from the film “2001: A Space Odyssey”. While reality has not yet caught up with fiction, recent advances in smart speakers and personal assistants are already enabling practical interaction and facilitating the delivery of digital audio content into homes where radios are becoming increasingly rare.
The two most popular brands in the Western smart speaker market are Amazon (Echo, Alexa) and Google Nest Home (Google Assistant). Apple, whose HomePod made its debut in early 2018, continues to lag behind its competitors, having adopted a tighter niche strategy.
Sales: steady growth since 2016
The market for smart speakers is growing faster than the market for other smart home appliances, proving that consumers are now confident in technology they find natural to adopt. Last year, it was estimated that 35% of U.S. households already had at least one smart speaker. This will be 75% by 2025.
A Loup Ventures study gives you an idea: last year, the voice activation market reached $15 billion and is set to rise to $19.6 billion in 2020. Connected speakers, which now integrate voice command functions, are on the increase, and the figures speak for themselves.
The growth in the sales of smart speakers worldwide is staggering – 9 million units in 2016, 136.9 million this year and no less than 409.4 million by 2025.
The importance of the price factor
Price seems to still be the key factor in the decision to purchase a connected speaker. 79% of smart speaker owners then say they are satisfied with their device. 59% rate their experience with smart speakers as “excellent”.
Decyphering: consumers find the technology useful in many aspects of their daily lives. Products such as Google Home answer questions correctly in 94% of cases, while the HomePod (Apple) is successful in 85% of cases.
Who are the stakeholders in voice activation?
According to the latest study (Q3 2019) by Strategy Analytics, Amazon still largely dominates the voice-activated speaker market, with 30%, ahead of Google (17%), Baidu (12.2%), Alibaba (11.2%), Xiaomi (9.6%) and Apple (5.1)%. Manufacturers, often technology-independent, including Harman Kardon/JBL, Sonos, Bluesound, Bose and Sony, together represent 14.9%.
How are connected speakers used?
At present, there are 6 main control and function categories that connected speakers are typically used for across the world (source: “Smart Speaker Owners”, Voicebot.ai, April 2019), based on everyday habits:
- Asking a question : 36.9 %
- Listening to music via a streaming service: 38.2% (monthly basis: 69.9%)
- Checking the weather: 35.6%
- Setting an alarm: 23.5%
- Setting a timer: 22.9%
- Listening to the radio: 21% (monthly basis: 40.5%)
So, what about digital audio? Streaming music is the second most common activity: 38.2% listen to music every day, 84% have at least tried it and 69.9% listen once a week. Listening to the radio comes in 6th position: 21.2% daily, 40.5% weekly. In 10th position are news and sports, with a proportion of 13.4% on a daily basis and 28.8% on a weekly basis. Finally, podcasting is currently in 14th place: 11.1% daily and 26.5% weekly.
Where is the connected speaker?
A study conducted by Edison Research in the USA in collaboration with public radio station NPR is a perfect illustration of the way the connected speaker is replacing the radio. It shows that 52% are located in the living room, 24% in the kitchen, 12% in the master bedroom and just 4% in the office.
To the detriment of smartphones?
This is the finding of a Localytics/Qualtrics study conducted in the USA on the impact of the use of smart home devices on the use of smartphones. 58% of respondents said that their voice-activated speakers have already replaced their smartphone when it comes to listening to music and digital radio.
Which countries have the highest penetration rate?
Against all expectations, India dominates the market, according to the findings of the latest IHS Markit report, with 20.9%, ahead of the United States (20.7%), then the United Kingdom (18.3%) and Germany (12.7%).
The case of the last country is interesting. Indeed, Germany has fallen seriously behind the United States in this regard. The country is estimated to be 4 years behind, according to the first major Infinite Dial study by Edison Research, published in Germany in October 2019 with the support of the Bertelsmann/RTL group.
For 70% of Germans, “good old radio” is still the primary source of information, music and entertainment. Today, 8% of Germans have a connected speaker. However, the backlog seems to be shrinking rapidly, especially among 16-34 year olds. There is now a clear preference for mobile applications and radio-connected speakers among this age group. 38% of them no longer own a radio receiver and, as an encouraging sign, 35% listen to podcasts.
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