RBC Analyst Says 52 Million Google Home Devices Sold to Date and Generating $3.4 Billion in 2018 Revenue
- An RBC analyst estimates Google has sold 52 million Google Home devices worldwide with 43 million in the U.S.
- Google Home devices are expected to generate $3.4 billion in 2018 revenue and contribute nearly $850 million to the company’s gross profit
- The RBC report also suggests annual revenue from Google Home devices is expected to double by 2020
CNBC is reporting that RBC analyst Mark Mahaney says consumers have purchased 43 million Google Home devices in the U.S. and another 9 million globally. In 2018 alone, Mahaney estimates that Google Home devices will generate $3.4 billion in revenue and contribute nearly $850 million to Google’s gross profit. The revenue only trails that of Pixel smartphones by about $33 million for the year though gross profit driven by the mobile devices is more than double that of the smart speakers.
An Installed U.S. User Base of Just Under 20 Million
Wading through Mahaney’s analysis, it appears he believes about two million Google Home devices were sold in its debut year of 2016 when it only was available for purchase for the months of November and December. In 2017, his analysis suggests about 15 million devices were sold and that number will rise to about 35 million this year. Keep in mind these numbers reflects devices sold and not users or households both which can, and often do, own multiple devices.
Voicebot’s Voice Assistant Consumer Adoption Report found that U.S. smart speaker owners typically have access to about 2.2 devices. Data from other analysts suggest that number is lower in other markets but is rising. In the U.S., the RBC analysis suggests an installed base of about 19.5 million Google Home users today. CNBC says that Mahaney concludes:
The real value of Google’s hardware is that it provides a platform for it to develop and deploy its artificial intelligence chops and gives it more ways to serve ads.
Google Home Revenue to Double
Mahaney also expects Google Home device revenue to more than double by 2020 when he forecasts sales of $7.5 billion. The model shows gross profit margins remaining constant at 25%. Breaking down the numbers further you can determine that his average selling price for a Google Home device is $97.25. That is clearly a blended average of devices ranging from the Google Home Max at a list price of $399 at the high end and Google Home Mini at $49. List prices for Google Home and the new Home Hub are $129 and $149 respectively. However, each of these devices sells on discount for under $100 and the Google Home Mini can be found for less than $25 during the holiday shopping season while Google Home Max is selling for $349.
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