Antonio Arantes
Antonio Arantes (Senior Research Analyst)

Voice Summit 2019 took place on July 22–26 in New Jersey. In the smart home space, voice is one of the key elements of a unified ecosystem, facilitating device control and interaction.

Within the wide portfolio of smart home hardware, smart speakers are usually the first entry into the space. In Europe, the smart speaker market is less than three years old, registering a growth of 526.7% from 2016 to 2017 and 90.2% from 2017 to 2018, with 16 million units shipped in 2018. The first question before buying one of these devices is which one — Amazon Alexa or Google Assistant?

Amazon Alexa – The Pioneer

Alexa and the first Amazon Echo were released in the US in November 2014 for Prime members only. It took almost two years for Amazon to release a smart speaker in Europe (September 2016), debuting with an English version in the UK and a German version for Germany and Austria. Since then, Amazon has also released local-language devices in France, Italy, and Spain.

Google Assistant

Though Google Voice Assistant was released in May 2016 through a mobile app, it was only at the end of that year that Google released its first smart speaker: the Google Home. In Europe, the first devices were launched in the UK in the second quarter of 2017 and in Germany and France in the following quarter.

Taking advantage of having Google Assistant in a range of devices, from smart TVs to Android mobile phones, Google was able to gain rapid traction; its smart speakers are now available in 10 European countries.

The Competition

Amazon and Google are putting a lot of effort into the race to be the smart home market leader. This applies to the full range of smart home devices, and not just smart speakers.

Both brands know that voice assistants are a good way of getting information on consumer behaviuor and purchasing trends. Research shows that when consumers make their first smart speaker choice, they become bonded to an ecosystem that will determine their preferences for further smart home purchases… so Google or Alexa?

With this in mind, Amazon and Google have been in a constant price and promotions war. Of course, as they try to strengthen their position and increase their penetration across Europe. Both offer a similar range of smart speakers. From the smaller (and best-selling) versions, to regular speakers and smart displays. These are the most recent addition to the vendors’ portfolios.

However, their strategies have been different. Amazon has been trying to increase its device capabilities and expand the use cases for its smart speakers. For example, Improving Alexa’s skills in each of the existing languages and promoting the ongoing development of new skills has also enhanced the end-user experience.

Google is much more focused on developing new languages and entering new countries, working on the basic commands and questions for smart speakers.

From 2016 to 2018, Alexa was the best voice assistant in Europe, making Amazon the leader of the smart speaker market. The market is currently driven by the first-entrant advantage: the first voice assistant that enters a new market automatically establishes a lead in that location.

As both tech giants move to new geographies, managing the supply chain and new launches can be challenging. Even Amazon, which had the first-entrant advantage in the UK and Germany, the two biggest markets in Western Europe, has had its share of problems. These included supply issues with Echo devices and Google’s expansion into new countries (enabling Google to gain the top spot in the market in 1Q19).

The Voice Assistant’s Market

The two leading suppliers also face competition from other players. Traditional technology players (i.e. Sony, LG Electronics, and Lenovo) and regular speaker makers (i.e. JBL, Sonos, and Bose) also launched devices. Though they have only a small share of the market, these players are more focused on sound quality. Also, they have partnered with either Amazon or Google (or both) to use their artificial intelligence capabilities.

Amazon and Google, of course, want to be available in as many devices as possible to maintain their leading positions. Even though they could try to get exclusivity from one of the third-party manufacturers, the first smart speakers enabling both Amazon and Google Assistant were already launched in 2Q19.

Being able to choose which voice assistant to use will be crucial, as this will be the hook to lock consumers into one voice assistant and one ecosystem from day one.

There are other voice assistants in the European market. For example, Apple’s Siri and the HomePod smart speaker; or Samsung’s Bixby, which is expected to arrive in Europe later this year. But the space is still heavily dominated by Alexa and Google Assistant.

Though they have different strategies, IDC still expects both of them to expand to new countries over the next few years, enabling new languages and more capabilities, and democratizing the interaction with electronic devices through voice. IDC expects the market to grow to 43 million units shipped in 2023 in Europe, with a CAGR of 21.93% from 2018 to 2023.


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