Many companies raced to get into the voice-first home assistant market. According to Deloitte Research, revenue of the broader “Smart Home” market is expected to reach $58.6 billion in 2020. That considers a wide range of devices from home sound systems to smart thermostats. These devices are likely to tie into just four major systems: Amazon’s Alexa, Google Assistant, Apple’s Siri and Microsoft’s Cortana. As was the case with Android, iOS and other mobile devices, this has businesses asking, “Which home assistant should we focus our development efforts on?”
And similarly, the answer depends upon characteristics of your target market, monetization plans, and a host of other factors. When it comes to your business, what are your foremost questions? Do they include where and how are your customers buying products and ordering services?
IoT, Phone Home
But first, why look at voice-first home assistants? Tech makes it easier to commute to work, to travel, to automate things at the office, to communicate with people all around the world. Having explored all of the cool things we can do while on the move, how about bringing some of them home?
All manner of common daily tasks can be handled by a voice-first home assistant, more easily and naturally than carrying around a smartphone all the time. People verbally communicate with one another every day. Things have advanced to where we can now speak to our tech devices more and more like we would with another human being. And more often, they actually listen and do as instructed!
The most obvious advantage of voice-first home assistants ultimately comes down to ease-of-use. They add convenience and comfort, let you be more efficient at home and save time, too:
- If you want to listen to your favorite song, you don’t need to grab your phone, open the music app, remember the list it is on and select it. Instead, you can say “Ok, Google, Play Misty for Me.” Done.
- If you’re in bed and the doorbell rings, you don’t have to get up to see who it is. You can say “Alexa, show me who is at the front door.” Then, your voice-controlled home assistant will use the Wi-Fi connected outdoor camera to display who is at the door on your TV.
- And, there’s the ever famous, “Order me a Pizza / Uber ride.” Maybe your business can fit in here?
Thanks to machine learning, smart home systems are rapidly reaching a point where you don’t even have to ask these systems to do something – they’ll just know based on your habits and preferences.
VUI and Home Assistant Performance
Being fairly new, voice-first home assistants still have their share of quirks as Artem Petrov, our CEO, pointed out with a few grins and groans:
“It’s necessary to speak clearly and loudly to be reliably recognized. I’m waking up at 5 am and using Amazon’s Alexa to control the lights in my apartment. Whispering commands to avoid waking my wife can take several attempts. It can be like a freakin’ Verizon Wireless commercial gone bad,
Siri, can you hear me now? <silence>
Siri, can you hear me now? <silence>
Siri… (expletive), I’ll do it myself… (expletive).”
But while new, these systems are also developing quite fast. Those interested in the features and performance of all four systems should check out Jeff Dunn’s comparison on Business Insider. His evaluation sees Google Assistant’s overall functionality coming out on top, followed by Siri and then Alexa. He likens Cortana to, “a Bing short-cut.”
In fairness, Cortana has the best integration with Office 365, but that better be the case. Numerous factors, including Microsoft’s fairly dismal performance in most things mobile, keeps Cortana mostly in the Windows 10 PC/Laptop market. Nevertheless, it is notable that Cortana was picked up by Nissan and BMW.
All of the major players (and especially Microsoft) have vast resources committed to advancing voice recognition, machine learning and AI. All of the systems can be expected to improve over time. Even so, each will likely keep its feature focus as best fits their overall strategy.
That considered, let’s take a quick look at each of the other major systems.
Siri
Apple is perhaps best known for its fashion-statement focus on design. While not as large as a user-base as Google’s Android, well over a billion iOS devices are in active use, globally. Apple’s vast, loyal, upscale audience helped it to earn over 90% of global smartphone profits in 2016.
Debuting in 2011, Siri is the original, modern, voice-first virtual assistant. Even then, with some light jury-rigging, it could function as a home assistant. For practical purposes, its home component launched with the HomeKit framework on a licensed basis, alongside iOS 8 in 2014.
Apple’s HomePod, dedicated home assistant device, didn’t start rolling out until December of 2016 – and at well over twice the price of its Amazon and Google counterparts. All critics agree that HomePod is a superior speaker.
