iPhone owners more likely to buy a smart speaker (AAPL, GOOG, GOOGL)

Voice Assistant Users

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Smart speakers are more popular among iPhone users than Android users in the US, according to a survey from Voicebot.ai. 

The survey, which analyzed 1,057 US adults in January 2018, found that iPhone owners are 22% more likely than Android users to own a smart speaker device. It’s important to note that the survey took place prior to Apple’s entry into the smart speaker market with the HomePod.

iPhone owners’ increased willingness to own a smart speaker may in part be due to the level of exposure iPhone owners have to voice assistants on their smartphones; over 76% of iPhone owners have tried Siri, but only 42% of Android smartphone owners have tried Google Assistant.

Here are two key findings regarding the behaviors of iPhone users in the smart speaker market:

  • iPhone owners favor Amazon Echo devices over Google Home smart speakers.iPhone users are 30% less likely to own a Google smart speaker. This is partly because iOS users are often early adopters of new technologies. Amazon introduced the first Echo device in June 2015, over a year before Google introduced the Home.
  • iPhone owners are 8% more likely to make a purchase on a smart speaker than Android owners. This, combined with the tendency for iOS users to spend more in apps, bodes well for developers and brands targeting iOS users on Echo, and signals the HomePod’s potential to generate revenue after it adds more capabilities.

The current narrative of the smart speaker space will change with Apple’s entry. Applelaunched its HomePod smart speaker in February 2018. Of the 10% of consumers surveyed who don’t own a smart speaker and plan to purchase one in 2018, more than a quarter plan to buy the HomePod. This could be bad news for Amazon, as iPhone owners may pivot to the HomePod as opposed to Echo devices.

The additional smart speaker option by Apple could help to drive overall adoption of smart speakers, because Apple’s entrance into a nascent hardware space tends to significantly move the needle. That’s because of the “Apple effect” — a noticeable uptick in device and tech adoption for both Apple products and those of competing brands whenever Apple launches a new version of an existing technology.

The voice app ecosystem is booming. In the US, the number of Alexa skills alone surpassed 25,000 in January 2018, up from just 7,000 the previous January, in categories ranging from music streaming services, to games, to connected home tools.

As voice platforms continue to gain footing in homes via smart speakers — connected devices powered primarily by artificial intelligence (AI)-enabled voice assistants — the opportunity for voice apps is becoming more profound. However, as observed with the rise of mobile apps in the late 2000s, any new digital ecosystem will face significant growing pains, and voice apps are no exception. Thanks to the visual-free format of voice apps, discoverability, monetization, and retention are proving particularly problematic in this nascent space. This is creating a problem in the voice assistant market that could hinder greater uptake if not addressed.

Business Insider Intelligence, Business Insider’s premium research service, has written a detailed report on voice apps that explores the two major viable voice app stores. It identifies the three big issues voice apps are facing — discoverability, monetization, and retention — and presents possible short-term solutions ahead of industry-wide fixes.

Here are some of the key takeaways from the report:

  • The market for smart speakers and voice platforms is expanding rapidly. The installed base of smart speakers and the volume of voice apps that can be accessed on them each saw significant gains in 2017. But the new format and the emerging voice ecosystems that are making their way into smart speaker-equipped homes is so far failing to align with consumer needs. 
  • Voice app development is a virtuous cycle with several broken components. The addressable consumer market is expanding, which is prompting more brands and developers to developer voice apps, but the ability to monetize and iterate those voice apps is limited, which could inhibit voice app growth. 
  • Monetization is only one broken component of the voice app ecosystem. Discoverability and user retention are equally problematic for voice app development. 
  • While the two major voice app ecosystems — Amazon’s and Google’s — have some Band-Aid solutions and workarounds, their options for improving monetization, discoverability, and retention for voice apps are currently limited.
  • There are some strategies that developers and brands can employ in the near term ahead of more robust tools and solutions.

 In full, the report:

  • Sizes the current voice app ecosystem. 
  • Outlines the most pressing problems in voice app development and evolution in the space by examining the three most damning shortcoming: monetization, discoverability, and retention. 
  • Discusses the solutions being offered up by today’s biggest voice platforms. 
  • Presents workaround solutions and alternative approaches that could catalyze development and evolution ahead of wider industry-wide fixes from the platforms.

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