July 11, 2017

Can You Hear Me Now? - The Rise of Voice Assistants


2017is predicted to be the year of voice-first devices like Amazon Echo and Google Home. Voice assistants, or smart speakers, have fast become the trend in the tech world. According to ComScore, by 2020, 50% of all searches will be done by voice.


It started when Apple released Siri in 2011, which was not only able to recognize speech, but understand information and come up with answers. This was followed in 2014 by Microsoft's digital personal assistant, Cortana. In November of the same year, Amazon announced the release of the voice speaker, Echo, which is powered by Alexa and has come to include the Echo Dot and Tap. Not to be left behind, Google introduced its answer to Amazon's Echo, Google Home, and yet to be released late this year is Apple's HomePod. The war for the voice assistants has heated up and many more devices are yet to be seen.


Gartner predicts that 30% of our interactions with technology will be through conversations with smart machines, so it's easy to see why each manufacturer is trying to gain control over the voice assistant market.


Stats on AI, Voice Assistants



Voice has become a gold mine for activity, AI is growing Stronger

Using your voice to give commands or get information has become a gold mine of activity. You may use your voice assistant to perform simple tasks like playing music or turning on lights; however, there's so much more that it can do. Take into consideration that Alexa alone has tens of thousands of skills, so there's a myriad of commands you can learn to interact with voice assistants.


What first started with voice assistants on phones, such as with Siri, has evolved to voice assistant devices for homes. These devices have at least one thing in common, to provide assistance for countless tasks, all by using one's voice.


The role of AI is becoming so strong that tech industry leaders like Bill Gates and Elon Musk believe that it could become a threat to humans. These machines have the potential to become "smarter." AI, which will become faster, more intelligent, and more like humans, however, doesn't only refer to voice assistants. Other applications include self-driving cars, customer service, concierge services, consumer behavior, smart home technologies, and in medicine. Recently, Google Home called the police when a couple was allegedly involved in a violent domestic dispute.


The holiday season in 2016 was amazing in terms of sales of Voice Assistants.



The evolution of voice recognition systems

APPLE

A big difference in the voice recognition space is that Apple, who usually comes late to the party and takes on an established market, came in first with Siri. It wasn't long after that others ploughed in to the market after Siri was originally released which really took Apple by surprise. Today, speech recognition has become a billion-dollar industry according to CNN. It is not only available for mobile devices like Android, iOS and Windows Phone, it's also integrated into software products like Microsoft Windows and car technology.


Apple jumped into the smart speaker market that is already led by Amazon and Google by announcing HomePod that will be available by December 2017. Not only does it give users access to Apple Music through voice interaction with Siri, it is also able to analyze music and adapt to what is being played to provide the best sound possible. Like the Amazon Echo and Google Home, HomePod has other functions like answering questions and controlling your smart home accessories — all through voice commands.


The ecosystem is certainly expanding with more and more devices. Each device claims to do more, do things better, do things faster, and do things more accurately than the other. Home automation with IoT has been a growing market as well. IoT based home products and services include not only voice assistants, but other AI assistants like wi-fi sprinkler controls and thermostats, appliance and light controls, keyless door locks and doorbell cameras, and even devices that allow you to control home electronics from anywhere.


AMAZON

Amazon launched the smart speaker, Amazon Echo, in 2014. The device could play music, create to-do lists, set alarms, play audiobooks, control smart devices, and provide real-time information like weather and traffic — all through voice commands. In 2016, two years after Echo was released, Amazon introduced the smaller version, the Echo Dot. Designed to be used in smaller rooms, it has all the same functionality as the original Echo. Moreover, Amazon recently introduced Tap, a portable, battery-operated speaker with the same functionalities as the two Echo's. Just last month, Amazon launched the Echo Show that has a screen as well.




Compared to other voice assistants, the Amazon Echo has been the most successful. Not only was it the first to be released, but it's tie to Amazon gave it a great deal of exposure to millions of consumers who shop on Amazon.com. Alexa has taken the voice assistant market by storm with crowd sourcing of Alexa Skills. These skills that make Alexa "smarter" are developed by people through Amazon's Developer Portal and can handle anything from simple to complex tasks.


Though very successful with crowdsourcing the Alexa Skills, the number of data sets that Amazon could offer is still less. The data sets that Amazon has are centered on shopping, playing music and the usual tasks, their range of success is slower. However, that can all change when they get more data sets. More data sets, means more capabilities.


Amazon has also opened up Alexa for 3rd party OEMs to create more solutions and devices which has helped them build on their skill sets.


GOOGLE

Google is another prominent player in the battle of voice AI assistants., They have been investing in voice assistance for a long time. However, they did not see this market expanding as fast as it did. Introduced in 2016, Google Home, powered by the Google Assistant, competes for superiority mainly against Amazon's Alexa. One of the main reasons that Google Home has been successful is because Google already has access to a variety of data sets, like maps, shopping and content.


