Canalys China Smart Speaker Growth 2019 – April – FI -2

China Smart Speaker Adoption to Grow 166% in 2019, Alibaba to Maintain Market Share Lead

Smart speaker adoption in China will rise 166% in 2019 to an installed base of 59.9 million according to a new forecast from Canalys. At the end of 2018, Canalys estimates there were 22.5 million smart speaker users in China. China’s growth rate topped all countries tracked by Canalys that have had smart speakers available for more than a year. South Korea and Japan are expected to have the next highest growth rates at 132% and 131% respectively. It will be a big year for smart speaker expansion along the Pacific Rim.

Alibaba to Maintain Smart Speaker Market Share Lead

Alibaba commanded about 40% smart speaker market share in China at the end of 2018 according to data sets from both Canalys and Strategy Analytics. That market share is expected to remain intact in 2019 based on Canalys’ forecast of 39% for Alibaba devices. Xiaomi’s Mi AI devices are expected to have 25% share and Baidu’s DuerOS will be 24% with other devices at 12%. In North America and Europe, we are seeing a smart speaker duopoly comprised of Amazon and Google today with 10-15% of share controlled by other device makers. It appears that China will continue to have three dominant smart speaker makers in China while also settling in at 10-15% for smart speakers from other manufacturers.

Apple HomePod is a notable recent market entry in China. It represents the first smart speaker sold in both China and Western countries. With Baidu abandoning the premium smart speaker category when it shut down Raven H production, HomePod may face little competition for audiophiles looking to adopt their first smart speaker. The key question will be what portion of the 12% “other” smart speaker category can be captured by the Cupertino giant.

China’s Smart Speaker Adoption Similar to Other Countries with a Caveat

Canalys also pointed out that there are only 470 million homes in China with fixed broadband subscriptions. Considering that constraint, smart speaker ownership this year is expected to reach 13% of broadband homes in the country. That is in line with smart speaker adoption after two years in Western countries when comparing penetration to broadband household availability.

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