The connected speaker market - France

1.2 A fast-growing global market

In ****, the total number of smart speakers sold is *** million units, an increase of **% on **** and ***% on ****. According toOmdia forecasts, the total number of smart speakers in circulation will reach ***.** million in ****.

Number of connected speakers World, ****-****, in millions of units Source: ****

The size of the global connected speaker market reached $* billion in revenues in ****, an increase of **.*% between **** and ****. In * years, between **** and ****, the market has more than doubled, growing by +***%. According to forecasts by Fortune Business Insight, the sector's sales are expected to reach $**.** billion in ****, representing a CAGR of **% between **** and ****. Global smart speaker market size World, ****-****, in billions of dollars Source: fortunebusinessinsights ; IHS Markit ; Alliedmarketresearch The leading market is North America, with **.*% market share. [***]

1.3 French market also on the rise

The connected speaker market is a very young one, since the first smart speaker has been on the French market since August ****, it was the Google Home[***].

According to a Hadopi study conducted jointly with CSA in ****, the French connected speaker market will continue to grow strongly and reach a penetration rate of **.*% in ****, more than * times higher than in **** (***). The penetration rate was **% in ****. evolution of the connected speaker penetration rate France, **** - ****, in Source: Hadopi-CSA To estimate the French installed base, we performed the following calculation: number of households in France * connected speaker penetration rate * averageaverage of connected speakers among connected speaker owners This formula gives : ** million * *.** * *.* = *.* million We therefore estimate that in ****, *.* million connected speakers were in circulation. If we take into account the penetration rate forecast in the Hadopi - CSA report, this figure should more than triple by ****, reaching **.* million.

"Connected speaker "park France, ****-****, in millions of units Source: ****

From the data in the previous graph, we can calculate the volume of connected speaker sales for year n by subtracting the total number of connected speakers for year n by year n-*.

Smart speaker sales volumes France, **** - ****

The following graph shows estimated sales ...

1.4 The French market is dominated by foreign brands

The French smart speaker market is almost exclusively made up of foreign brands. The vast majority of speakers come from American brands (***). Wizzili offers a voice assistant designed primarily for family use. Meanwhile, French company LinTo, in a slightly different register, offers a voice interface aimed at businesses.

Market share of the main connected speaker manufacturers World, ****, in Source: ****

2.1 Demand for connected loudspeakers versus other information and communication terminals

The use of connected speakers more than doubled between **** and ****. In fact, the proportion of the French population aged ** and over having used a connected speaker in the last six months rose from *% in **** to **% in ****. [***] This sharp rise can be explained by the confinements of ****, increasing the time spent in the home and therefore proximity to this equipment. It is interesting to note that the most widely used devices are the smartphone (***) and the computer. The tablet, which is a relatively new piece of equipment on the market, like connected speakers, has seen its proportion of the population having used it in the last * months increase by *%.

Use of the following equipment in the last six months France, ****-****, in Source: ****

In addition, the rate of connected speaker equipment more than doubled between **** and **** among the over-**s, rising from *% to **%. Apart from the connected speaker, the only other item of equipment to see its rate increase is the tablet.

Home computer, tablet and connected speaker equipment rates France, ****-****, in Source: ****

2.2 User profile: young, urban consumers

Access to a connected speaker is highest in the**-** age group (***). The share of access then decreases with each category, with **-** year-olds having access for a quarter of them in ****, **% among **-** year-olds, then **% and *% among **-** year-olds and **+ year-olds. the proportion has particularly increased between **** and **** among **-** and **-** year-olds, with younger age groups accounting for most consumers of this technology.

Access to a connected speaker at home, by age France, **** - ****, in % Source: ****

Overall,in ****, all categories have a similar rate of access to a connected speaker (***), unlike in **** when high-income earners had access to a smart speaker for **% of them, while low-income earners were only *%. Connected speaker consumption has become uniform across socio-professional classes.

Access to a connected speaker at home, according to standard of living France, ****, in Source: ****

In ****, residents of the Paris conurbation had the most access to a connected speaker, and rural communes the least. However, the proportion has more than doubled in rural communes, rising from *% to **% between **** and ****, with the Paris conurbation recording the biggest increase (***) between the two years.

Access to a connected speaker at home, by place of residence France, **** - ****, in Source: ****

In their report, Hadopi and ...

2.3 Changing consumer habits

Voice assistants: Voice assistants are the main component of the connected speaker, along with the speaker itself (***). Connected speakers come fourth, accounting for **% of voice assistant uses.

