The smart speakers and display market is facing some headwinds due to the global component shortage, according to the latest research from Strategy Analytics. The sector witnessed a 10% year-over-year increase in the shipment of units to 39.3 million, though compared to the Q2 2021’s 39 million, it is much less. And this flattening curve might persist with the new Pandemic variant spreading across the globe.
“While our earlier forecasts showed we expected the market to return to stronger growth levels in 2021 if component supply constraints eased, this scenario is not playing out,” noted David Watkins, Director, Intelligent Home. “China alone typically accounts for 30% to 40% of the global market each quarter, so challenges experienced by Alibaba, Baidu, and Xiaomi will be indicators for how well – or not – China is managing its supply chain issues. The contract manufacturers partnered with these three, and dozens of other smart speaker and smart display brands, are settling in for a prolonged period of supply chain issues.”
Sales of Smart Displays in Q3 surged year-on-year by almost 19% to 11.2 million units, while sales of basic smart speakers (without a display) increased about 7% over the same period. Eighteen of the top 50 models sold in Q3 2021 were smart displays. Google’s Nest Hub took the lead in Q3 2021 with 1.5 million units shipped, followed by the second generation of Amazon’s Echo Show 5 and Baidu’s Xiaodu Zaijia 1c. Google’s Nest Mini was the top-selling device overall in Q3 2021, at just over 5 million units, followed by Apple’s HomePod Mini and then Amazon’s fourth-generation Echo Dot.
Consumer Intelligence Research Partners (CIRP), Gurman revealed that Amazon’s Alexa-powered devices capture 69% of the smart speaker market, Google has 25% of the market share. Apple, on the other hand, has captured just 5% of the market.
Apple is trying its best to narrow the gap with the leaders in the smart home market with its HomeKit, introduced in 2014, that allows users to control their smart home devices using their iPhones and iPads. It is now ready to introduce a 15 inch iPad that will act as a smart display too.
Amazon topped the race in the overall smart speaker and smart display market in Q2 2021, followed by Google, Baidu, Alibaba, and Apple, respectively. The top five are dominating the market at the entry-level ($50 to $99) and ultra-low ($49 and less) price bands, with Apple’s surge powered by its HomePod Mini.
Jack Narcotta, Principal Industry Analyst, Smart Home, says, “While the first half of 2021 in the global smart speaker and smart display market was a return to form as vendors capitalized on pent-up demand from 2020, the lingering, if not intensifying, issues of shipping and logistics challenges, component shortages, and the Delta and Omicron variants of the Covid-19 virus in the second half of 2021 are hanging heavy on this market.
It is likely this market’s growth will not return to pre-Covid levels until at least 2023.”