Google vs. Amazon – Speaker stats.

Finally, some good news for Google.

• Smart speaker shipments for Q4 18 show that Google has made up some ground on Amazon, but it has a very long way to go before it can have any real hope of offering a real challenge to Amazon in the smart home.
• 2018 has largely been a year of disappointment for Google as during the first three quarters it lost all the momentum that in gained in 2017.
• However, Strategy Analytics data (see here) indicates that in Q4 18 Google’s market share rose from 22.8% in Q3 18 to 30.0% in Q4 18 in a market that grew 70% QoQ to 38.5m units.
• Amazon also gained share to 35.5% but the gap from Amazon to Google is down to 5.5% points from 9.0% points in Q3 18.
• A lot of this share gain came from the weakness of the Chinese players who all lost share on a global basis most likely due to the overall weakness in consumer electronics coming out of China.
• Consequently, I suspect that if one looks at the numbers excluding China (where Amazon Echo and Google Home are not for sale), one will find that Amazon’s share has not materially increased and that Google has made up some ground.
• Apple’s HomePod also saw a pick-up in shipments to 1.6m but because it is only present in the highest tier of the market, it too lost market share.
• Hence, the real news here is that the smart speaker market is still growing strongly, is dominated by cheap hockey pucks, where Google has finally made up some ground and that shipments of smart speakers with screens are finally seeing some traction.
• Here I think that Google has a huge advantage as screens in the kitchen will be used for video calls and watching recipes.
• Both Amazon and Google have video calls covered but without YouTube, Amazon is severely hampered.
• Hence, Google should do better in this segment but it is a small leaving the advantage squarely with Amazon.
• Furthermore, Amazon’s acquisition of Eero should help it tie the whole smart home offering together giving it a further boost to make up for the fact that when it comes to the intelligence of the assistant, Google remains way ahead.
• The net result is that while this is finally a bit of good news for Google, it has a very long way to go and these sort of market share gains can prove to be quite fleeting.
• Consequently, I still think that Amazon has the edge and I am looking at a repeat of the VHS vs. Betamax battle in the smart home.
• I still can’t get behind Amazon’s valuation and would stick with Google over Amazon any day of the week.