Rate of use of voice assistants France, ****, in Source: ****

Connected speakers: Connected speakers are widely used to search for information. The main information-seeking queries concern the weather (***). The following graph shows other frequent uses of connected speakers. Connected speaker uses for finding information France, ****, in Source: Hadopi-CSA Connected speakers are also widely used for culture and media consumption. The main requests related to culture and media concern listening to a radio (***). Connected speaker usage for Culture and Media France, ****, in Source: Hadopi-CSA What's more, **% of users are using their connected speaker for home automation uses in **** (***). [***] Smart speakers are most often placed in the living room of the home, which is why, among connected speaker users, **% have placed it in the living room or dining room. The bedroom and kitchen are the other most frequent locations. Location of the speaker in the home France, ****, in Source: Hadopi-CSA Some owners of connected speakers have more than one. On average, they own almost two (***). The following graph shows the proportion of owners who own several speakers. Number ...

2.4 Strong seasonal demand

The graph below represents the proportion of searches for a given keyword in a specific region and for a specific period, in relation to the time when the rate of use of this keyword was highest (***). Here, the keyword is "connected speaker", the region "France" and the search spans the period August **** to December ****. Values of *** were reached in the week of November **, ****.

Search interest for the term "Connected Speaker" France, **** - ****, in Google Trends index Source: ****

We can see that activityis highly seasonal, with a peak of interest during the festive season.Product-related internet searches peak in November and December, before dropping off sharply. We can deduce from this that speaker consumption increases in the run-up to Christmas, and is seen as a potential gift. We can also deduce that Black Friday (***) catalyzes the number of searches for connected speakers. Indeed, Amazon takes advantage of this day to offer strong promotions on its products, notably its "Echo" range of smart speakers. [***]

3.1 A market structured around a few digital giants

Value chain for connected speaker manufacturers (***):

Smart speaker brands are primarily concerned with design, marketing and productcommunication . Production is often outsourced to subcontractors. [***]

Distribution then takes place through a variety of channels, including in-house sales in the brand's own boutiques, in specialist or mass-market stores, or on e-commerce platforms.

The following table lists the various players in the connected speaker market. We can distinguish between companies that manufacture connected speakers alone, companies that offer a voice assistant and an associated speaker, publishers of applications compatible with this type of speaker, and companies offering hardware that can be connected to smart speakers, mainly for home automation use.

The strategies and challenges of the various players vary according to their offerings:

Connected speaker manufacturers:

These are manufacturers of smart speakers supplied with the same brand's voice assistant, as is the case for Google, Amazon and Apple, for example.This market is highly concentrated, with only a handful of players - the American and Asian digital giants - sharing market share. These digital giants have a global approach, in which the connected speaker is just one component of an ecosystem based on a user account, and where the main issue is data collection.

Naturally, ...

3.2 Largely foreign production

Connected speakers on the French market come overwhelmingly from American brands (***). [***]

However, we can see from the table below that since ****, Amazon, which very clearly dominated the market with three quarters of sales in ****, now only has a quarter of the market in ****, although still the leader. What's more, Asian brands have been steadily gaining market share. Indeed, they have gone from **.*% market share in the first quarter of ****, to **.*% share in the first quarter of ****. Baidu is the leader among Chinese brands, with **.*% market share in Q* ****.

Apple, which launched its first connected speaker model in the second quarter of ****, rapidly increased its market share to reach its peak (***) in the second quarter of ****.

On the other hand, the market share of "others", which includes all other brands offering a connected speaker, has increased significantly since ****, rising from *.*% in the second quarter of ****, to **.*% in the second quarter of ****, testifying to the gradual emergence of new players on the market.

The following table shows the market shares of the main players, in % :

Q* **** Q* **** Q* **** Q* **** Q* **** Q* **** Q* **** Q* **** Q* **** Amazon **.* **.* **.* **.* **.* **.* **.* **.* **.* Google **.* **.* **.* ** **.* **.* **.* **.* **.* Baidu * * *.* *.* **.* **.* **.* **.* **.* Alibaba * *.* **.* *.* **.* *.* **.* **.* **.* Apple * * *.* *.* *.* *.* *.* *.* *.* Xiaomi * * **.* *.* **.* *.* **.* *.* *.* Other *.* **.* **.* **.* **.* **.* **.* **.* **

Source: ****

3.3 Digitalized distribution

E-commerce is becoming essential:

The distribution of smart speakers is close to the distribution trends of consumer electronics and high-tech in particular. Consumer electronics arrive on the French market directly via the import subsidiaries of foreign groups, or via traders, who concentrate the international manufacturing offer, then redistribute it to the market (***).

