If you are wondering why companies like Amazon and Google put so much time and energy into smart speakers, just look at the numbers. Sales of voice-activated speakers will add an incremental $1.6 billion to the US technology industry through 2019, in part because they tap into the growing smart home market, according to data by The NPD Group.
“While many new households will explore the smart home experience in the next two years, propelled by the growing ownership of voice-activated speakers, the biggest and best opportunity for retail may remain in encouraging the installed smart home base to make incremental device purchases, and to then provide services to help consumers fully leverage the technology in their smart home," stated Stephen Baker, vice president, industry advisor for The NPD Group.
Baker points to the opportunity for hardware makers to sell networking equipment, particularly mesh networking gear, as consumers look to upgrade their home networks to support all these smart devices. So, it is not just smart speaker makers that stand to benefit.
That said, smart speakers can be the hub of a smart home. For example, Amazon's Echo speakers with Alexa integration are capable of controlling smart lighting, smart door locks, and so forth. More skills are being added all the time, too.
Alongside voice-activated speakers, The NPD Group expects sales of home automation devices to add $1.7 billion to the technology industry, on top of the $1.6 billion from just the smart speakers themselves. According to the research firm's data, 19 percent of consumers plan to purchase a home automation device in the next 12 months.