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Thursday, June 01, 2017
Google Set to Take a Lead in Market of Digital Assistants

the expansion of artificial intelligence (AI)-enabled services from companies including Google, Amazon, Apple, Microsoft and Samsung Electronics is expected to drive growth of the AI-powered digital assistants market, which is on track to exceed 4 billion consumer devices by the end of 2017.

According to business information provider IHS Markit, the device base will grow to more than 7 billion by 2020 as digital assistants become common across all consumer electronics categories. The huge smartphone installed base will be the main driver of this growth, with Google Assistant launching across modern Android smartphones, Samsung launching its new Bixby platform and Apple already well established with Siri.

Mobile will account for the largest share of devices, but digital assistants and voice as a user interface (UI) are increasingly important in the home through integration with connected smart speakers, set top boxes, smart TVs and streaming media devices. Here, Amazon has an early lead through its Echo speaker and Alexa assistant, which has developed an impressive range of skills and device and developer partners. Amazon increasingly will come under pressure from the likes of Google, Samsung and others that also are looking to develop their presence in the home.

"A broad range of companies are now looking to launch digital assistants or partner with existing services," said Jack Kent, director at IHS Markit. Device makers use assistants to provide a smarter experience, differentiate their products and tie users to their platforms. Telecoms operators have deployed assistants to provide new forms of customer support, reduce costs and integrate services. Other platforms can use assistants to help support their core businesses including advertising, retail and entertainment. The key challenges for digital assistant providers include balancing privacy concerns with the need to capture user data to ensure a compelling experience; ensuring sufficient developer support and service integration to offer a range of use cases; and understanding the cost implications of adding AI-enabled services on devices and providing continued network-based support."

"Voice control is crucial in the smart home environment," said Blake Kozak, principal analyst at IHS Markit. Amazon launched the Echo three years ago and there are now more than 105 companies that have smart home devices. That equates to a total available market of 65 million smart home devices in 2017 that are controllable through a voice assistant. This means that more devices in the home are controlled through voice commands, effectively reducing the need for continuous management of dozens of mobile applications. "Subsequently, controlling the smart home is no longer limited to one phone or tablet that sits behind a passcode, allowing friends and family to interact with the smart home to create an engaging and unique experience," Kozak said.

"Most home appliance manufacturers already have started to integrate Amazon Alexa and Google Assistants within their smart connected appliances," said Dinesh Kithany, senior principal analyst at IHS Markit. According to Home Appliance Intelligence Service from IHS Markit, the total addressable market estimated for smart connected home appliances is expected to be around 700 million units cumulatively from 2015 through 2020. "Currently these smart appliances are likely to be assistant-enabled, and there is a possibility of also embedding this digital assistant AI-based technology within certain premium ranges of appliances, such as smart fridges, smart wall ovens, smart coffee machines and even robotic vacuum cleaners. As adoption of this emerging technology grows, the key market differentiator will not be simply supporting digital assistant technology, but will be the use-cases and skill-sets which can be built around them," Kithany said.

"The launch of Amazon's Echo was instrumental in launching the smart speaker category, and in validating the concept of voice-enabled digital assistants providing a unified interface for the smart home," said Paul Erickson, senior analyst at IHS Markit. "The smart speaker market will continue to expand as Amazon's existing success with the Echo line and third party Alexa-enabled hardware will soon be complemented by additional, substantive category growth driven by the Google side of the equation. Third-party hardware momentum is now building behind Google Assistant and set to bear fruit in the form of new mic-equipped products debuting in the fourth quarter of 2017 and at the 2018 CES tradeshow. With the category accelerating in competitive velocity and price aggression, smart speakers stand alongside smartphones as a key platform driving digital assistant penetration within the greater ecosystem battle taking place."

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