Home Automation Device Market Grows Briskly, to 27 Million

Amazon Echo and Google Home Continue to Split Installed Base

Consumer Intelligence Research Partners, LLC (CIRP), today released analysis of the results from its research on home automation devices, including Amazon Echo from Amazon.com, Inc. (NASDAQ:AMZN) and Google Home from Google (NASDAQ: GOOG), for owners of devices as September 30, 2017.

CIRP analysis indicates that within the US installed base of devices, Amazon Echo has 73%, or 20 million units, while Google Home has 27%, or 7 million units. The installed base grew by 7 million units in the quarter ending Septemer 30, 2017 (Chart 1).

  Chart 1: US Installed Base (figures in millions of units)

Chart 1: US Installed Base (figures in millions of units)

Sales of home automation devices continued briskly in the quarter. The two leading brands in the US market, Amazon and Google, together added 7 million units, and saw the market grow by about one-third over the quarter. Only one year ago, the entire market consisted of 5 million Amazon Echo units. With very aggressive promotion and rapidly growing customer interest, the market for these devices has more than tripled and still seems to be in its early stages.

Amazon continues to dominate the US market, with about three-quarters of the installed base. Yet, Google continues to make strides, and improved its share of the installed base by a couple of percentage points. In the quarter, each had sales that roughly reflect their respective shares of the installed base. Given the blistering pace of new product introductions, and how each has kept up with the other in terms of features and pricing, we expect they will continue to split the market this way, at least until other manufacturers bring their new offerings to the marketplace.

The growth in the marketplace obviously will attract new manufacturers, notably Apple’s anticipated HomePod. On the one hand, the market is very new and growing rapidly, so there should be room. On the other hand, Amazon and now Google have a huge head start in establishing their home automation operating platforms. The number of services, skills, and applications that already integrate with Amazon Alexa and Google Home systems, and the installed bases of early adopters who lead the way as more and more homes seek to be connected in these ways, create significant hurdles for an entrant with a new home operating system.

CIRP bases its findings on its survey of 500 US owners of Amazon Echo or Google Home, surveyed from October 1-25, 2017, who owned one of these devices as of September 30, 2017. For additional information, please contact CIRP.