(Updated at 10:25 a.m. with more accurate iPhone sales numbers and clarification on smart speaker market).
Allow me to take you back to the not-so-distant past. The year was 2007, Britney was on a downward spiral, a junior Senator from Illinois announced he would challenge heir apparent Hillary Clinton, and the first iPhone had just arrived on the scene.
It was hard to see, at the time, how any of those events would play out (especially Britney, way to come back, baby). Now, nearly a decade later we’re at the outset of another political, technological, and cultural shift.
Could this be the dawn of the smart speaker — or perhaps smart home — era?
Tech reporter Bill Gross claims in a tweet that smart speakers, like the Amazon Echo are on pace with early iPhone sales.
Amazon Echo sales are actually on pace with 1st-year iPhone sales, despite being a household unit, versus a personal unit. #WSJDLive pic.twitter.com/6gc8C7n4gp
— Bill Gross (@Bill_Gross) October 25, 2016
The graph was part of a presentation by Michael Wolf at WSJD Live, an analyst who runs New York consulting firm Activate Inc. Amazon hasn’t officially released Echo sales numbers so Wolf and his firm conducted their own research.
According to data from Statista, 3.7 million iPhones sold in 2007 when the device first came out and 13.7 million sold in 2008. Wolf estimates that smart speaker sales will jump from 1.2 million to 3.2 in 2016 and then to 7.4 million in 2017.
Given those numbers, it doesn’t appear as if Echo is the homerun success that the iPhone was, though it’s certainly gained significant adoption in its first year. The Amazon Echo device became widely available in the U.S. in June 2015.
Activate’s metrics deviate slightly from Statista’s. The firm also took into account other factors, like the number of units required for a household versus an individual.
“Amazon is opaque about Echo sales volume, but we were able to estimate both past and future sales using our proprietary consumer research and a handful of third-party reports on virtual assistant-enabled speakers,” said Michele Anderson, a partner at Activate. “By the end of its first full year of sales (Echo was only available to Prime members until mid-2015), our analysis shows that Echo will have sold 4.4 million units in the U.S. and maybe even more. In contrast, iPhone sold approximately 4.8 million units in the U.S. in the first year after its availability. When one considers the different unit requirements for a product for individuals rather than households, the fact that they are even in the same ballpark is fairly striking.”
Theoretically, the Echo appeals to a more niche market than the iPhone since it is designed to serve fewer functions in fewer locations. The iPhone, on the other hand, is a personal, mobile unit with mass appeal.
But surprising people is Echo’s thing. It became an unlikely hit after an invite-only initial rollout got everyone’s attention. The fact that Amazon far outpaced competitors bringing it to market didn’t hurt either.
Echo and Alexa, the virtual assistant that powers it, also serve as proof-of-concept for the connected home. Experts believe a centralized, voice-controlled operating system that powers home appliances and devices is the next big technological leap.
Google recently released its competitor, called Google Home, and other smart speakers are in the works. Could they spark a technological revolution like the iPhone before them?
