Google Home Starts to Catch Up

US Market Doubles in Under a Year, as Google Grabs 40% of Holiday Quarter Sales

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 December 31, 2017.

CIRP analysis indicates that within the US installed base of devices, Amazon Echo has 69%, or 31 million units, while Google Home has 31%, or 14 million units. The installed base grew by 18 million units in the quarter ending December 31, 2017 (Chart 1).

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

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

Home automation devices were the star of the holiday shopping season in 2017. In less than a year, the installed base more than doubled, as Amazon and Google brought new models to the US market quickly, and aggressively promoted and discounted these products.

Amazon remains the market leader, with over two-thirds of the installed base, yet Google has started to catch up. Google Home accounted for about 40% of the units sold in the US in the holiday quarter, its largest share of quarterly sales since it was introduced in November 2016.

Both Amazon and Google have emphasized lower-priced models. This allows consumers to try the new devices, and also buy multiples for multiple rooms. The Echo Dot continues to account for over half of all Echo units sold, and increased that share by a couple of percentage points in the holiday quarter. Google introduced its Home mini toward the start of the holiday shopping quarter, and it grabbed over 40% of Google Home sales in the quarter. Even more interesting, 20% of Amazon Echo users and 13% of Google Home users report owning more than one unit.

In the US, Amazon and Google have begun to sew up a considerable portion of the market. Around 60% of Amazon Echo and Google Home users also have connected at least one other accessory, such as thermostats, security systems, appliances, and lighting. Between learning a new operating system and interface, and connecting these smart speakers to the growing range of smart home accessories, new entrants will have trouble finding a place in homes that already have an Amazon Echo or Google Home. Of course, there remains tens of millions of other homes that do not have a smart speaker yet. So, as Apple’s HomePod comes to market, and Microsoft, Samsung, and even Facebook consider what to offer, Amazon and Google have already captured the early adopters. New entrants will need to carefully consider features, operating system, and pricing to attract the remaining available homes.

CIRP bases its findings on its survey of 500 US owners of Amazon Echo or Google Home, surveyed from January 1-17, 2018, who owned one of these devices as of December 31, 2017. For additional information, please contact CIRP.