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Smart speaker sales booming in EMEA, says IDC

Third quarter saw 3.3m devices shipped in EMEA off the back of strong consumer demand

Amazon accounted for half of smart speaker sales in the third quarter,
Amazon accounted for half of smart speaker sales in the third quarter,

EMEA smart speaker sales boomed in the third quarter of 2018, with 3.3 million devices shipped, according to IDC.

The analyst company said that continued growth in consumer demand, coupled with promotions in Black Friday sales, led to a 116.7% growth in shipments.

The overall market for smart home devices - smart speakers, video entertainment products, connected lighting, smart thermostats, and home monitoring/security products - was up 31.4% in the quarter to 23.6 million units, with double-digit growth in all segments.

"Although Amazon and Google didn't launch their speakers in new markets in the region, their performance was exceptionally good, fuelled by continued growth in consumer demand. In 4Q18, the market will continue to expand, as Google Home enters four new markets and Amazon Echo devices launch in Italy and Spain," said António Arantes, research analyst for smart home devices in EMEA. "Strong promotions during Black Friday continued to drive tracking for smart speakers and the discounts during the Christmas season will further drive strong performance for these products and help increase penetration of intelligent assistants in the region."

The smart home market is forecast to reach 193.2 million units shipped in 2022, with a compound annual growth rate (CAGR) of 19.2% for 2018-2022. Video entertainment (including smart TVs and digital media adapters) will remain the largest product category, but it is expected to lose share to the other product categories. Smart speakers are forecast to represent 23.3% of the smart home market in 2022, the second-largest category, while lighting will come third with 11% share, experiencing the strongest growth, with a CAGR of 43.8% for 2018-2022.

"The growing adoption of smart speakers will become the driving force for the entire smart home market and home automation products," said Arantes. "Voice interaction will be the main interface in the years to come and consumers will increasingly want to control their home devices in this way, resulting in a shift from non-smart devices toward smart devices. Even for mature categories, such as smart TVs, we expect that nearly 50% of new products shipped in EMEA will come with an intelligent assistant platform embedded."

By category, IDC said that Video entertainment products including smart TVs and digital media adapters, such as Google's Chromecast, Apple TV, and Amazon Fire TV, are suffering from longer replacement cycles than other products, accounting for a low 11.2% growth rate (CAGR) predicted from 2018 to 2022.

Smart speakers are expected to become a 45 million unit market by 2022, 23% of the overall smart home device market. Amazon currently accounts for half of all smart speaker devices shipped in EMEA, while Google has slightly over one third of the market. Google devices are expected to overtake Amazon Alexa by 2021.

Home monitoring and security devices, ranging from smart sensors to door bells and cameras, are expected to grow at a five-year CAGR of 20.7% for 2018-2022. This very fragmented category will see consolidation in the next few years, as there are many vendors selling only one product, which is not sustainable in the future. Many players will evolve from individual solutions to a full range of home products as they consolidate.

Lighting and thermostat devices combined represented only 6.8% of the market in 3Q18, but this is expected to grow to 13.6% by 2022. A wide range of low-priced lighting products offered to the market by many new brands will catch consumers' attention and adoption of smart bulbs will increase. Thermostats and lighting devices are also attracting interest from larger players. In 4Q18, Amazon invested in Tado, a German thermostat start-up and competitor to Nest.

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