Retail Dive, 1/3/19
Alexa may help Amazon generate up to $19 billion in total revenue by 2021 via smart speaker device sales, voice-driven shopping and other revenue sources. That still will represent just a small portion of Amazon’s total revenue, but in any case, the key to Amazon’s ongoing dominance of this market is that it offers the widest variety of smart speaker devices and the broadest ecosystem of apps and partners.
At the beginning of 2018, it looked like Google might have a breakout year for sales of its Google Home smart speaker device, and according to RBC’s numbers, Google did reap around $3.4 billion in revenue from sales of its Home devices last year.
There are now about 43 million Google Home devices in the U.S., RBC estimated. Google could sell more than $6.6 billion worth of Home devices this year, but even as that market for smart speakers is growing like crazy, Google still appears to have a long way to go to catch Amazon. Apple’s HomePod has even further to go just to become a factor in this market. HomePod was criticized for its overall design, lack of capabilities and initial $350 price tag, and to date has claimed only about 5% share of the smart speaker market, according to RBC.
The current state of affairs in the smart speaker market appears to set Amazon up well to win the evolving voice commerce battle, although to date not many smart speaker owners are actively shopping and purchasing through their devices. Another recent bit of research from eMarketer suggested voice commerce would total around $2.1 billion for 2018, well under 1% of all retail sales. Smart speakers represent an explosive new market opportunity for the technology companies that are selling these devices, but even as more are showing up in consumer homes, they do not yet represent much of a sales channel for retailers.