Yesterday, Samsung‘s Harman Kardon announced a new $600 smart speaker called the Citation 500 that will integrate Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Assistant. Today, Bose unveiled a trio of new products, including Bose Home Speaker 500, a Soundbar 700, and Soundbar 500 — all of which integrate Amazon.com‘s (NASDAQ: AMZN) Alexa.
Those are just each company’s latest gadgets. Harman Kardon launched an Alexa-powered speaker called Allure last year, shortly before Bose added support for Google Assistant to the second-generation version of its popular QuietComfort 35 wireless headphones (which also just received Alexa support earlier this month). The growing number of third-party integrations that Google Assistant and Alexa are receiving will only expand their lead over Apple (NASDAQ: AAPL).
The new Alexa-powered Bose Home Speaker 500. Image source: Bose.
Alexa’s and Google Assistant’s reach is bigger than you think
Market researchers Strategy Analytics and Canalys recently released estimates on the global smart speaker market in the second quarter, and while they differed on who was No. 1 and who was No. 2, both agreed that Amazon and Google are dominating the market. The two giants combined commanded 69% of the market, according to Strategy Analytics, or about 57% in Canalys’ estimation.
However, those estimates for unit volumes and market share only consider the first-party devices that Amazon and Google sell. If you include all of the third-party smart speakers that integrate Google Assistant, Alexa, or both, then the reach of those voice assistant platforms gets even bigger.
Sonos, which recently went public, is also transitioning its product portfolio, starting with the Sonos One released last year and more recently the Sonos Beam, both of which integrate Alexa. As of the first quarter, Sonos had sold over 4.6 million products on a trailing-12-month (TTM) basis, according to its prospectus. The product mix is unclear, but the company does attribute its volume growth to the Sonos One.
At this point, most of the prominent high-end audio players are aggressively working to include third-party virtual assistants in order to capture some of the incredible growth that the product category is currently enjoying.
And then there’s Apple
In contrast, Apple is pursuing a familiar strategy of strict hardware-software integration. Siri is widely considered less capable than Alexa and Google Assistant, but third-party manufacturers don’t even have the option to integrate it if they wanted to. It’s worth acknowledging that some major improvements are coming for Siri in iOS 12, including a new Shortcuts app that will allow users to automate common tasks and create customized workflows. But within the smart speaker market, those improvements will only benefit HomePod owners.
While Apple was the first to launch a virtual assistant, Amazon was the first to open up its virtual assistant to third-party developers, turning it into a vibrant platform full of third-party innovation. Apple was right to recognize the potential of voice-powered interfaces in enabling new computing platforms, which led it to acquire Siri in 2010, a deal pushed by ex-software chief Scott Forstall. But in the years since, Siri has taken a back seat to rivals. Can it ever catch up?
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
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