Voice Assistants: A Big R&D Bet Which People Rarely Use
Big tech would really like you to engage with their products using your voice.
Firms like Google (NASDAQ:GOOGL), Apple (NASDAQ:APPL), and Amazon (NASDAQ:AMZN) have collectively spent tens of billions of dollars perfecting the technology that allows their gadgets to listen attentively for your voice, understand your commands, and respond obediently.
The problem? People just aren’t that enthusiastic about it.
A recent survey by market research firm SUMO Heavy has found that approximately 30% of US adults are active users of voice assistants. 46% say they never use them, while 19% use them rarely.
As far as the device type, the bulk (49%), use voice assistants with their smartphone, followed by smart speaker, and then PC.
Those that do use voice assistants on their smartphone tend to be iPhone users. While technically Siri and Google Assistant are effectively equal, iPhone users simply feel more comfortable with voice assistants. This could be because iPhone users are usually older, and the Android world has a much larger install base of low-end phones.
Compared to smartphones, the active user base of smart speakers is small. This is likely because people are buying speakers for other functionality first -- sound quality Bluetooth connectivity, or aesthetic designs and simply don’t know (or don’t care) about its voice-activated capabilities.
Alla Capella Commerce
The fact that people aren’t really interested in voice assistants, and when they are Apple dominates, is a big expensive problem -- particularly for Amazon and Google which are invested heavily in this as well as the advertising industry.
While how much big tech has spent on R&D for voice assistant platforms is tough to quantify, Amazon is said to have spent $22.6 billion in 2017 on overall R&D (across the entire company) and has 10,000 employees working full-time on Alexa.
The light at the end of the tunnel is the voice assistant commerce market: Alexa could generate more than $5 billion per year in revenue by 2020, per RBC Capital Markets, and the advertising market, which covers the entire ecosystem (not just Alexa) and is believed to be worth $19 billion globally by 2022 according to Juniper.
For this market to come close to hitting forecasts, people are going to need to start using their voice assistants more to buy. SUMO Heavy’s data says that only 17% of all users had “browsed or shopped products using a voice-activated assistant.”
However, among the weekly or daily voice assistant users, which are mostly iPhone users, 42% said that they had used it to shop. The problem is Apple isn’t reliant on funnelling users to a market place or online store the same way that Amazon or Google are, which have both bet big on this technology as another channel for sales.
It could be that big tech has already spent so much on this technology that it simply can’t abandon its efforts. But the reality is, people are still hesitant of this technology and skeptical to use it to replace what could be done with a few clicks or taps. Until the industry figures out a way to bypass this fear, Alexa, Siri, and Google Assistant will stay silent more often than not.
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