Smart Speaker Sales to Rise 35% Globally in 2019 to 92 Million Units, 15 Million in China, Growth Slows

SAR Insight has a new report that forecasts global worldwide smart speaker shipments will by 92 million in 2019, up 35% from 2018. Over a three year period since 2016, that reflects a 92.4% compound annual growth rate (CAGR). Smart speaker sales in China will represent 16.3% of unit sales volume in 2019, up from 14.1% in 2018.

While the installed base figures in the chart above and CAGR show rapid global growth in device adoption, SAR’s current forecast anticipated a substantial slowdown in 2019 sales growth. The 2017 growth rate exceeded 150% according the company’s models and 2018 followed with more than 100% growth. The 35% growth in 2019 reflects more smart speaker unit sales than any previous year, but it is off of a larger installed base and the growth rate is one-third of 2018. Asked about the slowdown in growth, Dennis Goldenson, director of artificial intelligence and machine learning for SAR Insight commented:

“While we anticipate double-digit growth over the next five years, smart speaker growth will begin to flatten and decline as other voice-enabled connected devices begin to emerge.  These embedded voice devices may offset some of the growth curve that was anticipated within the speaker space over the full ten year period.”

The key takeaway is that smart speaker sales will continue to grow quickly but unit volume will be suppressed due to the substitute effect of voice assistant access coming to other appliances. Consumers will still want more voice assistant access in the home, but they will increasingly get that from devices other than smart speakers.

China Smart Speaker Growth Slightly Higher Than Global Trend

Total smart speaker sales in China are expected to approach 15 million units in 2019 reflecting 36.7% growth over 2018. The three-year CAGR for the China market is 98.7%. While China is growing quickly in smart speaker adoption it is only slightly outpacing worldwide unit sales. China has a large population but smart home penetration will reach only 31 million homes in 2019 according to Statista. Only about 60% of Chinese consumers had internet access at the close of 2018 and many of those do not have Wi-Fi at home, a requirement for today’s smart speakers. As a result, the addressable market for smart speaker sales in the country is far lower than is often expected.

The more rapid growth of voice assistant use is likely to be driven by smartphone use. WeChat’s forthcoming Xiaowei assistant embedded in mobile apps is likely to acquire a large user base quickly if I can match the feature breadth of Baidu’s DuerOS and Alibaba’s Tmall Genie. Baidu offers another example of voice assistant proliferation off the smart speaker. The company has sold several million smart speakers, and in Q2 Canalys says it was the sales market share leader, but DuerOS is available today through more than 400 million devices. Its smart speaker distribution is less than 5% of DuerOS’s total availability.

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