“Smart speaker installed base to hit 100 million by end of 2018,” July 7, 2018, link.
This prediction focuses on smart speakers; the underlying voice assistant technology will also be integrated into smartphones, as well as a growing range of other devices, in 2019.
Smart speakers have, literally, a world of opportunity for growth. Much of that opportunity comes from expansion into non-English-speaking countries. In addition to wider language support, smart speakers are improving in speech recognition accuracy. For example, Google’s word error rate for English speech recognition has declined steadily from 8.5% in July 2016 to 4.9% in May 2017. 3
The complexity of smart speakers and the cost to build them are also declining, partly due to a reduction in the number of microphones required per device. As microphone technology improves, less power is consumed compared with earlier technologies. While most current smart speakers need to be plugged in, new microphone technology uses almost no power until the speaker is activated by the ‘wake word’. This new technology enables digital assistants to be more readily incorporated into battery-powered speakers.
“Google’s speech recognition technology now has a 4.9% word error rate,” VentureBeat, May 2017. link
2019 will likely be a strong year for smart speakers but what are their longer-term prospects? Potential demand for smart speakers could be in the many billions of units, possibly even higher than for smartphones. In some contexts, voice can be the most natural and productive way to communicate with a device. When one’s hands are occupied operating machinery, typing, holding an infant or cooking voice may be the most convenient option. Voice may also be the safest option while driving.4 As a result, smart speakers could end up be installed in every room in a house or a hotel, every office in a building, every classroom in a school, every bed in a hospital, every car or simply in every digital device.
Already several hotel chains have undertaken mass installations of smart speakers, whose applications include serving as in-room concierges. The Marriott International Group plans to intall Amazon’s and Alibaba’s smart speakers in some of its hotels, with 100,000 units deployed in China alone.5, 6 The Wynn Las Vegas has installed smart speakers in all 4,748 of its rooms.7 If this trend continues, many of the world’s estimated 187,500 hotels and 17.5 million guest rooms could feature smart speakers or voice control within the next decade.8
Drive-through restaurants could use voice automation to take orders. This would free up workers from having to process orders manually. Indeed, in many workplaces, including theatres, factories, chemical labs and restaurant kitchens, smart speakers may make operations safer and more precise than they are today. In the long term, the number of smart speakers in the workplace could exceed the number in homes, and the value of the tasks they do may be greater than just playing music, or listening to the weather forecast. Moreover, for the visually impaired, smart speakers can be an additional, more convenient way to access computing power. Smart speakers may also be the way in which illiterate people are able to access the Web.
Aftermarket dashboard-mounted smart speakers, such as Amazon’s Echo Auto, are available. See Sasha Lekach, “Amazon brings Alexa into the car with Echo Auto,” Mashable, September 2018. link
These will be deployed at Marriott, Westin Hotels & Resorts, St. Regis Hotels & Resorts, Aloft Hotels, and Autograph Collection Hotel.
“The rise of Chinese voice assistants and the race to commoditize smart speakers.” CB Insights, June 2018. link
“The Wynn Las Vegas is putting an Amazon Echo in every hotel room,” The Verge, December 2016. link
“How many hotels in the world are there anyway? Booking.com keeps adding them,” PhocusWire, March 2012. link
While consumer adoption of smart speakers remains low, businesses continue to invest in this market as they see the potential and want to learn how consumers use them. With sales of smartphones declining, virtual assistants and smart speakers have become the next battleground for technology companies not just in the home but also in businesses given the potential for multiple applications. Amazon has sold more than 100 million devices with Alexa inside, while Siri is actively used on more than 500 million iPhones and other Apple products. Google Assistant is now available on almost one billion devices, from smartphones to its home speakers.9 At stake is the vital data that smart speakers and virtual assistants collect which combined with artificial intelligence will help to identify ways to improve business efficiency as well as customer service.
Owning that ‘space’ between consumers and products or services can bring many strategic benefits for consumer businesses. The more data that is obtained about consumer interactions via smart speakers on a growing number of connected devices, the better able companies will be at learning and adapting their offering to serve their customers better. And, for the leading smart speaker manufacturers, controlling the user interface can become more important than the device on which it operates. This is because of the strategic value of licensing the platform to other device manufacturers while retaining access to the data generated by the devices using the interface.
Google is already making it easier for device manufacturers to integrate voice technology to their device through the use of ‘Google Assistant Connect’. The new tool allows manufacturers to connect their devices to a consumer's existing Google Home smart speakers, which will then handle communication with Google's cloud. The company is also working with Samsung and Sonos to allow Google Assistant Connect to control more devices around the home. Specifically, the artificial intelligence will be able to control music played through Sonos's WiFi-controlled speakers and change settings on Samsung smart TVs, for example turning them on and off, adjusting the volume or changing the channel.10
Over the next few years,consumer devices enabled with voice will be the next big thing. As a result, by 2022, more than 50% of premium white goods in developed markets will have a voice interface, up from less than 1% in 2018. By 2021, early adopter brands for white goods that extend their products to support voice will increase market share by 30%.11
BevMo an American speciality grocery retailer introduced a voice-powered smart virtual assistant in store to help shoppers decide between whiskey brands. BevMo's ‘talking shelf’ is a stand-alone display. Nearly 50 whiskey bottles sit on five shelves with an Amazon Echo smart speaker programmed to offer recommendations. BevMo appears to be the first chain of specialty grocery stores experimenting with such a feature. Once activated, Bev guides customers through questions about their whiskey preferences, such as type, taste profile and price. Three bottles, along with names and descriptions, then become illuminated on the shelf. Shoppers can ask about a specific bottle or brand. However, the technology has also confused some consumers who thought they could order the product from home using Alexa.
In their attempt to reinvent the store experience, retailers are offering different types of interactive technologies to improve how they engage with consumers, to better understand their needs better, as well as supplement staff product knowledge and provide an interactive experience that might attract foot traffic12.
“Battle for connected home seizes the stage at CES 2019, Financial Times, January 2019. link
https://9to5google.com/2019/01/08/google-assistant-connect-platform/, January 2019. link
Voice-Based Interfacing Will Be Essential for Consumer Product Success, Gartner, August 2018.
https://consumergoods.com/bevmo-tests-voice-enabled-shelf-shopping-assistant, Consumer Goods Technology, January 2019. link