Shulou(Shulou.com)11/24 Report--

Sales have declined for six consecutive quarters, and the inflection point is approaching?

Smart speaker, has it stalled?

"the smart speaker is a chicken rib, which has been left idle by me, the sound quality of listening to music is not good, and I can't understand the instructions." As a consumer of smart speakers, Xiao Li commented on social media.

In fact, search for Xiaodu speakers, millet speakers and Tmall genie on the black cat complaint platform and you can see nearly a thousand customer complaints. Most users left complaints such as "there is no response to the instructions issued by the so-called intelligent speaker", "false propaganda exaggerates the function of the product", "you can't turn on the phone without using it" and so on.

While stuck in the quagmire of quality, the sales of smart speakers have fallen sharply.

According to IDC's monthly sales tracking report on China's Smart Speaker equipment Market, sales of smart speakers in China in the first half of 2022 were 14.83 million units, down 27.1% from the same period last year, and sales were 4.2 billion yuan, down 16.2% from the same period last year.

How did the smart speaker end up here? How can players seek a turnaround?

01, sales decline, smart speakers dream shattered once upon a time, the wind of smart speakers blew to the world, technology giants are racing to enter the game. Google, Apple, Baidu, Ali, Xiaomi and other domestic and foreign technology giants have joined the smart speaker scuffle to launch their own smart speaker brand.

It can be said that the smart speaker has become a promising hardware product after smart phones and tablet computers.

During the outbreak period from 2018 to 2019, domestic smart speakers recorded year-on-year growth rates of 823.3% and 126.6% respectively. In 2019, global shipments of smart speakers increased to 147 million units, showing an exponential growth trend.

But now the growth of the smart speaker market has been difficult to restore the prosperity of that year.

According to the monthly sales tracking report on China's Smart Speaker equipment Market released by IDC, the sales volume of China's smart speaker market in the first half of 2022 was 14.83 million units, down 27.1% from the same period last year; the corresponding sales were 4.2 billion yuan, down 16.2% from the same period last year.

Photo source: IDC data shows that online channel sales of domestic smart speakers have declined for six consecutive quarters since the fourth quarter of 2020. IDC reported that the main reason is that the market sales of smart speakers are under pressure due to weak demand.

According to Strategy Analytics, shipments of smart speakers from Ali, Baidu and Xiaomi fell by 25.6%, 23.8% and 18.5% respectively in the first quarter of this year.

The situation abroad is not much better. According to the smart speaker report released by Omdia, a well-known market research institution, the annual compound annual growth rate of smart speakers in North America from 2021 to 2026 is expected to be only 1.3%, of which Amazon's annual compound growth rate of smart speakers fell to negative, and Google's only 0.2%.

Intelligent speaker products such as Home Max, Home Mini, HomePod and HomePod mini, which were once popular all over the world, have successively withdrawn from the historical stage.

The sales of domestic smart speakers have fallen into negative growth, and the growth of the North American market has come to a standstill. Has the business of smart speakers really come to an end?

02, the experience is poor, the price is high, smart speakers have come to an end? You know, the rapid expansion of smart speakers is largely due to the fact that their voice interaction capabilities are seen as the entrance to smart homes, but consumers are gradually discovering that this is a "hoax".

First of all, voice interaction is not unique to smart speakers. Nowadays, the intelligent era of the whole house has not yet come, in addition to smart speakers, other intelligent hardware products with voice interaction functions may become the next smart home entrance. For example, more and more manufacturers are already using mobile phones, tablets, televisions and so on as interactive portals for smart homes.

Tech giants also realize that it is not wise to bet on smart speakers, so they come out of smart speakers one after another. For example, Baidu's Xiaodu and Ali's Tmall began to engage in "cross-device integration", while smart home manufacturers such as Huawei, Xiaomi, Haier and Orebo have successively launched smart central control screens.

Second, smart speakers are not "smart". This is an old topic. Until now, users still need voice awakening when using smart speakers, and then use smart home products through "keywords + commands", which means that smart speakers lack the ability to serve actively, and smart speakers cannot understand complex language scenes, so they can only achieve simple functions such as playing music, telling stories, and checking the weather.

The ideal blueprint of intelligent speaker depends on the development of artificial intelligence technology, and its foundation is that it needs to be trained through massive data. Under the present situation that artificial intelligence and acoustic technology such as ASR (speech recognition), NLP natural semantic processing, far-field sound pickup and so on have not made great progress, voice interaction is difficult to replace touch interaction in a short time.

From the perspective of actual demand, buying a house is generally fine decoration, and developers have their own voice control, so there is no need to use smart speakers at all; ordinary consumers have a low demand for household appliances such as refrigerators, televisions and washing machines. It usually takes ten years to replace them, so smart speakers can't escape the fate of falling dust.

In the general environment, the development of the Internet of things is not mature, and the ecology of smart home has not been formed. All kinds of domestic smart home players fight on their own, different suppliers, different ecological smart speakers are difficult to work together, the situation is slightly awkward.

Not only is it not intelligent enough, smart speakers are also caught up in a "disclosure of privacy" scandal, which makes consumers stay away.

In 2019, when the media revealed that the smart speaker products of Amazon, Google, Apple and other giants had turned into "bugs" and collected negative news about users' voices, smart speaker players could be forgiven for collecting natural conversations to improve their technology, but for users, the family is the most private place, which is tantamount to streaking.

In addition, the decline in sales of smart speakers has something to do with bad market competition.

