The market of voice-enabled speakers is expanding fast. In one year time multiplied its amount of users by 128.9%, towards an already stunning amount of 35.6 million user only in the United States. Amazon seems to benefit of its first mover strategy with a 70.6% market share, but competitors come slowly to the surface (eMarketer, 2017). Strategy Analytics identified four competitors that are expected to dominate the market; Amazon, Google, Apple and Baidu (Watkins & Branca, 2017). But what will be the industry winning strategy?
Let us first evaluate what the four roles within the platform, as determined by Eisenmann, Parker and Van Alstyne (2009), entail. The platform sponsors are the owners of the voice-enabled speaker platforms. We can identify the platform providers as the virtual personal assistants of each platform as these are the main point of contact of the users and combine both demand and supply. The supply side is established by developers and manufacturers of both the hardware and software extensions that provides the user with the desired options that attract them. And finally is the demand side occupied with the consumers that will buy the voice-enabled speakers.
To this day we can see that all main competitors are following similar strategies of openness. They all closed the platform sponsor and provider role to optimize their virtual personal assistants, but they opened up the demand and supply sides completely. Cross-side network effects are already in play as third parties are manufacturing and building software that attract end-users, and the amount of end-users will in return attract even more third parties.
But can the big four competitors rely on the quality of their own virtual assistant to sustain interaction levels. Or should Google, Apple or Baidu already rethink their strategy to surpass Amazon and become the new dominant market leader?
eMarketer (2017) Alexa, Say What?! Voice-Enabled Speaker Usage to Grow Nearly 130% This Year, Reviewed in: https://www.emarketer.com/Article/Alexa-Say-What-Voice-Enabled-Speaker-Usage-Grow-Nearly-130-This-Year/1015812.
Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2009) Opening Platforms: How, When and Why? in Platforms, Markets and Innovation, Gawer, A. (ed.), Northampton, MA: Edward Elgar, 131-162.
Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2006. Strategies for Two-Sided Markets. Harvard Business Review 84(10) 92-101.
Watkins, D., Branca, J. (2017) Smart Speakers: Sales Head towards 24 Million in 2017 Despite Confusing Array of Choice says Strategy Analytics. Reviewed in: https://www.strategyanalytics.com/strategy-analytics/news/strategy-analytics-press-releases/strategy-analytics-press-release/2017/10/12/smart-speakers-sales-head-towards-24-million-in-2017-despite-confusing-array-of-choice-says-strategy-analytics#.WeT_ojAXrIV.
