A Foolish Take: Amazon Will Dominate the Smart Speaker Market This Year
When Amazon (NASDAQ: AMZN) introduced the Echo smart speaker late in 2014, some critics called it an unnecessary device. But the Echo actually expanded the company's e-commerce ecosystem into homes, making it easier to order products from Amazon, use its streaming services, and control other connected devices.
Amazon's first-mover advantage has given it an edge against Alphabet, Apple, and Microsoft -- which have all introduced their own smart speakers. Research firm eMarketer estimates that this year, 35.6 million Americans will use a voice-activated assistant device at least once per month -- a 129% increase from last year -- and believes that Amazon will control 70.6% of the smart speaker market. (This forecast predates the announcement of the HomePod, which won’t be released until December of this year.)
The Echo's success has spawned a family of devices, including the puck-sized Echo Dot, which requires an external speaker; the Tap, which is activated by a button; the Echo Look, which adds a camera for selfies and fashion recommendations; and the Echo Show, which adds an LCD screen for video calls. And Amazon could sell many more Echo speakers in the future: Global Market Insights expects worldwide smart speaker revenue to soar from $400 million in 2016 to $13 billion in 2024.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Leo Sun owns shares of Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool has a disclosure policy.
