Smart Speaker Market Size, Share & Industry Analysis, By Type (Virtual Assistants, Wireless Speakers, and Others), By Application (Residential and Commercial), and Regional Forecast, 2024-2032

The global smart speaker market size was valued at USD 12.52 billion in 2023. The market is projected to grow from USD 15.00 billion in 2024 to USD 61.40 billion by 2032, exhibiting a CAGR of 19.3%.  Asia Pacific dominated the global market with a share of 43.13% in 2023. The U.S. smart speaker Market is anticipated to grow significantly, reaching an estimated value of USD 18.16 billion by 2032, driven by Increased Adoption of Smart Home Products in the country.

A smart speaker is a wireless and voice-activated device equipped with integrated virtual assistant technology, such as Amazon Alexa, Google Assistant, or Apple Siri. These devices utilize natural language processing and artificial intelligence algorithms to interpret voice commands and perform various tasks, including playing Music, providing weather forecasts, setting reminders, controlling smart home devices, and answering questions. Smart speakers feature Wi-Fi connectivity, microphone arrays, and high-quality speakers to deliver an interactive and immersive user experience.

The increasing demand for speaker systems in residential applications is anticipated to surge the product demand in the near future. The proliferation of smart home products, the development of artificial technology, and the growth of display-based devices are a few major factors that are expected to create market opportunities for key players. Also, key market players are focusing on expanding their business units across the globe. For instance,  

• In September 2019, Amazon launched a new lineup of Echo devices to access Alexa at home with the new Echo Show 8, Echo Dot with clock, Echo, and Echo Flex. Also, the launched devices provide a three-dimensional audio experience with Dolby Atmos.

Furthermore, the COVID-19 pandemic has driven the need for speakers due to the rapid growth of the smart home market. Also, due to the expansion of wireless technology, end-users across the globe have started adopting advanced audio technology. This trend has significantly increased during remote working culture, which resulted in increased adoption of the smart type of speakers.

Smart Speaker Market Trends

Integration of Artificial Intelligence (AI) Technology with Smart Speaker

Advanced AI technologies, coupled with sophisticated virtual assistants, such as Amazon Alexa, Google Assistant, and Apple Siri, enable smart speakers to understand and respond to natural language voice commands with high accuracy and efficiency. These virtual assistants leverage machine learning algorithms and natural language processing (NLP) techniques to continuously improve their understanding of user queries and preferences, enhancing the overall user experience. Additionally, AI-powered features enable smart speakers to perform complex tasks beyond basic voice commands, such as personalized recommendations, contextual understanding, and predictive analysis. As consumers increasingly rely on voice-enabled devices for a wide range of applications, including smart home control, entertainment, information retrieval, and productivity tasks, the integration of AI and virtual assistants is expected to fuel demand for smart speakers and drive market growth in the coming years. For instance,

• Baidu’s expertise in AI gives it major advantages in building conversational capabilities and voice assistant speakers with natural processing language.

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Smart Speaker Market Growth Factors

Increased Adoption of Smart Home Products to Aid Market Growth

Consumers are progressively adopting smart home devices, including smart kitchen appliances, security cameras, smart locks, smart lights, thermostats, and smart TVs. Further, this type of speaker acts as a single point of control and contact hub through which all the smart devices can be easily operated and controlled remotely. For instance, Xiaomi is trying to develop an Artificial Intelligence of Things (AIoT) system using a speaker as a control hub that would help in connecting its other IoT products. Further, Xiaomi has almost 324 million devices connected on its AIoT platform.

Many speaker companies, such as Apple Inc., Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, and others, have begun to offer smart home connectivity features to their speakers while others are collaborating and partnering with smart home product providers, including Xiaomi and Siemens AG. For instance, in October 2020, Apple Inc. launched a HomePod mini speaker that is compatible with Apple's voice assistant Siri and Edge software. Further, the HomePod mini is enabled with Wi-Fi and smart home capabilities, as well as built-in security and privacy.

Increased Demand for Display-Based Smart Speaker Devices Expected to Fuel Market Growth

The increasing growth of display devices is helping sustain the growth of the market. Key players in the market are increasingly switching to display-based devices due to evolving use cases, including social networking, watching online content, and video call features.

