Who doesn’t love listening to loud tunes? We all do. These days the trend of Bluetooth speakers is raging like a bull. But, in that domain comes the market of an intelligent speaker range. Yes, there are intelligent wireless speakers too in the market. Like in all other domains of market, China leads here in terms of sales growth. Artificially Intelligent wireless speakers are the latest trend in market sales, much like AI-powered smartphones using voice app services.
Let’s talk numbers:
There are several research and survey companies that have analyzed such trends in the worldwide sales. Let’s have a look:
- According to Canalys’ (a market research company): The worldwide sale of smart speakers over the past year has reached 187%! And here’s the shocker: China attributes to more than half of this growth. Among, the four leading companies (Google, Amazon, Alibaba, Xiaomi), the last two sell in China exclusively. Even more shocking here is that these two Chinese companies combined, have 30% of the global sales scene to their name. This number was negligible till 2017 Q2.
- Alibaba’s Tmall Genie and Xiaomi Mi AI were the firstly introduced smart speakers in Q3 2017. Xiaomi then introduced a Microsoft Cortana powered speaker. These companies focus on low cost, high volume sales for the smart speakers in the global market. Xiaomi took up the winner’s mantel in comparison to Alibaba. With at least with 2 million units shipped, they have a growth rate of an impressive 240% over the past quarter alone.
China and the US Smart Speaker Adoption
According to Canalys, the adoption rate for smart speakers is approaching a similar patter as in the US. Chinese companies have been targeting a specific market share of users with price cuts in their speakers. With low cost speakers attracting massive demand, it is difficult to wrestle these Chinese companies. Amazon and Google surely have been taking the lead, but the Chinese giants are not lagging behind too much.
The same tactic of aggressive pricing was utilized by Amazon and Google while establishing their ruling in the US and European markets. Both companies regularly sell their devices at around 29$-39$. This eliminates the reluctance and increases customer adoption rates. Now even Baidu is coming back in the race with the low-priced marketing strategy behind the two already established Chinese giants.
Baidu launched a new speaker in June, with only 10,000 units available. The Raven H speaker was halted in production just after 10,000 units. The Baidu OS may be trying to be one of the big attractions in the market. But, as of now, it doesn’t come anywhere near the numbers of Xiaomi and Alibaba. Baidu is focusing on its DuerOS and over a 100 million devices have the DuerOS voice assistant.
Because of this, China’s market has become a net for too many giants playing and fighting it out in the same field. Smaller players will have a hard time catching up to these tech giants in the Chinese markets. Where the previous customers are acclimatizing to the existing leaders, it is going to be a difficult task to get them ready for a new change where old territory has been established.
Xiaomi is still growing in terms of their market share. Xiaomi gained and maintained their market share of just a little over 50% in Q2 in China. The company’s new ‘Xiaomi Mini AI’ smart speaker is helping it scale up even further. Together, Xiaomi and Alibaba have nearly 90% of market share in their pockets.
The common advantage both these companies share is their financial backing to afford marketing and hardware subsidies to make their devices a reality quickly. This helps attract a ginormous user base, both nationally and globally. This highlights China’s potential to take over the US market for smart speakers in the near future.
Amazon’s Echo Dot and the upgraded pro range are surely selling like hot cakes in the market globally. US giants like Amazon and Google are using their research and marketing to drive the market as best as possible and serving no doubt to a large user base. But, the Chinese giants like Xiaomi and Alibaba are using their aggressive marketing and pricing to snatch the user base, which Google and Amazon acquired with similar techniques.
What’s even more interesting is it’s not just a race of these four horses. Baidu is also tackling them in the local market. So, overall it’s a race of three horsemen of global smart speaker Chinese apocalypse in the national market itself. And when you consider the two leading giants and put them in the global race, China is hands down winning and potentially taking over the establishes global giants.
There are new firms and new technologies coming up in the market every day. Let’s hope and stay tuned in for which firms stay ahead in the line with the use of latest upcoming technologies. AI is already a household name now, next up is IoT and devices that depend on it.
According to Quardigo’s Mridul Kabra, “Alexa, Siri, and other intelligent assistants are already compatible with IoT devices”. Let’s hope the Chinese giants take a lead here too.