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The global smart speaker market is on the upswing, according to Canalys, which today released shipment estimates for the most recent fiscal quarter. The firm reports the segment grew 44% to reach 28.6 million units in Q3 2019, coinciding with substantial growth in the smart display category.
Amazon shipped 10.4 million smart speakers in Q3 2019 for a 36.6% share of the market this quarter, up from 6.3 million units in Q3 2018 (a 31.9% share). That put it well ahead of rival Google, which managed to get 3.5 million devices out the door this quarter (for a 12.3% share) versus 5.9 million units in Q3 2018 (29.8%).
As for Baidu and Alibaba, the latter notched 3.9 million units shipped in Q3 2019 (for a 13.6% share of the smart speaker market), up from 2.2 million in Q3 2018 (11.1%), while Baidu sold through to consumers 3.7 million units in Q3 2019 (for a 13.1% share), up from 1 million units in Q3 2018 (4.9%). (Last quarter, Baidu topped both Google and Alibaba by total global shipments.) Xiaomi was a distant fifth this quarter, with 3.4 million devices shipped (for a 12% share), compared with 1.9 million devices in Q3 2018 (9.7%).
Above: Smart speaker shipments for Q3 2019 by vendor.
Canalys senior analyst Jason Low attributed Amazon’s strong showing to its recently introduced Echo Upgrade Program, which lets users trade in old Echo or non-Echo Bluetooth speakers for newer models at a discounted price. He added that Alibaba’s Tmall Genie devices likely performed well partly because of Alibaba’s collaborations with brands like Starbucks, Budweiser, Abbott, Oreo, and others, which set them apart from products from Baidu and Xiaomi.
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Of course, it’s worth noting that while Baidu might ship as many devices as its competitors, its DuerOS natural language platform continues to grow at an exponential rate. The install base recently passed 400 million as voice queries topped 3.6 billion, up from 150 million voice queries last November and 100 million last August (when DuerOS reached the 800 million-query mark).
“Low-priced devices are vital growth drivers for smart displays and heated competition ahead of the Q4 shopping season is expected,” added Low in a statement. “It is crucial, especially for Chinese vendors, to avoid falling victim to the sunk-cost fallacy, in which they have to stop money-burning to achieve shipment goals, but instead focus on their overall business objectives and to generate revenue soon.”
On the smart display side of things, the category grew 500% globally to reach 6.3 million units in Q3 2019, with Amazon nabbing second place with 2.2 million devices sold. That’s compared with Baidu’s 2.3 million units, Google’s 0.7 million, and Xiaomi’s 0.6 million.
“The Echo Show 5 smart display contributed significantly to Amazon’s success in Q3, making up 16% of Amazon’s overall global shipments and it became the best shipping smart display of all the brands,” said Canalys research analyst Cynthia Chen. “Despite smart displays gaining importance in vendors’ strategies, consumer price sensitivity and pragmatic use cases remain key challenges to be solved.”
In April, Canalys predicted that the global smart speaker market would top 200 million units by the end of this year. Assuming that comes to pass, it’d roughly double the circa-2018 market’s 114 million units. Specifically, the firm expects the U.S. will retain its installed base lead but that China, South Korea, and Japan will see 166% growth (from about 20 million units to 59.9 million units), 132% growth, and 131% growth, respectively. Elsewhere, it’s projecting Canada’s smart speaker market will grow 80%, followed by Germany’s installed base with 49% growth and the U.K.’s with 47%.
Analysts at Markets and Markets anticipate the overall segment will be worth $11.79 billion by 2023.
