Smart speakers are easily among the most exciting and fastest-growing product categories in consumer electronics, with tech giants continuing to expand their lineups to cover a growing array of price points, use cases, and form factors. Market leader Amazon.com (NASDAQ: AMZN) announced a stunning number of Echo gadgets in September, and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google added the Home Hub to its mix the following month. Last year also marked Apple's (NASDAQ: AAPL) first foray into smart speakers with the HomePod, although sales have been lackluster.
NPR and Edison Research had released a report with estimates a year ago, and the duo has just put out a new version. Let's see how things have changed over the past 12 months.
Second-generation Echo Show. Image source: Amazon.
Household adoption skyrocketed 78% in 2018
An estimated 21% of U.S. adults now own a smart speaker, or roughly 53 million people. That's up from 16% ownership, or 39 million smart speaker owners in the U.S. a year ago. Perhaps more impressive is the massive 78% increase in the number of U.S. households that now own a smart speaker. Approximately 118.5 million households now have a smart speaker, up from 66.7 million.
Consumers that own a smart speaker continue buying more to place throughout their homes. The proportion of people that only have a single smart speaker has declined dramatically. The subset of consumers that own three or more smart speakers jumped notably.
Number of Smart Speakers Owned
Three or more
Data source: NPR and Edison Research.
The average household now owns 2.3 devices, according to the report, up from 1.7 devices a year ago. Smart speakers were a popular gift over the holidays, with 8% of respondents (n = 1,002) saying they received one. That's comparable to the 7% of respondents that said they received a smart speaker as a holiday gift last time around.
In terms of bad news, 69% of respondents said they were not interested in buying another smart speaker within the next six months. Only 30% said they were somewhat or very likely to buy another device within that time frame. That relatively low level of purchase intent isn't great, but we're heading out of the holiday shopping season and consumer confidence just posted its biggest drop in three and a half years amid concerns about a global macroeconomic slowdown.
Engagement remains strong, with 52% of respondents saying they use their smart speakers on a daily basis. Nearly a third of people use them several times a day.
"The growth in ownership, particularly the increase in devices per household, really speaks to the tremendous utility of voice assistant technology," Edison Research's Tom Webster said in a statement. "While these devices initially served as audio appliances, they are now becoming integrated into the fabric of everyday life for tens of millions of Americans."
What this means for tech giants
With just over a fifth of U.S. adults owning smart speakers and the market still in the early innings of the overall adoption curve, there's still considerable opportunity for tech giants.
Amazon is expanding its presence in the home with new form factors. In fact, last year's report showed many consumers were interested in bringing smart speaker technology into their cars, a demand that the e-commerce behemoth is addressing with the new Echo Auto. Google has notched some notable wins, such as its Home Mini being the best-selling smart speaker in the second quarter of 2018. Apple recognizes that it is far behind, but is making Apple Music available on Alexa devices in an effort to grow its services business beyond its own hardware.
After a strong showing in 2018, let's see how the smart speaker market fares in 2019.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- 3 Stocks That Are Absurdly Cheap Right Now
- 5 Warren Buffett Principles to Remember in a Volatile Stock Market
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- The Must-Read Trump Quote on Social Security
- 10 Reasons Why I'm Selling All of My Apple Stock
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Amazon and Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.