Further, key players provide a wide range of smart display device products. For example, Amazon Echo Show 5, Facebook Portal, Google Nest Hub (2nd Gen), Redmi Touch Screen Speaker 8, Lenovo Smart Display 7, Xiaodu Zai Jia 1C (Baidu), Alibaba Tmall Genie CC8, and JBL link view are a few devices with display capabilities. Also, regular updates and enhancements are being made to these products according to end-user requirements.

• In September 2020, Baidu announced financing for Smart Living Group (SLG), including Xiaodu smart devices and the DuerOS voice assistant platform. Further, the funding is a Series A financing with a valuation of USD 2.9 billion.

RESTRAINING FACTORS

Threat to Privacy and Data Security to Hinder Market Growth

Data security, compatibility issues with smartphones and other devices, threats to privacy, and lack of standardization are the major threats hindering the growth of the market. Further, sharing data over connected devices led to privacy issues. For instance, a smart type of speaker has features to synchronize your corresponding device data, thereby raising concerns about data security. Therefore, the impact of data privacy and security threats will affect the smart speaker market share for a few years.

Smart Speaker Market Segmentation Analysis

By Type Analysis

Virtual Assistants to Dominate Market Owing to Rising Demand in Residential Applications

Based on type, the market is categorized into virtual assistants, wireless speakers, and others. Virtual assistants are expected to lead the market during the forecast period. The increasing demand for virtual assistants across industries, including residential and commercial, is expanding the market size. Companies, including Apple Inc., Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, and others are investing in developing advanced virtual assistants. Also, the companies are focusing on integrating solutions with artificial intelligence (AI) to offer virtual assistants with voice control, audio quality, and enhanced battery life.

Wireless speakers, including Amazon Echo Show 5, Facebook Portal, Google Nest Hub (2nd Gen), Redmi Touch Screen Speaker 8, Lenovo Smart Display 7, Xiaodu Zai Jia 1C (Baidu), and others are expected to witness fast growth during the forecast period, owing to the rising demand for display-based wireless speakers. Further, these factors are anticipated to drive the market growth in the near future.

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By Application Analysis

Increasing Adoption of Smart Speakers in Residential Sector to Propel Market Growth

Based on the application, the market can be categorized into residential and commercial. Residential is expected to hold maximum market share during the forecast period. For instance, in December 2019, Baidu launched Xidodu Smart Display X8. The new launch for residential speakers offers four robust microphones to facilitate voice interactions and an 8-inch full touchscreen display. Also, X8 supports gesture multiple biometric modalities such as recognition and face. The increased adoption of this type of speaker in residential applications is expected to drive market growth.

Commercial application is expected to gain traction due to the increased adoption of smart assistants for businesses that help in managing business tasks with increased efficiency. Commercial use of these speakers helps employees stay prepared, organized, and focused, eventually boosts productivity, and thus further anticipates driving the growth of the market. The market growth is attributed to rising use across residential and commercial applications in developed nations such as the U.S., Canada, Germany, and others.

REGIONAL INSIGHTS

Geographically, the market is segmented across North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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Japan, South Korea, China, and India lead the Asia Pacific market growth. For instance, in 2019, China was ranked first globally in speakers, with nearly 86 million users. Also, key players, including Xiaomi, Alibaba, and Baidu, are among the leading enterprises focusing on domestic consumers.  For instance,

• In August 2022, Google introduced its smart speakers, Google Home and Google Home Mini, in India. These smart speakers feature the company's AI-powered Assistant, enabling users to perform various tasks, such as playing music from apps, including YouTube, Spotify, and Play Music. Additionally, Google Assistant can read news, set alarms, and even order food on these devices. They also support controlling smart home devices and are compatible with both Android and iOS platforms.

China is among the largest markets in voice-enabled smart home services and products. Further, according to the China Electronics Standardization Institute (CESI), the smart homes market in China is growing with a growth rate of 20–30% each year.

