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VPA-enabled wireless speakers market to reach $3.5B by 2021

End-user spending for the worldwide virtual personal assistant (VPA)-enabled wireless speaker market is forecast to reach $3.52 billion by 2021, up from $0.72 billion in 2016, according to Gartner.

“The market for VPA-enabled wireless speakers, such as the Amazon Echo devices and Google Home, is expanding rapidly with more vendors, device types and use cases,” said Werner Goertz, research director, Gartner. “We expect a temporary slowing of growth in 2018, as other devices, such as lighting systems, hubs and Wi-Fi mesh devices, adopt VPA functionality, especially in connected home scenarios.”

Beginning in 2019, third-generation VPA speaker products will start shipping with some artificial intelligence (AI) functions running on the device rather than in the cloud. Gartner expects these AI-enabled VPA speakers to use edge-device, machine-learning capabilities to enhance latency, alleviate privacy/security issues and utilise bandwidth more efficiently.

In healthcare, remote diagnostics and elder care applications will be enabled by VPA speaker, according to Gartner. “The cost of hardware and services will, at least in part, be subsidised by healthcare ecosystem partners who are likely to gain substantial efficiencies, and encourage patient adoption,” said Ranjit Atwal, research director at Gartner.

“Specialist VPA speakers with custom-made hardware and software configurations will roll out in the retail sector in 2020 and beyond,” he added. “New self-service, voice-based shopping and payment experiences will be enabled, reducing friction in the bricks-and-mortar as well as e-commerce shopping environments.”

The Gartner report also highlighted that by 2020, enterprises’ data privacy will not be a concern for 90 percent of the target market. “Concurrent with the introduction of the Amazon Echo in 2014 were reports about personal devices ‘snooping’ on private conversations in the home,” said Goertz. “Understandably, consumers raised concerns about intrusions into private conversations.”

Although concerns over privacy have little technical merit — the device has no processing capability unless the trigger word is recognised — market psychology is a current obstacle. Gartner believes that by 2020, such concerns will have largely been mitigated through educational efforts, adoption by peers and regulatory approvals of the device category. By that time, lingering concerns will be confined to a percentage of the market that is small enough to be insignificant.

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