There is a saying in the UK: “A dog is for life, not just for Christmas”. And, in today’s ever connected world, the same could well be applicable to smart speakers, arguably the industry’s most hyped gadget in more than a decade.
Indeed, market research agency eMarketer predicted a boom in sales for smart speakers, tipping the devices to be the holiday gift of choice during the recent festive period, surpassing the once much hyped smartwatch.
eMarketer’s projection came on the back of forecasts it made in April 2017 stating there would be 35.6 million smart speaker users in the US in 2017, with the figure tipped to grow to 52.8 million in 2019.
The boom is, in fact, hardly a surprise. Both Amazon (which according to eMarketer holds a 71 per cent market share) through Alexa and Google, which is trying to muscle in on Amazon’s dominance with its Home range, significantly dropped prices of their smart speaker devices at the end of 2017, and both no doubt represented a very attractive gift for many seasonal well wishers.
But, as with the worst-case scenario of a new family pet cast aside once the holidays are over (so the saying goes), does a similar fate await the smart speaker?
After a few of days of getting Google Assistant or Amazon Alexa to tell a joke, play music, or turn off the smart bulb, will these devices simply be unplugged, disconnected from the Wi-Fi and tossed aside?
Speaking in a Mobile World Live TV panel during the recent Mobile World Congress (MWC) in Barcelona, Orange’s SVP Technocentre, Luc Bretones, said the biggest challenge facing smart speakers is moving “beyond that gadget effect” and finding a really intensive relationship between the object and the people using it.
“You buy it for Christmas, your children ask for a joke and a song, and then what happens?” he asked.
Bretones said Orange, which joined the technology giants by developing smart assistant Djingo in partnership with Deutsche Telekom, was focusing on overcoming this long-term challenge by looking at “daily intensive interaction”.
“It’s the same story on your smartphone. You have around 250 apps, something like that on average, and you use perhaps five of them 90 per cent of the time. That’s the real challenge for smart speakers…focusing on what is important and essential for people, for daily life beyond the gadget…I don’t think it’s been cracked yet,” he said.
So, there are still some question marks around the industry’s latest must-have device. But, it’s clear with Google and Amazon pushing hard, Apple’s recent launch of HomePod, rumours Facebook is developing its own speaker and Microsoft also planning something around Cortana, there is a potential beyond what these smart speakers are currently being used for.
After all, these five companies are not in the business of making the wrong bets (mostly).
Alongside Bretones on the panel, Geoff Ramsey, co-founder of eMarketer, said the company’s research had found 25 per cent of internet users alone “use some sort of voice activated device”, whether in a standalone device or through a smartphone.
To go beyond that mark, Ramsey concurred the use case must go further than asking “what the weather is” and needs to be amplified.
And he’s confident it will happen: in the long-run, as these devices develop, Ramsey tipped voice to one day replace the 250 or so apps Bretones alluded to.
“Apps will give way to a triad of technology that will start with voice where we speak into a machine because it’s easier,” he said.
“The internet is all about reducing friction. If I just have to talk and not type into a desktop or mobile, which will then be tied into a chatbot or personal assistant powered by AI and does my bidding, it will provide services that are going to be useful to me.”
Also pushing the long-term smart speaker potential was Oren Jacob, CEO of PullString, a company which develops voice-based applications for smart speakers and helps companies develop their own voice intelligence.
He argued that while these devices had not yet found “the Angry Birds, Uber or Instagram of this space”, it was more important to keep in mind that the use case for voice should, and will, be uniquely different to the things which made smartphones so popular. He also suggested personality, not functionality, will make users want to persist with using smart speakers.
“The stronger the personality designed, the more you want to talk to it,” he said.
“If it’s functionality based and works on a lights on, lights off basis, and this person came to your house for dinner, you would not invite this person back because it would be the most boring person ever,” he said, adding: “Language is used as the ultimate conveyance.”
The operator role
Jacob believes Amazon’s position in the space is certainly interesting, particularly because it does not have a mobile footprint in the same way Google or Apple does.
The company instead opted to boost its third-party integration by partnering with numerous companies developing smart devices and providing Alexa through them. Google, of course, has a huge search engine as well as a hardware play, while Apple has its devices.
So, how does an operator like Orange compete? Bretones maintained its Djingo product was not actually there to rival Amazon or Google, but to complement what was already on the market. He said its offering is designed to provide support for its own customers, offering an end-to-end communications service across a range of different devices.
Ramsey said there was definitely room for other players to enter the arena and break up the duopoly Amazon and Google had already established: “There is always going to be someone new that comes in with a new angle, a new way to approach it and a new twist on it to make it a valuable service for other people,” he said.
Indeed, while Orange and Deutsche Telekom should rightly be commended for at least attempting to develop an operator play, they are among some of the only ones to do so.
In a separate panel at MWC 2018, Jacob issued a warning to operators, urging them to follow technology rivals and start developing their own intelligence around voice. He said the technology giants had now established a direct relationship with operators’ customers through their assistants on mobile phones, which inadvertently presented a threat.
Of course, this is a lot easier said than done and Andrew Snead, managing partner and head of North America at Delta Partners, questioned the argument.
He told Mobile World Live TV it was “very debatable” if operators could genuinely compete in a world where such technology giants are likely more at home in.
“This is artificial intelligence. It’s a deeply technical topic and capability and there are multiple questions,” he said.
“Is it reasonable to believe that operators can create voice interactive digital assistants that can be as rich and as meaningful as personalised as a Google, or Amazon? These things become richer as the volume of data that the tech players can harness and advance…History also doesn’t bode well to the extent operators can innovate to allow an offering to be as effective as some of the big tech players.”
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.