Key Points on smart speakers:
- Largest “voice-first” and “smart home” capable audience base.
- HomePod is an unnecessary accessory, Siri already had the functionality.
- Conversely, late to the show and the hype for having a dedicated voice-first, smart home system.
- The App Store has the best per user monetization rate, often by better than a 2:1 ratio (depending upon app category).
- 50+ brands have HomeKit-enabled accessories.
Siri is best for companies wanting to tap into, but not exclusively focus upon, the voice-first and/or smart home market. It is the “premium” monetization option especially for apps and IoT devices. The strongest markets will be the United States, Western Europe, and Southeast Asia.
Google Assistant
Nest Labs is one of the major players in both the VUI and voice-first home assistant markets thanks to its compatibility with Google’s Home system and a wide range of services. Nest was acquired by Google in January of 2014, with 280 employees at the time. By the time Google sold Nest to Alphabet, Inc. in 2015, its workforce had grown to over 1100 employees.
Google’s strongest features stand in having the best search functionality of any of the home systems. Google has a 75% share of the search advertising market and around 1.5 billion Android users worldwide. On the other hand, Android captures a substantially higher market share than Apple in developing markets. Many Android users don’t have the basis to implement the basics of a “smart home” system.
Over 1 million Google Home systems have shipped, but that pales in comparison to Amazon which we will look at next. Google Home system offers better sound quality than Amazon’s Alexa, but not nearly as good as Apple’s.
Key Points:
- Google’s “gold mine” here is in the “personalized data” it can use or sell in conjunction with its search and search ad monetization.
- Google Home works with numerous, popular services.
- Google’s not really structured well for optimizing retail efforts,
- Historically, its users spend 20-30% as much as iOS users.
The strengths of Google and Android reside in the volume of users. That’s what companies looking to base their applications on Google Assistant should maximize. Google Assistant is likely to confer additional value in terms of user data and making better use of it in advertising. Also, Google Assistant is probably the system of choice for businesses feeling threatened by Amazon.
Alexa
We have a lot to say about Amazon. Amazon more than any other company, makes it easy for others to participate in their business. This comes via Amazon’s affiliate program, third-party seller program, and even Uber-like delivery service. This has also extended in the development of Alexa’s skills. And it is fair to say that Alexa took the tech industry a bit by surprise.
In addition to releasing Alexa’s API to developers, $100 million was set aside for the Alexa Fund to, “invest in companies making voice control skills and technologies.” So far, that’s financed at least two-dozen Alexa Voice Service startups. As of June 2016, Alexa had 1000 skills comparable to “Alexa, Play Misty For Me”- skyrocketing to over 10,000 skills by February of 2017.
According to the Seattle Times and Morgan Stanley, as of January of 2017, Amazon sold over 11 million Echo devices. But, more to the point, Amazon scored 43% of all US online sales for 2016. Leastwise, Amazon has the clearest and most developed strategy for monetizing the Smart Home market – and probably any other market it finds interesting.
Key Points:
- Alexa has the largest and fastest growing “skill set” of the smart home systems.
- Strongest online ordering capabilities complementing its online storefront
- Strong music selection capabilities, but average sound quality – likely meant to tie into higher quality stereo systems.
- Fewer Alexa-enabled accessories compared to Siri or Google Home Assistant.
Alexa has the largest customer base with a dedicated voice-first home assistant. Alexa is the system for maximizing e-commerce on products, services, smart home devices, and applications.
We are not forgetting Sonos
The convergence of devices sometimes makes it difficult to say what something is because it is or can be more than one thing. Sonos is known best for its speaker systems and as a home sound system. But it, too, is becoming more like a home assistant – and the basis for one of our upcoming projects with nugs.net.
Sonos is an exceptional sound system. We will be focusing on voice-first music systems separately. All three of these major players have something specific going for them. So, the question is which best reflects what you want to achieve with the “app”, “skill” or “actions” you are aiming to develop for your business?
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