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Connected Homes February 2018 Viewpoints

Technology Analyst: Michael Gold

Smart Speakers for China

Why is this topic significant?

Amazon's Echo inspired Google and Apple to develop similar products, leading to a three-way competition. Large companies based in China are now engaged in a similar competition to sell Chinese-speaking appliances, much as China has its own leaders in search engines, e-commerce, and social networking.

Description

Echo and other conversational appliances from Amazon.com are available in more than 80 nations, excluding China. Google Home and Apple's HomePod are each available in a few nations, also excluding China. Signs indicate that China-based companies, not US-based ones, are poised to dominate China's markets for smart speakers, conversational appliances, and speech-based virtual assistants.

The leaders in China's conversational appliance market are Alibaba, Baidu, and JD.com. Each has its own branded devices, cloud-based virtual assistant, and home-automation capabilities. Like Amazon, Baidu and JD.com offerings include models having touch screens, so these product lines are not limited to smart speakers. Also, much like Microsoft, Tencent has a cloud-based virtual assistant that could become the basis for yet another line of hardware products.

Implications

As in the United States and elsewhere, speech-controlled audio playback and e-commerce orders are likely to drive initial demand for China's conversational appliances, with another important business-development driver emerging as users increasingly need simplified, speech-based ways to monitor and control the Internet of Things. Also, as in the United States and elsewhere, a user in China who selects one of the available virtual assistants is likely to have needs thereafter for various connected things. For years to come, the user's subsequent purchase decisions could depend on which available products are compatible with the already selected assistant.

Apple and Google might yet see improved prospects for their speech technologies in China; iPhones and Android phones are common there. But that nation's own technology leaders may have natural competitive advantages in selling products and services that converse in Chinese. Moreover, other nations might represent opportunities for Chinese companies. As a result, whether Alibaba prevails over Amazon in fast-growing e-commerce markets in India could ultimately have large effects on precisely which connected lights, thermostats, and other networked things become popular in that nation, whose population exceeds 1.3 billion.

Impacts/Disruptions

As is occurring elsewhere, China's markets will likely see proliferation of conversational appliances equipped with touch screens (comparable to Amazon's Show and competing devices that Google is reportedly developing), stationary devices that have mechatronic moving parts (comparable to Hanson Robotics' Professor Einstein and Intuition Robotics' announced ElliQ), and mobile robots (comparable to Bosch's Kuri and Sony's Aibo, both of which seem likely to see improved availability in 2018).

Baidu has demonstrated fixed mechatronic conversation appliances and seems determined to integrate speech technologies with robotics. China's Ecovacs Robotics—according to the Straits Times, the world's second largest maker of vacuum-cleaner robots and the one with the largest market share in China—developed the Benebot wheeled robot. Benebot reportedly answers spoken questions, obeys commands, and sees some use in hotels in China. Given the overall current progress in robotics technology and market development in China, mobile robots with conversation capabilities could be a leapfrog technology for that nation, much as it has leaped ahead of others in the domains of text bots, mobile payments, unattended convenience stores, and package-delivery drones.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 5 Years

Opportunities in the following industry areas:

Sensors, speakers, displays, mechatronics, networking equipment, illumination, climate controls, home security, retailing, online-to-offline services, news and entertainment

Relevant to the following Explorer Technology Areas:

Third-Party Hardware for Virtual Assistants

By Sean R. Barulich
Barulich is a research analyst with Strategic Business Insights.

Why is this topic significant?

Manufacturers are releasing new devices with built-in virtual assistants that can introduce new functionality and features for users.

Description

Virtual-assistant developers such as Google and Amazon.com have made efforts to expand the variety of devices with which their virtual assistants can integrate. Recently, Google made efforts to improve third-party access to the Google Assistant virtual assistant by introducing an update to its Google Assistant Software Development Kit (SDK). The update allows third-party manufacturers to integrate Google Assistant directly in devices and enables the creation of third-party "actions"—similar to Amazon's Alexa Skills—that can provide new speech-enabled features for specific devices. For example, Google and various hardware partners including Lenovo, LG, and JBL have released Google Assistant–powered smart speakers that equip touch screens and cameras. These smart displays can respond to users' queries visually as well as through audio, make video calls (through the Google Duo app), and enable the use of apps such as YouTube and Spotify with touch-screen interfaces.

Amazon has also made efforts to increase the types of third-party devices that can integrate directly with its Alexa virtual assistant. For example, Chinese company Ubtech has launched Lynx, a small, 20-inch-tall robot with Alexa built in. The robot can perform all of the tasks that Alexa can but also has a surveillance mode that allows it to detect movement, record video, and send recorded content to users' smartphones.

Some third-party manufacturers are integrating systems with both Google Assistant and Alexa. For example, Panasonic currently supports Google Assistant in its Android-based Skip Generation in-vehicle infotainment technology and plans to introduce Alexa integration in its next-generation infotainment technologies. Another third-party system that may integrate both assistants is the Sonos One smart speaker. Although the higher-end audio smart speaker currently has only Alexa built-in, Sonos plans to add Google Assistant integration sometime in 2018, potentially making it the first smart speaker with support for both virtual assistants.

Implications

By using third-party hardware partners, virtual assistant developers can introduce new capabilities and functionality to their virtual assistants based on particular third-party hardware. For example, smart displays provide new interfaces (other than speech) for users and enable convenient ways for information to be presented. Although third-party hardware can enable new features for users, adding more devices with built-in assistants may make experiences with virtual assistants confusing. As users populate homes with multiple virtual-assistant devices, sometimes it may be unclear which device they want to complete a particular action—particularly if the devices interact with different services. As more devices obtain built-in virtual assistants, it will be important for manufacturers to use technologies—such as Amazon's Echo Spatial Perception—that make sure only the nearest device responds. In addition, contextual understanding capabilities may be important to establish which device is best to handle a particular query or task.

Impacts/Disruptions

In the long term, users may prefer platform-agnostic devices that provide access to both multiple virtual assistants and their respective capabilities. For example, users may want to use Alexa for online shopping but may prefer Google Assistant for general information queries. Alternatively, users may prefer to stay in particular ecosystems because of their familiarity with a particular speech-based interface and its available commands. Licensing issues may frustrate manufacturers' efforts to build devices that can switch between assistants. But if third-party manufacturers do find ways to integrate multiple virtual assistants affordably, doing so may help them remain competitive in this densely populated device ecosystem.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now

Opportunities in the following industry areas:

Electronics manufacturing, software development, appliance manufacturing, cloud services

Relevant to the following Explorer Technology Areas: