Canalys’ Q2 smart speaker analysis, published this week, found that the global market grew 55.4% in Q2 2019, with 26.1 million units shipping worldwide. In the analysis, there are several key trends.
The US market is declining
Only slightly: with a 2.4% decline, both of the major players in the US market – Amazon and Google – are focussing on new territories, the report finds. Despite this softness, the US still saw 6.1 million units shipping. More than 50% of both companies’ smart speaker products are now going to markets outside the US.
Google, in particular, has felt the brunt of this softness, with an overall annual decline of 19.8%. Senior analyst Jason Low puts this down to a tough transition of its Home Hub smart display product to Nest branding.
“Google urgently requires a revamped non-display smart speaker portfolio to rekindle consumer interest, as well as a robust marketing strategy to build its Nest branding outside the US,” Low added.
Google, after all, hasn’t updated its core Google Home device line since it launched in 2016. It’s important to remember that Google is focussing on building out its offer as a platform for other hardware manufacturers to integrate its software.
Overall, the Chinese market doubled its shipments this quarter to 12.6 million units, more than double that of the US.
Despite having a presence in China only, for Baidu, that is more than enough. The search giant has seen vertiginous year-on-year growth for its smart speaker product of 3700%, taking it from a market share of 0.7% globally in Q2 2018 to a 17.3% share this year, shifting 4.3 million units this quarter.
In so doing, it has edged ahead of Google’s 16.7% global market share. Still, given the mutual exclusivity of both companies, Canalys plays down the significance of this shift.
“Aggressive marketing and go-to-market campaigns built strong momentum for Baidu in China”, notes Canalys research analyst Cynthia Chen, adding that its ability to up the mix of smart display shipments was particularly outstanding.
“Local network operators’ interests on the device category soared recently,” Chen continued. Baidu faces little competition in its home market, especially in the smart display category – a fact that should see it continue to dominate over Alibaba and Xiaomi’s smart speaker offerings.
These other Chinese companies are also strong, with Alibaba shipping 4.1 million units (market share: 15.8%) and Xiaomi shifting 2.8 million (market share: 10.8%).
The market is becoming more complex for consumers as manufacturers shift toward display integration in an attempt to capture more use cases. The issue of very low price points for the initial speaker-only offerings – such as the Amazon Echo and Google Home – could cause consumers headaches.
“Experimentation with different price points and value propositioning strategies are to be expected,” Low says. “However, uncovering new and unique use-cases with a strong focus on voice-first interface on smart displays should be the top priority for vendors”.
Sourced from Canalys, TechCrunch