The smart speakers market is mainly driven by the growing demand for multimedia content from consumers in urban areas, as smart speakers provide considerable enrichment to the quality of the viewing experience. 
What are smart speakers?
Smart speakers are speakers equipped with connectivity to enable connections with electronic devices such as smartphones, laptops, and smart TVs. Smart speakers incorporate Bluetooth, WiFi, or other forms of short-range connectivity to establish a connection with the user’s desired product, and stream the audio generated in the product to enable louder and clearer audio output than is possible with other, non-dedicated consumer electronics. The growing use of smartphones for media consumption has been a major driver for the smart speaker market, as even the most advanced and audio-centric smartphones can’t provide the audio capability that a dedicated speaker can provide, especially in the field of enabling solid bass and allowing significant clarity of different sounds in the audio stream.
Smart speakers are powered by AI assistants, such as Amazon’s Alexa, Google’s Assistant, and Apple’s Siri. These systems are enabled with speech recognition abilities to understand the commands given by the user and take the respective action. The AI in smart speakers works in a similar manner to how the AI operates in smartphones or smart TVs. The rapid development in the field of speech recognition, natural language processing, and microphone technology has been a vital driver for the smart speakers market, as it has served to make the AI running the smart speakers more powerful and capable than ever before.
What are the Major Drivers for Smart Speakers?
The growing disposable income of urban consumers is the major driver for the global smart speakers market. This has resulted in a growing interest in smart speaker technology, as many users now use their smartphones for media consumption and are unsatisfied with the audio quality served up therein. The growing demand for smart homes, itself dependent on the rising disposable income of customers, is also a major driver for the global smart speakers market. Smart speakers are increasingly being used as a part of smart home systems, as they can also connect with other smart infrastructure in the house and enable voice-operated operation of smart home elements such as lighting and HVAC.
Smart homes have become widely popular in developed economies such as the U.S. and Canada, leading to growing demand from the smart speakers market. Developing countries such as China and India are also likely to exhibit a growing demand for smart home systems over the coming years, leading to a growing demand for smart speakers. This is likely to be a major driver for the global smart speaker market over the forecast period.
What about Data Security?
That, in a nutshell, is the problem with smart speakers. While smart speakers have delivered immense enrichment to users in terms of being able to access rich audio content and being able to control a smart home system with voice activation, the ability of smart speakers to record conversations in the house where they are used has not gone unnoticed.
In May 2019, the California Assembly passed a law to make it compulsory for smart speakers to get consent from the user to record ambient sounds. Smart speaker systems currently have the ability to record conversations and other ambient noises in their household at any time after being powered up by certain trigger words, allowing further usage of the voice recordings in commercial applications without the user being any the wiser. While tech companies claim that the recordings are only used to improve the quality of the smart speaker platforms, this has not gone down well with lawmakers and individual owners, who, perhaps understandably, are not comfortable with the idea of their private conversations being recording and used, for whatever purpose, without their consent.
While customers are able to delete the recordings in a smart speaker system whenever they want, their presence in the first place has caused considerable controversy. This is likely to be a key feature of the global smart speaker market over the coming years as smart speaker technology becomes prevalent in other areas of life such as autonomous vehicles, allowing even deeper intrusions into how the users live their lives.
The Figures
The global smart speaker market was valued at USD 1.94 billion in 2017, according to Market Research Future (MRFR), and is expected to rise to a value of USD 11.57 billion by 2023 at a CAGR of 34.7% between 2018 and 2023.