Smart speakers continue to sell like hotcakes and create ripples of excitement among smart home enthusiasts. This is not only good news for smart speaker manufacturers but also for manufacturers of other smart home categories, because owners of smart speakers are more likely to purchase other smart home devices such as smart thermostats and locks. Smart speakers are playing a dual role: making consumers’ daily lives easier through virtual assistant capabilities and acting as a hub for a smart home ecosystem, making it an attractive option to many consumers. In our new report, “Forrester Analytics: Smart Home Devices Forecast, 2018 To 2023 (US),” we forecast that 134.8 million new smart speakers will be installed in the US in the next five years. This huge demand for smart speakers is driven by:
- A cheaper price. Smart speakers are available in the US from $49.99 onward. This is the reason for rapid adoption of smart speakers in the US, where many households own more than one smart speaker. Forrester estimates that 23% of US households will have smart speakers in 2018.
- Integrated skills. Skills, or what a smart speaker can do, are critical in making smart speakers more robust and useful to consumers. Amazon and Google are increasingly focusing on acquiring skills. Amazon shared in early 2019 that the number of voice applications built for Alexa had reached 80,000 worldwide, up from the 70,000 skills in December of 2018.
- Voice/virtual assistant capabilities. Voice assistant functionality has already been available in consumers’ smartphones for a while, but it’s smart speakers that brought most of the recognition and purpose of this capability — and it will give smart speakers the edge over other consumer technology products.
As smart speakers have made voice-supported technology mainstream, other smart home categories can’t risk being left behind. Some manufacturers have started using built-in microphones and speakers to let consumers directly control the technology, rather than relying on smart speakers as an intermediary. We expect smart home categories such as smart lights, smart thermostats, and smart home security to grow significantly by improving ease of use, supported by voice-controlled service that’s enabled due to built-in virtual assistants like Alexa and Google Assistant. This is further supported by the fact that Amazon had sold 100 million Alexa devices by the end of 2018.