By the end of 2021, there will be an installed base of 328 million smart speakers and more than 1.13 billion smart electricity, water and gas meters, according to business information provider IHS Markit.
Smart speaker and smart meter are becoming key entry points into the massive Internet of Things (IoT) value chain. The two devices are gaining a foothold into broader ecosystems to maximize growth and revenue opportunities, IHS says.
“No matter the type of ‘smart’ device, device makers face the same challenge: keep costs down while increasing functionality,” said Paul Erickson, senior analyst for connected device research at IHS Markit.
The IoT is transformational for connected devices, and vendors large and small are vying to be part of the market. “Many, like Google and Amazon, are selling their devices at or below margin because they understand the long-term opportunity lies in the applications and services these devices make possible.” Erickson observes.
More Growth Ahead for Smart Speakers
By 2021, smart speaker revenue is expected to reach US$11.2 billion, up from US$6.3 billion in 2018, IHS Markit predicted. “While many options are available to device makers to enter the home ecosystem, the cost and convenience advantages of smart speakers will ensure that demand remains strong for years to come,” Erickson said.
Smart speakers, which enable voice-based media playback, smart home control, telephony, messaging, e-commerce and informational queries, use a range of connectivity options to leverage artificial intelligence (AI) and Cloud capabilities to enable an ever-increasing range of IoT devices.
The smart speaker concept is most powerful when it leverages large, established ecosystems where there is broad app and development support across devices and platforms, Erickson said. “These ecosystems allow the speakers to access diverse information and e-commerce resources and to receive support from other smart home devices.”
Smart Meters Enable More Utility Services
Basic utility meters only monitor power usage, limiting utility companies’ ability to interact with end users. Smart meters expand utility companies’ capabilities by providing more regular and informative data, allowing better usage analysis, time-of-use rates and subsidies, leakage warnings and more.
Smart meters enhance capabilities beyond the “meter to cash’ process,” said David Green, research manager for smart utilities infrastructure at IHS Markit. “Smart meters will be an increasingly critical entry point into utility ecosystems aiming to create more intelligent, efficient and cleaner electricity networks.”
Like smart speakers, smart meters are anticipated to enjoy considerable growth in the years ahead. Over 188 million smart meters will be shipped in 2023, generating US$9.5 billion in hardware revenues, IHS Markit predicts.
In 2023, the installation base of smart electricity, water and gas meters will exceed 1.35 billion. “Smart meters form the backbone of the data collection system for utilities, paving the way for entirely new categories of value-added revenue,” Green added.