Amazon Faces Key Test In Smart Speaker, Smart Display Market – Seeking Alpha

February 24, 2022 by No Comments

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Amazon’s (AMZN) smart speaker market share is still ahead of the competition, despite several years of intense pressure. The latest report by Strategy Analytics shows a wide range of YoY growth rates between different smart speaker vendors. Amazon is in the lead but has not shown any big improvement over the year-ago quarter. On the other hand, Apple (AAPL) has managed to effectively double its market share with the launch of HomePod Mini.

The smart speaker and smart display market is very important as it will form the base on which future services will be delivered. We have already seen massive discounts by all companies to lure customers. The ability of Amazon to retain its market leadership will be crucial over the next few quarters as we get closer to market saturation. Globally, Amazon has a market share of 26.4% while Apple is close to a 10% market share. Amazon has continued to bring new products in the market like the latest Echo Show 15 at reasonable prices. A good presence in the smart device industry will be a key growth platform for Amazon as it launches new products and services and tries to build a better ecosystem.

Retaining market leadership

There has been intense competition in the smart speaker and smart display business over the last few years. Google (GOOG) (NASDAQ:GOOGL) has already launched a number of products. Apple has tried to improve its market share with lower-priced devices. The Asian market is mostly captured by Baidu (BIDU), Alibaba (BABA), and Xiaomi (OTCPK:XIACF). Despite this competition, Amazon is in the market leadership position according to the latest report by Strategy Analytics. Globally, it placed Amazon at the first position with a market share of 26.4%.

Strategy Analytics

Figure 1: Market share of different vendors in the smart speaker and smart display market. (Strategy Analytics)

This report was not all positive for Amazon. The report mentioned that Amazon’s Y/Y growth rate was 0% while other competitors still managed to deliver decent growth. Another report by CIRP shows that Amazon is in the lead in the domestic US market. Amazon has a market share of 69% in the combined installed base for smart speakers while Apple has close to 5%.


Figure 2: Cumulative market share of different vendors. (Geekwire, CIRP)

It is important for Amazon to maintain a good share within this business as it directly promotes other services offered by the company. Amazon Echo users can subscribe to Amazon Music at a massive discount. Amazon Echo users are also known to be bigger spenders on Amazon than casual shoppers and even Prime members. This will become more important as Amazon launches bigger screen Echo devices which make online shopping easier. Amazon is also investing heavily in quicker delivery which should be very attractive for regular Echo users.

Can Apple Catch Up?

Apple has made a number of missteps in the smart speaker segment. Its initial products were too expensive compared to the competition which limited the market share growth of the company. The company is now aggressively promoting HomePod Mini at a very low price. This has led to a big growth spurt for Apple, although that is from a low base. According to the report mentioned above, Apple had 92% year-on-year growth in the devices sold. Most of …….



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