Amazon is currently leading the smart speaker segment by market share with its Alexa-enabled devices but according to a recent report from Zion Market Research, this may not last for long as Alphabet's Google appears to be catching up at a relatively fast pace. Although Google placed second in the smart speaker segment in the third quarter of 2017 with a 25 percent market share, the research firm reminds that Amazon had a two-year head start over Google with its first Amazon Echo smart speaker, which was launched in November 2014. Nevertheless, while Amazon's Alexa accounted for 80 percent of the smart home segment in the first half of 2017, this figure dropped to 69 percent in the third quarter of the year in the wake of Google's Assistant and smart home devices employing it.
The first Google Home smart speaker was announced in mid-2016 and came to the market later in November, two years after the first Amazon Echo was released. According to the source, less than a million smart speakers of any brand were sold throughout Q3 2016, however, a year later in the third quarter of 2017 following the release of Google's solution, this number jumped to an impressive 7.4 million. Having said that, the research firm reckons that Google left a pretty big mark on the smart speaker segment once the first Home smart speaker was introduced to the market, and given these figures it would appear that Google managed to secure a fairly large number of first-time smart speaker buyers in the Home's first year of availability. This resulted in the market share for Alexa to drop to 69 percent in Q3 2017, down from 80 percent in the first half of the year, and Amazon's solution could continue to lose ground as Google secures more partners interested in building smart home products based on the tech giant's Assistant. Moreover, Google also introduced the Home Mini and Home Max solutions in October 2017 to give buyers more choices, and in the eyes of some consumers, the tech giant might have the upper hand over Amazon because Alphabet's solution offers better integration with popular Google products including Maps and YouTube.
As of this writing, Google has partnered with fifteen OEMs, some of which are now developing smart speakers equipped with screens in order to compete with the Amazon Echo Show. In the meantime, 225 smart-home brands have already employed the Google Assistant for more than 1,500 devices so it appears that Alphabet's influence in this segment is on the rise. While the smart home market registered $24 billion in revenue in 2016, the segment is expected to grow to around $54 billion in revenue by 2022, and it will be interesting to see how these two giants will continue to shape the market moving forward.