Microsoft’s long-anticipated smart speaker, known as Invoke, will be released this fall. The device, which was developed with speaker manufacturer Harmon Kardon, will be able to control users’ smart home devices, stream music, and make Skype calls.
Further, ZDNet reports that Microsoft will release a software developer kit (SDK) for third-party developers to create their own Cortana skills, meaning the device could gain a wealth of capabilities very quickly, just like Amazon’s Alexa did.
Microsoft is entering a crowded and highly competitive space. Amazon released the original Echo in 2014, and it caught on quickly — CIRP estimates that the line’s installed base was 8 million in January, up from 1.6 million last May, based on BI Intelligence estimates. This prompted Google to release the competing Home device last fall. Meanwhile, Apple might unveil a similar, Siri-powered device at its worldwide developer conference in June.
Getting into the smart home market now makes a lot of sense for Microsoft, but it faces an uphill battle if the device is going to be a hit.
- The smart home market will grow steadily in the coming years. The Echo has gained traction at the same time as smart home solutions more broadly have started to take off. Once a novelty that appealed mostly to early tech adopters hungry for the latest gadgets, connected devices for the home will become more popular with average consumers in the coming years — BI Intelligence forecasts that 73 million smart home devices will be installed in the US in 2022. Microsoft is betting on capturing some of that interest.
- But it’s going to be tough for the device to catch on. Cortana is the most technologically advanced voice assistant on the market. But consumers may not know that, or care enough to take advantage — smartphones running Windows have a tiny share of the market, meaning that Microsoft’s user base is mostly confined to tablets and PCs, where voice assistants aren’t popular. To contrast, Alexa and Google are available on a wider set of devices. That lack of visibility could hurt the Invoke speaker, particularly if Apple releases a device this fall or next year, given that its products historically cannibalize the market share of its peers upon launch.
Not that long ago, many home-appliance and consumer-electronics makers were gearing up for what they thought would soon be a rapidly growing market for smart home devices.
The instant popularity of the Nest thermostat, introduced in 2011, seemed toconfirm their hopes. But those expectations were dashed in the coming years as the market for connected home devices later stagnated.
Even with these challenges, many of the biggest consumer technology companies are now moving into the smart home market.For example, Apple, which recently released its self-installed smart home ecosystem, called the Apple Home, traditionally doesn’t move into a market until it’s very mature and only when it can release a perfected product. Further, Google this fall launched the Google Home and its companion ecosystem, hoping to jump into the voice-activated smart home speaker market, which Amazon currently dominates with its Echo product line.
Nicholas Shields, research associate for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on the self-installed smart home that examines the demographics of the average smart home device owner and discuss why current smart home device owners are appealing to tech companies. The report also examines the plans of various tech giants in the smart home market and discuss their monetization strategies, and makes suggestions for how these companies can position themselves to make their products and devices more appealing to the mass market.
Here are some key takeaways from the report:
- Tech companies primarily enter the market to enhance a core revenue stream or service, while device makers desire to collect data to improve their products and prevent costly recalls.
- We forecast there will be $4.8 trillion in aggregate IoT investment between 2016 and 2021.
- These companies are also seeking to create an early-mover advantage for themselves, where they gain an advantage by this head start on adoption.
- Major barriers to mass market adoption that still must overcome include technological fragmentation and persistently high device prices.
In full, the report:
- Details the market strategy of prominent tech companies and device makers, and analyzes why which ones are best poised to succeed once adoption ticks up.
- Offers insight into current ownership through an exclusive survey from BI Intelligence and analyzes what demographics will drive adoption moving forward.
- Explains in detail which companies are poised to succeed in the market in the coming years as adoption increases and mass market consumers begin to purchase smart home devices.
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