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Connected Homes March 2020 Viewpoints

Technology Analyst: David Strachan-Olson

Smart-Speaker Use Cases

Why is this topic significant?

Many US homes now have smart speakers with digital assistants, but companies are struggling to leverage speakers that users have already installed to create new revenue streams.

Description

Amazon.com and Google have both had massive success in selling smart speakers to homeowners during the past few years. A recent Edison and National Public Radio study found that during the past two years, the total number of smart speakers users installed in the United States increased from 67 million to 157 million and that one in every four US adults now owns a smart speaker. Smart-speaker adoption in China also increased significantly in 2019, with Baidu, Alibaba, and Xiaomi each selling millions of devices.

Although device adoption is high, users seem to use smart speakers for only a limited set of tasks. A 2019 survey of US smart-speaker users by Voicebot.ai found that users performed three main actions primarily: ask a question, stream music, and check the weather. For these three actions, the survey found that more than 80% of smart-speaker users had ever attempted the action and that more than 60% of users performed the action monthly. In comparison, only 46% of smart-speaker users used a smart speaker to control a smart-home device, with 33% performing this action monthly. One of the least-used actions was making a purchase. Only 26% of smart-speaker owners had ever made a purchase using a smart speaker, and only 15% do so monthly.

Implications

Although companies have encouraged adoption of smart speakers successfully, the benefit to companies of widespread device deployment and the development of voice platforms remains uncertain. Both Amazon and Google have undoubtedly spent significant resources to develop digital assistants and voice platforms. These companies make a profit on selling hardware (even discounted hardware) but are likely going to try to find new ways to leverage in-use smart speakers to create new revenue streams. However, the path to a successful revenue stream is still very unclear.

Many of the most common tasks (asking simple questions, streaming music, checking the weather, and setting a timer) are not prone to monetization. Several companies (likely including Amazon) hope that smart speakers will become a platform for e-commerce and effortless voice shopping, but the survey indicates that users are not interested in shopping by voice. Likely, users want to see items before purchasing and want to compare prices easily. Amazon and Google are also encouraging the development of app marketplaces that allow users to purchase and install specific apps. An app store could provide Amazon and Google with revenue, but the problem of app discoverability on a voice platform hinders users from installing new apps. Of course, one of the most likely revenue streams for voice platforms will be ads that populate the open-ended searches users request. Such ads might appear as part of the assistant's response or in results sent to a user's devices.

Impacts/Disruptions

Developing a successful monetization strategy for digital assistants and voice platforms is a challenge for companies. Amazon appears to be finding success by encouraging Alexa owners to purchase smart-home devices on Amazon.com. Continued difficulty in monetizing voice platforms could lead companies to implement voice assistants purely to add to the utility of software rather than to generate new revenue. For example, Microsoft is pivoting Cortana into a digital assistant that functions as part of its Microsoft Office products.

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 to 5 Years

Opportunities in the following industry areas:

Smart speakers, digital assistants, voice platforms, v-commerce, music streaming, smart-home devices, software services

Relevant to the following Explorer Technology Areas:

8K Televisions Are Becoming a Reality

Why is this topic significant?

Although 8K televisions are beginning to become widely available at reasonable premium prices, the ecosystems necessary to provide 8K content are still in their infancy.

Description

An emerging display format that offers approximately 8,000 pixels across the horizontal dimension of a display, 8K resolution offers 4 times the number of pixels that 4K resolution does and 16 times the pixels that 1080 resolution does. (The resolution is commonly 7680 × 4320 pixels.) Prior to 2020, only a few 8K TVs were available commercially, but at CES 2020, several TV manufacturers demonstrated multiple commercial 8K TVs ready to go on sale in 2020. Samsung will offer three TV series with 8K resolution (from 55 inches to 98 inches), LG has eight 8K models (from 65 inches to 88 inches), Sony has two models (75 inches and 85 inches), and TCL has also announced plans to launch an 8K TV this year.

TV manufacturers might be ready to sell 8K TVs, but ecosystems to support 8K content are considerably behind. Although 8K TVs can upscale 1080p and 4K content in real time, that does not provide as high-quality an experience as native 8K content. In late 2018, Japanese broadcaster NHK launched an 8K TV channel, but the service is available only in Japan. Both YouTube and Vimeo support streaming 8K content, but the content selection is very limited. Currently, no major streaming service offers 8K resolution, and no physical-media format for 8K video has emerged. Both Sony and Microsoft have announced that their next-generation game consoles—the PlayStation 5 and Xbox One X, respectively—will support 8K output for both video streaming and gaming. The HDMI 2.1 standard, which arrived in 2019 and can support up to 8K resolution at 60 hertz, should play a major role in future hardware devices capable of delivering 8K content to 8K TVs.

Implications

Although television manufacturers—Samsung in particular—seem set on commercializing 8K TVs, the benefit of 8K resolution for most homes is uncertain. For a true benefit from 8K resolution, TV watchers might need to sit uncomfortably close to the TV or have a very large TV (75 inches or larger). TVs have already received a significant resolution bump with the transition from 1080p to 4K. Some entertainment stakeholders and TV reviewers have suggested that TV manufacturers should not focus on 8K and should instead focus on improving other TV specifications—including high dynamic range, color spectrum, and contrast—and add variable refresh rate and other new features to TVs. In the coming years, 4K TVs will remain the TV of choice for most people, but 8K TVs could begin to compete in the premium TV segment as prices fall below $3,000.

Impacts/Disruptions

If companies can successfully market and sell 8K TVs to new users, content and streaming companies will experience pressure to adopt the standard. Streaming 4K video already requires a connection of about 20 megabits per second. Likely, improvements in 8K video compression will obviate a quadrupling of network use, but 8K streaming could still require a doubling in comparison with 4K (up to about 50 megabits per second). Such an increase in data throughput would begin to push the current limits of many residential data connections and could cause users to exceed internet-service providers' monthly data caps.

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:

Film and television production, television broadcasting, streaming services, television manufacturing, display-panel manufacturing, video games

Relevant to the following Explorer Technology Areas: