While the global smartphone market had a lot to suffer in the early stages of the coronavirus pandemic, younger and less saturated segments of the tech industry impressively managed to sustain their growth levels over the last couple of years.
Smart speaker sales, for instance, only registered one quarterly year-over-year decline in the market’s history… until the first three months of 2022. That’s right, the opening quarter of this year was not great for the Amazon-dominated industry, which somewhat surprisingly
contracted by 4.5 percent compared to Q1 2021.
What happened and who won?
That seemingly shocking contraction comes as less of a surprise when you realize that Alibaba, Baidu, and Xiaomi are three of the top six global vendors. These companies are almost entirely reliant on domestic manufacturing and domestic sales, both of which proved problematic between January and March 2022 due to “unprecedented resurgences of COVID-19 that shut down daily life for many Chinese” people.
The three’s double-digit declines greatly contributed to Apple’s rise to the vendor podium, although Amazon and Google continue to look untouchable in their gold and silver medal positions respectively. Naturally, it would be extremely unfair to attribute the HomePod mini’s surge to renewed Chinese lockdowns and other market “disruptions” caused by Russia’s invasion of Ukraine only, especially given another remarkable achievement pulled off by the diminutive Siri-enabled speaker.
For the first time ever, Apple has the single best-selling smart speaker model around the world, beating Amazon’s fourth-generation Echo Dot and Google’s Nest Mini, both of which happen to be considerably more affordable than the HomePod mini.
In total, 4.5 million HomePod mini copies were moved during Q1 2022, enough for a 12.7 percent slice of a 35.3 million unit pie, which is a pretty incredible accomplishment for the maker of just one smart speaker (after the retirement of the “standard” HomePod).
Practically everyone’s in trouble now
With many more models under their belts, Amazon and Google are sitting at 28.2 and 17.2 percent shares respectively after fairly modest single-digit growth figures compared to the opening quarter of last year.
Looking ahead, the aforementioned top three Chinese players are expected to rebound… in mid-2023 at the earliest, while the top three global vendors will have to overcome some big challenges of their own… somehow. Specifically, the US market is starting to show clear signs of saturation, making life very difficult for Amazon, Google, and Apple, with the latter also having to worry about “exhausting opportunities to sell HomePods to its iPhone customer base.”
Will the likes of the Echo Show 15 truly catch on anytime soon?
In other words, the amazing and somewhat unexpected success story of the HomePod mini might be short-lived, with its manufacturer’s growth likely to “slow significantly” in 2023. It remains to be seen if Apple will try to ride this wave of global popularity… somehow and release a new smart speaker by then, although with absolutely no rumors on that front, we highly doubt such a device is anywhere on the horizon.
Meanwhile, the main focus for Amazon and Google going forward is expected to be on “upselling additional devices to consumers or encouraging them to update older models”, as the existing user base is unlikely to expand much further.
That’s where that mysterious next-gen Nest Hub smart display with standalone tablet functionality, for instance, could come in, while Amazon may or may not look to ramp up the promotion and distribution of its gargantuan Echo Show 15.
Speaking of smart displays, the low-cost second-gen Echo Show 5 dominated that sub-category in Q1 2022, followed by Google’s 7-inch Nest Hub and the second-gen Echo Show 8 to essentially prove that the market is not ready to embrace pricier models with large touchscreens yet.
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