What Do 100 Million Alexa Devices Mean for the Local Market?

Amazon’s Dave Limp revealed in an interview that the company had sold “more than 100 million” Alexa devices through the end of 2018. In August, the online publication The Information reported that internal Amazon documents reflected 50 million Echo device sales at that point.

That’s 50 million Alexa devices sold in roughly four months.

Ahead of CES, Google said this morning that the Google Assistant is now on one billion devices, roughly double the 500 million it announced in May 2018. Most of these devices are smartphones, however.

Hardware tracking firm Canalys previously estimated that the smart speaker market was dominated by Amazon, which controlled 75% to Google Home’s approximately 25% (in Q3 2018). Those figures may be off, but they’re directionally correct. It’s clear that Amazon does have the majority of smart speakers sold in the US.

Most of the smart speaker market is North America. Given the numbers above, it’s now safe to say that we are approaching 100 million smart speakers in US homes — Amazon and Google combined. This is not to say that every American household has a smart speaker. According to the Census Bureau, there are about 126 million households in the US.

But penetration is extraordinarily high for a new technology. Indeed, for a piece of novel consumer technology — Amazon Echo was launched in 2015 — smart speakers have seen faster adoption than anything that preceded them. We now have a massive installed base of these devices, which will continue to grow.

Despite the hype, they haven’t become a marketing channel — at least not yet. They are however, driving massive adoption of smart home devices, fixtures and appliances. This will be one of the main themes of CES: all the Google Assistant and Alexa-powered appliances, from toilets and shows to slow cookers and refrigerators.

Despite surveys suggesting otherwise, most people are not regularly using smart speakers as a local search or discovery tool. However, Amazon clearly intends for users to find local business information through Alexa. And Google sees Home as a booking and commerce channel for local consumers. These use cases have yet to fully materialize, however.

The big question is will they?

Are smart speakers and smart displays really more about the smart home than they are about search, ads and local commerce? At LSA19, we’ll debate what’s next for Alexa and Google Home. Will these devices realize their promise as a marketing platform?

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