Emerging markets The VPA – the content interface of the future?


Consumer research by Futuresource Consulting reveals that almost 1 in 3 consumers live in homes where at least one smart home device has been installed. The smart home is poised to emerge by stealth, as consumers who install their first device will be keen on automating further, with the VPA (Voice Personal Assistant) being a leading contender.


Over 4,000 consumers in France, Germany, UK and USA were surveyed on smart home devices, appliance ownership, perceptions and purchase intent. Voice Personal Assistant (VPA) speakers were included, looking at both current and future adoption. Currently, the “smart speaker” is the leading device format for the VPA, but others are starting to emerge. Currently, VPA smart speakers are most com- monly used for streaming music. However, a substantial number of consumers claim to use their VPA speakers for a number of home automation purposes such as controlling the heating or the lighting. Respondents were also enquired about what uses they plan to give to their VPA speakers in the future. Almost a third of respondents claim to have received their VPA speaker as a gift. Bundling seems to be another retail opportunity as a small but not negligible number of consumers report that they acquired their smart home devices bundled with a VPA speaker.


VPA frontier


The allure of VPAs is bucking the wider audio market’s slowdown and even reinventing Am- azon as the world’s largest audio equipment vendor. However, that’s just the beginning of a wider market transformation, with voice personal assistants at the heart of a new CE land grab.


“In the US, smart speakers now account for nearly one out of every three shipments in the home audio hardware category,” said Rasika D’Souza, Senior Market Analyst at Future- source. “That’s a feat that was inconceivable to many just a year or so ago, and it has the potential to unsettle the entire CE industry.” “Globally, in Q1 2017 alone, 3.4 million smart speakers were sold, with a retail value of more than $440 million. That’s year-on- year growth of 710%. When we factor in the wider opportunities for VPAs, things start to look very interesting indeed.”


“In much the same way that Microsoft took over the PC market with Windows, how Apple dominated the MP3 market with the launch of the iPod and Google cemented its place in history on the back of its search engine, au- dio is becoming the new wild frontier where the outright winner could take control of the consumer’s purse strings.”


Localised demand


At present, beyond the US and the UK, interest in the category has been relatively lacklustre, with only around 10% of smart speakers being sold outside the US market. Despite strengthening interest from other regions, Futuresource forecasts show that by 2021 the US will still account for more than 50% of worldwide volumes. This is primar- ily due to the intense levels of interest and associated spend on audio and smart home solutions from US consumers when compared with other world markets. However, the potential for VPAs to be the new go-to consumer interface, particularly in the burgeoning smart home sector, has created a platform race with Amazon, Apple, Google and Microsoft, with each launching new prod- ucts to drive penetration of their platforms. “With the scale of the opportunity, it’s not surprising that the CE big hitters are jostling for position and trying to grab the consumer’s attention,” adds Simon Bryant, Associate Director at Futuresource Consulting. “We’re not just talking about providing a new voice interface for consumers. VPAs are poised to become the new, primary interface for all consumer electronics devices across the board. This is probably the biggest opportu- nity of the decade. The company that gets it right will set the agenda for the next genera- tion of CE devices.” To date, smart speakers have been the natural home for VPA technology as they provide the perfect combination of features, functionality and affordability to introduce the concept of VPA to consumers. Moving for- ward, VPAs will proliferate into other device categories throughout the home, as well as cars, public places and in mobile devices.


VPA devices From next year, Futuresource forecasts show


that the set-top box will be the largest single category for VPAs, pushing smart speakers away from their current position at the heart of the home network. “Look out for the coming VPA land grab, as many companies will want a piece of this new revolution,” says Bryant. “Whether you’re a device maker or a content provider, you won’t necessarily want your customers talking to Alexa or Siri to access your services. VPA technology could give a single company the opportunity to gain influence over the whole market. Owning the user interface will allow it to promote associated software and services, building out an ecosystem and developing a lucrative partner network.”


Simon Bryant, Associate Director at Future- source Consulting: “Whether you’re a device maker or a content provider, you won’t neces- sarily want your customers talking to Alexa or Siri to access your services.”


Business Technology Trends 2017 In Association with AV News, macom Gmbh and Maverick


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