A critical factor in Google Home's success is that Google already knows so much about its users. Its search capability and voice control is also superior. Moreover, with Chromecast Audio, users can stream the same song or podcast to speakers in different rooms simultaneously using voice commands — a feature that Alexa doesn't have.


Others

Other companies are joining the smart speaker bandwagon mainly after seeing the success of these devices during the 2016 holiday season. This include Samsung's Bixby and Microsoft's Cortana. At the 2017 International CES, there were many voice assistants — and many were from Chinese OEMs and local vendors. One of China's largest smartphone makers and the world's third biggest smartphone manufacturer, Huawei, is currently working on creating its own voice assistant specifically for China. Other vendors include Beijing LingLong (Ding Dong), Fabriq (an Alexa enabled speaker), Harman Kardon (Ivoke), Invoxia (Triby), NVIDIA (Shield), Jam Audio (JAM Voice), Lenovo (Smart Assistant), Cubic Robotics (Cubic), Mattel (Aristotle), Mycroft, Sony (Xperia Ear), Swan Solutions, Silk Labs (Sense), Protonet (ZOE), Interactive Voice, and SPACO.

The obvious result is that the market will get even more crowded with all the other manufacturers wanting a piece of the action. However, this isn't necessarily a bad thing. An advantage to having other players is they add value to the AI Assistant ecosystem. Specializing in specific tasks, like the Aristotle that functions as a baby monitor and a learning toy, will help targeting specific consumers.

Our Take on the Products: A Competitive Analysis


Other Important aspects that play a role

Geography also plays a role in the rise of voice and AI assistants. According to a report published by Beige Market Intelligence, in 2016 North America was the largest geographical market for smart voice assistant speakers worldwide, accounting for market share of 93.58% in terms of unit shipment and 92.98% in terms of value and is expected to remain the market leader through 2022.


On the other hand, China has a growing smart home market. Beijing LingLong Co.'s DingDong, although able to understand Mandarin and Cantonese, faces a challenge when it comes to understanding all the different accents and dialects.


Connectivity also plays a role in voice assistants as all these devices need to get connected to their respective network servers for voice and data processing. Hence for geographies where connectivity is an issue, these devices will not be useful.


Language is another factor that needs to be taken into consideration. Right now, with the exception if Siri, which "speaks" 21 languages, English is the predominant language these devices "understand." Therefore, it still remains to be seen who will win the race for voice assistants to cover other languages to capture the global market.


As popular as AI Assistants have become, there's always the drop off of usage that is common with new tech gadgets. One of the reasons for the drop off may be that there is not enough repeated usage. For example, an app may be downloaded but it will only be used once. Likewise, a function, such as asking the assistant to read the news, may not be something that is done on a regular basis. In other words, these assistants are being used for different tasks, just not repeatedly. Another reason may be that consumers purchase assistants out of curiosity and find it's not a gadget they need to use on a daily basis.



Retention strategies for these OEMs include:


By utilizing dynamic ad insertions, app creators can make a profit through ads targeted to individual users. Video advertising, which reaches audiences using several platforms, including web pages and smartphones, is another way to make money with your app.


  • Finding ways for skills and apps to be used more consistently

  • Marketing devices as a gadget for the mass market and having consumers not consider them as a novelty item, but rather as a need

  • Making it simpler for consumers to setup and control multiple devices

  • Creating devices that are compatible with each other


Our Take

It's safe to say that most everyone has had some sort of interaction with Siri, Home, Echo and Echo Dot or at least knows someone who owns at least one of these devices. There was much hype when the first voice assistant, Siri, was released, and we were amazed by all that it could do. Today, Siri and Alexa have become household names, with some relying on these assistants to perform daily tasks. However, after about a 60-day period, it seems these devices lose their cool factor. Manufacturers made similar devices and it's possible that the device you chose depended on your allegiance to Google or Apple.


AI, although it has seen many advances, is still in its infancy. With Siri only having been released less than 10 years ago, there is much that remains to be seen in the world of Artificial Intelligence. For Voice Assistants to succeed and continue to interest consumers, they need to be integrated with more data sets, become more conversational and predictive. Devices can be improved so they have more of a human quality that potentially results in a more human-like conversation. The challenge will also be to become real assistants in the sense that they should have to ability to help us before we ask for help. It will certainly be a challenge, but AI has already come so far, why not push it further?


Based on our experience — we think that Amazon & Google will continue to be leaders in this market — as they have invested a lot of time and money on Voice, Natural Language Processing and artificial intelligence. Google stands tall in terms of Datasets that it has and has acquired over the years, but Amazon's approach to crowd sourcing datasets and maybe M&A's in the near future will be a force to reckon with. It's going to be an interesting next few years.

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This post was written by Asokan Ashok, the CEO of UnfoldLabs. Ashok is an expert in driving customer insights into thriving businesses and commercializing products for scale. As a leading strategist in the technology industry, he is great at recommending strategies to address technology & market trends. Highly analytical and an industry visionary, Ashok is a sought after global high-tech industry thought leader and trusted strategic advisor by companies.

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