While stores have not been abandoned as a means of purchasing high-tech products (***), **% of French people now buy high-tech products from general e-commerce sites such as Amazon or C Discount. **% buy directly from specialist sites such as Fnac or Darty. Last but not least, event-based sales sites such as Ventes Privées are particularly popular with those looking to save money.

[***] Purchasing channels preferred by the French France, ****, in percent Source: ****

Distribution differentiated by brand positioning: Low and mid-range players and products will generally go through online distribution channels (***). Higher-quality players and products will generally go through online and offline distribution channels corresponding to their own points of sale, or through the points of sale of specialized players (***). Digital giants like Apple also have physical stores to optimize the customer experience.

4.1 Offer typology

The table below shows the main connected speakers on the market and their prices. We can see that the first players to have positioned themselves in this segment, namely Google and Amazon, who dominate the global market, have a more extensive offering. They offer an entry-level product at €**(***). Overall, prices range from €** to €***.

Source: ****

The price of connected speakers can vary according to :

Functionality (***) Sound quality and power (***) Aesthetics

4.2 Supply trends

One of the major trends in the connected speaker market is the desire to democratize the use of these technologies for as many people as possible, by offering affordable entry-level equipment . Google and Amazon offer speakers starting at ** euros. Apple, whose first speaker was sold for around *** euros, lowered its prices with the release of its second connected speaker (***).

In fact, we can see that the price of connected speakers is lower than or equal to the price of so-called "nomadic" speakers (***), despite the added value represented by the voice assistant. LesNumériques] There are two possible reasons for this phenomenon:

A relatively low price makes it easier to increase a product's penetration rate, a major issue for an offering as recent as connected speakers. Smart speakers collect personal data, which is then monetized by advertisers. [***]

However, the market leaders are also proposing a premiumization of their ranges, extending their offerings and also proposing more expensive speakers (***).

The user experience is also at the heart of the evolution of the offer. Future technological advances should enable the offer to evolve and meet this challenge:

the development of *G, improving connectivity the development of artificial intelligence, to enhance the offer and the ...

5.1 Transverse regulations

In France, there are no laws or regulations in force specifically governing connected speakers and associated voice assistants. So, as in other areas of digital technology, voice assistants and connected speakers are governed by cross-functional legal rules.

Initially, the French Data Protection Act of January *, **** provided the legal framework for personal data protection in France.

In the European Union, the General Data Protection Regulation (***).

Article * of the General Data Protection Regulation (***). Thus, the application of Article * of the RGPD stipulates that data must be "collected for specified, explicit and legitimate purposes". explicit and legitimate purposes, and not further processed in a way incompatible with those purposes".

Also, in addition to information on the collection of this data, its use, etc. must be provided to the consumer. Consumers may also request that their personal data be deleted. Furthermore, the collection of data from children under the age of ** requires parental consent. [***]

Smart speakers must also respect article * of the French Civil Code, which protects the right to privacy. However, the notion of privacy is not defined by law, but has been clarified by jurisprudence and can be considered to include health status, sentimental life, image, religious practice, family relationships and intimacy.[***]

5.2 Regulations set to evolve

In the near future, voice assistants could be governed by:

ePrivacy Regulation, a European Union project aimed at strengthening citizens' online privacy by "governing all electronic communications on publicly available services and networks originating from individuals within the European Union"[***]. The regulation is due to come into force in ****. the draft regulation, also European, to govern artificial intelligence. This draft breaks down artificial intelligence into * uses: unacceptable risk, high risk, acceptable risk and use that poses no problem. [***] Applications deemed unacceptable will be banned. conversely, the regulation will have little to do with non-problematic uses, but will focus on high and acceptable risks, which will be framed by ethical obligations such as non-discrimination and respect for privacy.

6. Segmentation

• Google
• Microsoft Espagne
• Alibaba
• Xiaomi
• JBL (Groupe Harman, Samsung Electronics)
• Bose
• Belkin
• Marshall
• Apple
• Soundboks
• Harman Kardon
• MacWay
• KEF
• La Boite Concept
• Sonos
• Ultimate Ears (Logitech)
• L-Acoustics