Smart speaker market has been monopolized by head players for a long time, lack of competition and product vitality. According to data from IDC, Alibaba and Baidu ranked in the top two with 34.96 per cent and 33.4 per cent of the smart speaker market respectively, while Xiaomi ranked third with 27.2 per cent, while other brands had a combined share of no more than 5 per cent.

In the highly fixed competitive pattern, MBA (Xiaomi, Baidu, Ali) began to fight a price subsidy war, through a variety of promotional means, the price of smart speakers was reduced to less than 100 yuan. Xiaodu Technology CEO Jingyi said publicly in 2019: "through certain subsidies, we can lower the threshold of this product, from the first line to the sixth line, so that more Chinese people can have access to such products."

"Burning money" has become the main theme of the competition, whether Ali, Baidu, or Xiaomi are losing money to varying degrees. 36 Krypton has reported that Baidu launched a screen speaker for the first time, with a loss and subsidy of more than 200 yuan per unit. As production increased, the figure decreased, but the subsidy continued.

The intensive price war in a short period of time has made the smart speakers move towards the sinking market of consumers, and the market has rapidly shifted from increment to stock, but manufacturers can no longer afford such a costly business.

Today, Internet companies are stepping into the era of contraction hand in hand, and downsizing has become the first priority. Businesses such as smart speakers, which seem to have a bright future but actually lose a lot of money, naturally become "abandoned". Manufacturers have narrowed subsidies, discounts during the promotion period have significantly weakened, and the daily price of smart speakers has increased.

The lack of intelligent product experience, the lack of protection of user privacy, the reduction of subsidies by manufacturers led to a rise in prices, and the repeated outbreaks of COVID-19 epidemic, consumer shopping decisions tend to be rational, and intelligent speakers for non-rigid consumption can no longer be sold.

03, high-end + decentralized, smart speakers to the second half of the smart speakers is "do not learn to walk, want to run" typical. Once, in order to expand market share, leading manufacturers did not practice "internal skills", but worked hard for sales.

Players piled up a bunch of concepts on smart speakers, but failed to deliver, leaving consumers disappointed. After the price war of sacrificing quality for sales, the track seems to be a flash in the pan, users' demand for smart speakers is not sticky enough, and market growth is in a bottleneck.

Perhaps improving the high-tech experience and speeding up the iteration of updates is the key to getting smart speaker products out of decline.

Data from iResearch Consulting Statistics support this view. According to the report, the top three requirements for smart speakers are feature-rich, accurate speech recognition and good sound quality, accounting for 38%, 35% and 33%, respectively. More than 40% of consumers in the sinking market said that the primary purpose of buying smart speakers is to experience high-tech technology, which is much higher than the cost-effective ratio of 18%.

The transition to high-end, through higher-quality smart speakers to stimulate consumers to change has become a new path for the development of intelligent speakers. Non-screen smart speakers will enhance the audio playback function and sound quality to expand the market. For example, Xiaomi teamed up with Manhattan to launch the xiaomiSound, which focuses on sound quality, which is priced at 499 yuan, while Huawei teamed up with Divare to launch a high-end product, Sound, which emphasizes the ultimate sound quality and costs more than 2000 yuan.

It has also been revealed that Apple is about to launch a smart speaker with a screen-suitable for the kitchen environment. The product will be conceptually closest to Google's Nest Hub and Amazon's Echo Show, a new category that Apple has never introduced before and is now highly anticipated by consumers.

According to an online market data report by RUNTO, in the first half of 2021, the share of the price segment of China's smart speakers reached 8.1%, an increase of 7.0% over the same period last year; the share of the price segment above 1000 yuan reached 2.4%, up 1.9% from the same period last year; and the share of the price segment below 200 yuan fell by 7.4%.

Another point to note is that it is not just business logic that comes out of the speaker hardware properties. At the product level, decentralization should also be valued.

Intelligent speakers should not only have a single voice interaction function, intelligent speakers with screens, cameras and other capabilities that can achieve multi-modal interaction will have a broader imagination.

In the era of the Alliance of everything, the dispute over the entrance of the traditional Internet is no longer meaningful. If intelligent speakers want to be invincible, they must achieve intelligent interaction everywhere and take the initiative to provide intelligent services for users.

At this point, Internet companies began to "show their own powers." Xiaomi began to emphasize the ecological brand and strive to strengthen the linkage between intelligent speakers and other IoT products; Baidu strives to improve the intelligent interactive performance of its products by combining its technical advantages in the field of AI; and Ali is making a fuss on application scenarios, extending application scenarios and creating customized products.

For example, Ali Tmall has announced cooperation with BMW, Volvo and Daimler, and launched special products for car, education, hotel and other different scenes.

Guanyan World data Center shows that there is still much room for improvement in the sales scale of intelligent speakers in China in the future. with the downward market expansion of intelligent speaker manufacturers, it is estimated that the sales of intelligent speakers in China will reach 17.42 billion yuan in 2023.

The "reckless" road of smart speakers has come to an end, and then enhancing the sense of experience will become the focus of competition, which can only evolve to be more useful and valuable, and become indispensable electronic devices for consumers. Smart speakers have the opportunity to compete with mobile phones, tablets and smart central control screens for the entrance status of smart homes.

The second half of the smart speaker has arrived, who can provide consumers with a better-than-expected experience, who can win more.

* the image is from the Internet. Please contact to delete the infringement.

This article comes from the official account of Wechat: Dongjianxin Research Society (ID:DJXYS-0309), author: Chu Wenlong

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