June 14, 2018
Wireless home audio is big business — driven in part by voice recognition software that enables speakers to do more than deliver sound.
New data from Futuresource Consulting found that Amazon’s Echo speaker sold more units worldwide in 2017 than Amazon Fire tablets and Fire TV media devices.
With almost 20 million units sold globally last year, Echo’s installed base stood at 28 million, marginally ahead of Fire tablets at 27 million, with Fire TV also close behind, at 26 million.
Indeed, Echo commanded 90% market share at the end of 2016, a percentage that dropped to 72% in 2017 following the arrival of competing wireless speakers from Google Home, Harman Kardon, JBL and Sony, among others.
The closeness of Amazon device installed bases highlights that, despite the hype surrounding Echo, Amazon isn’t focusing all its device efforts on its smart speakers.
London-based Futuresource says the Alexa voice assistant software is now also standard on its Fire TVs and tablets and last week’s announcement of the Fire TV Cube is the latest development in the Seattle-based firm’s multi-device strategy to position itself as the key “go-to” facilitator in the smart home.
Meanwhile, data shows that while Amazon is the category leader globally, Echo sales are still heavily skewed toward the United States — with only 13% of its 2017 sales international. As a result, Fire tablets outsold Echo speakers internationally in 2017 by a ratio of over 4 to 1. Fire TV sales are partly facilitated by Amazon Prime (over 40% of global Prime members are outside of the U.S.).
Futuresource said Amazon’s “boldness and risk-taking” in both consumer technology and the media space is further emphasized by its recent Premier League rights deal in the U.K., where there are now over 7 million Prime members.
“This was an expected step, but unusual for Amazon given it is a U.K.-only deal,” said the research firm in a release. “Its wider in-home strategy continues to be more developed in the U.S., recently focusing on home security through a dedicated ‘home services’ division.”
Regardless, Futuresource said Amazon’s drive to create an installed base of voice-activated devices in the home will not only fuel e-commerce sales and Prime subscriptions, but will also serve to ramp up use of third-party smart home applications and potentially position Alexa at the core of the home entertainment hub.
Amazon Alexa is now able to facilitate the control of more than 4,000 smart home devices from 1,200 unique brands, including Whirlpool, GE Appliances, LG, Samsung and smart oven manufacturer June Life.
Amazon’s pace of innovation continues to impress, but it will continue to encounter challenges. Citing a consumer survey, Futuresource 38% of non-adopters of smart speakers “can’t see a use for smart home devices”, with a third citing privacy concerns.
“Amazon may well need to prioritize such consumer concerns if it is to ultimately achieve success in the smart home in the wider international markets,” said Futuresource.