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North America has witnessed rapid growth in smart speakers due to the early adoption of advanced technologies and a strong economic landscape. The penetration of speakers in the region is due to the presence of key speaker providers. The readiness of customers to use and accept new technology has also encouraged key providers in North America to develop advanced and new products. Further, according to the Smart Speaker Consumer Adoption report, the number of speakers per user rose by 10% from 1.8 in 2018 to 2.0 in 2019. In addition, the report states that there were about 133 million smart speakers in the U.S. in 2019, wherein 60% of users identified themselves as daily users. Also, the major market players, including Amazon Web Services, Apple Inc., and Bose, are based in the U.S., owing to which the products are shipped and launched in the region first. These key factors are driving the market growth. Furthermore, according to the Smart Speaker Consumer Adoption report, in 2019, the U.S. smart speaker penetration rate was highest at 26%.

Key players in Europe are increasingly embracing the speaker for smart homes, owing to the significant growth rate of digital technologies in the region. For instance, in 2019, there were 13 million people using speakers with a 22% penetration rate in the U.K. Similarly, in February 2020, Germany is expected to pass a new law for adaptable online media houses that will consider voice assistants as ‘end-user interfaces’ and help make more accountable to the country’s rules. Also, investment by key players in the market, government projects, and increasing funding in research and development activities are a few of the driving factors for the market growth in the region.

In South America and the Middle East & Africa regions, the adoption of speakers is supported by the rising adoption of digital technologies. For instance, in December 2021, Google launched its artificial intelligence-powered virtual assistant in Saudi Arabia. Google has been specially adapted to understand all Saudi dialects and respond in standard Arabic. These features will allow Google to sing and joke in Arabic language.

List of Key Companies in Smart Speaker Market

Key Players Emphasize Partnerships and Acquisitions to Strengthen Market Position

Apple, Avnera, Baidu, Beijing LingLong (JD.com), Deutsche Telekom, Fabriq, Facebook, Jam Audio, KaKao, and KitSound by Kondorare are some of the key players in the market. Major players in the market are developing speakers integrated with AI and others. Additionally, the rising market competition is forcing key market players to focus on the acquisition strategy to strengthen their positions.

List of Key Companies Profiled:

• Apple Inc. (U.S.)


• Avnera Corporation (U.S.)


• Baidu (China)


• Deutsche Telekom (Germany)


• Fabriq (U.K.)


• Facebook (U.S.)


• Jam Audio (U.S.)


• KaKao (South Korea)


• Lenovo (Hong Kong)


• LG Electronics (South Korea)

KEY INDUSTRY DEVELOPMENTS:

• March 2024: LG Electronics introduced the global release of the LG StanbyME Speaker (model XT7S), its latest portable speaker. Users can conveniently toggle the speaker and screen on/off with the included remote control and connect them via Bluetooth. The LG StanbyME also features a dedicated widget for centralized control and monitoring of the speaker's status.


• January 2024: JBL is updating its popular portable audio range, including JBL Xtreme 4, JBL Clip 5, and JBL Go 4, with the introduction of Auracast for versatile connectivity options. The new models feature up to 80% post-consumer recycled (PCR) materials in their construction, with stylish color options and enhanced sound quality. The JBL Xtreme 4 now includes Al Sound Boost for optimized audio output in real-time, delivering powerful and clear sound.


• October 2023: Sonos introduced the Sonos Era 100 and Sonos Era 300 smart speakers in India. The Era 300 offers an innovative design aimed at delivering exceptional spatial audio with Dolby Atmos. Furthermore, the Era 100 is a new version of the Sonos One. They are priced at USD 660 and USD 360 respectively.


• June 2023: Amazon India launched the Echo Pop smart speaker, priced at USD 60. It features a semi-hemisphere design and comes in Charcoal, Lavender Bloom, Glacier White, and Midnight Teal colors. The compact device is powered by Alexa, allowing users to play music, audiobooks, and podcasts from various providers, set timers, check the weather, read news, reorder items, make calls, and more.


• June 2023: Amazon unveiled the Echo Pop smart speaker with a hemispherical design and AZ2 Neural Edge processor, compatible with Hindi, English, and Hinglish voice commands for music playback, smart controls, and reminders. It also supports Bluetooth connectivity and features a microphone on/off button for privacy.

REPORT COVERAGE

An Infographic Representation of Smart Speaker Market

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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading Business Functions of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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Report Scope & Segmentation