Voice assistants like Amazon's Alexa and Google's Assistant will be a key element driving the growth of the smart home ecosystem over the coming five years. Juniper Research estimates that voice assistants used to control smart homes will grow from 25 million today to 275 million in 2023: a 1,000 per cent rise.
The use of voice assistants to control smart homes has risen dramatically, from a niche use case to many users' preference. Aiding this, all vendors have focused on making them easy to integrate with existing systems, through products like Apple's HomeKit and Google Home.
While both Amazon and Google have a stake in the market, Amazon is the clear leader. Its loss-leading strategy with Alexa, which is combined with a ‘comprehensive' product and service ecosystem, has led to early dominance of the home market.
Google is forecast to remain ‘a distant second', following the $621 million loss reported by the company's Nest brand last year. Although Google boasts a large total addressable market (all Android users) and impressive artificial intelligence credentials, especially when it comes to services like Duplex, it is held back by a comparatively poor ecosystem.
Third place goes to Apple with Siri, an established feature of iOS that is common to many users, and the original ‘modern' voice assistant. However, Apple was a late entrant to the smart home space, launching its AirPods in 2016 and HomePod in 2017. These lack features compared to Amazon and Google's offerings, and also lack device support.
Juniper expects the introduction of a set of monetised Alexa skills to convince smaller vendors to adopt an ‘Amazon-first' approach.
Smart homes rely on both services (Netflix, Hulu, Philips Hue) and physical products (dishwashers, washing machines, vehicles). The integration between connected appliances and voice assistants - called ‘crucial' to position connected appliances as the centre of the smart home - is expected to increase.
Thanks to this deeper integration, Juniper predicts that connected appliance shipments will rise 80 per cent per year, on average, over the forecast period. Aiding this, the cost of these devices will also fall more than 50 per cent between 2018 and 2023, to about $280 globally.
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