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‘Started out, J.A.R.V.I.S. was just a natural language UI. Now … he runs more of the business than anyone besides Pepper,’ ― Tony Stark to Bruce Banner, better known as Iron Man and the Hulk.
We may have a long way to go before we can all have a virtual assistant as capable as Jarvis, but the world is in a hurry to get there. Alexa, Siri, Cortana and the others already sit in all of our pockets, but now they are taking their place in the middle of our homes as smart speakers continue to grow in popularity.
Smart speakers are now the fastest growing technology among consumers worldwide, helped by cheap entry barriers and the collaborative approach big tech has adopted with developers and other companies that are producing interconnecting products to help fuel ever-growing opportunity within the market. We may not have Jarvis yet, but one day we will.
It may seem pre-emptive to compare the more capable virtual assistants we are used to seeing in sci-fi with small, retro-fitted speakers that can play music, turn on the lights and read out the news, but big tech has big plans that fold into their wider artificial intelligence (AI) programmes and, with the possibilities being truly endless, will be looking to evolve their smart speakers and particularly their virtual assistants as quickly as possible.
What is a smart speaker?
In a nutshell, a speaker capable of anything beyond playing audio could be classed as a smart speaker. A smart speaker can also be called a voice-assisted speaker and generally refers to the likes of the Amazon Echo or Google Home.
While the array of smart speakers on the market do lean on different strengths and look to cater to different customers, the common characteristics remain the same. They are all wireless, the majority of them have an integrated virtual assistant which respond to user’s voice commands to complete tasks such as playing music or looking up when your next train leaves. Some have introduced screens, seeking the best of both worlds by combining visual and audio to assist its customers.
Interconnectivity is very important for smart speakers, and their ability to interact with other digital applications and hardware is integral. They are not magic. The speaker must have access to a music service to play songs that the user requests and a user must ensure they have compatible lightbulbs installed if they wish to control them using the speaker, for example.
Smart speakers have the potential to digitise the control of everything and become a sort of ultimate remote control for our homes. We already have miniature versions in our pockets as we continue to find new and innovative ways to use smartphones in our lives, and smart speakers will be a rather large extension of that.
Smart speakers are proving to be the fastest-growing consumer tech
‘2018 will be the defining year for smart speaker adoption. Smart speaker uptake has grown faster than any other consumer technology we’ve recently encountered, such as augmented reality, virtual reality or even wearables,’ – Canalys research analyst Lucio Chen.
Smart speaker sales are forecast to jump 70% in 2018, to over 56 million units from the estimated 33 million sold last year, according to technology market analyst firm Canalys. Amazon is the biggest player, and is thought to control about two-thirds of the market, followed by Alphabet's Google at about 27%. However, the pair are set to face more competition as new rivals emerge.
The US is by far the biggest market for smart speakers. Almost seven out of every ten smart speakers will be sold in the US this year, according to forecasts. Although sales will continue to surge in 2018, Amazon and Google will be increasingly focused on reaping the reward from the existing speakers out in the market, following the rapid adoption of the technology last year, by paying more attention to software.
Canalys states the possibilities for these companies to begin monetising smart speakers ‘are endless’, and include discreet advertising, content subscription bundles, premium services or enterprise solutions.
Amazon, Google and its peers will continue to grow sales elsewhere such as in the European Union (EU), but will struggle to break into the likes of China, where equivalent players like Alibaba, Baidu, and Xiaomi are likely to dominate. While China is the second biggest market for smart speakers behind the US, the amount it trails its western counterpart presents a chasm – Americans bought almost ten times as many smart speakers than the Chinese last year.
Virtual assistants give big tech an edge in smart speaker market
The number of companies producing smart speakers will grow as the market moves to mass-adoption, but big tech has already locked in its edge. Amazon, Google, Apple, Microsoft and Samsung boast the best-known virtual assistants, and any speaker manufacturer that doesn’t have its own assistant therefore has to look at integrating one of the assistants developed by big tech.
This has led to collaboration between those with expertise in the audio and speaker market, and those who have developed virtual assistants. For example, Panasonic's smart speaker utilises Google Assistant, whilst Sonos has installed Amazon’s Alexa.
Companies are trying to leverage their strengths to differentiate their speaker in what could become a fairly crowded market. The likes of Sony, JBL, and Sonos are all leaning on premium audio quality and focusing on the music aspect of smart speakers. Currently, the two main reasons people are purchasing smart speakers are to listen to music or for the ability to ask questions.
What smart speakers and virtual assistants are there to choose from?
There is already a diverse range of smart speakers available on the market. Notably, Apple has only just released the HomePod and Samsung, while it already offers ‘smart speakers’, is not expected to release a Bixby-powered equivalent one until later this year. Microsoft’s flagship speaker has been made by a third party.