The concept of virtual assistance has been in consumers’ mind for more than half a century, first introduced through Sci-Fi movies such as 2001: A Space Odyssey (1968) featuring virtual assistant HAL and infamous quote “I’m sorry Dave, I’m afraid I can’t do that.”
Portrayed as a must-have feature by the consumer tech industry, our research at Ovum shows that digital assistants, in fact, fall short of consumer expectations and can’t do what they want. A survey conducted by Ovum in the UK and the US in May 2017 revealed that more than 50 percent of consumers don’t find digital assistants useful (see Figure 1).
Nevertheless, over a third of consumers in the US and the UK use digital assistants weekly — this is equivalent to Netflix’s adoption level. And this is set to grow even further: globally, Ovum forecasts the native digital assistant installed base to grow from 3.6 billion in 2016 to 7.5 billion active devices by 2021, including smartphones, tablets, wearables, smart home devices, VR headsets, TV sets, set-top boxes and media streamers (see Figure 2).
The digital assistant population will equal today’s human population in 2021. But fear not — HAL doesn’t feature among the leading digital assistants. Instead, Google Assistant will dominate the native (i.e. preloaded on the device) digital assistant device market with 23.3 percent market share, followed by Samsung’s Bixby (14.5 percent), Apple’s Siri (13.1 percent), Amazon’s Alexa (3.9 percent), and Microsoft’s Cortana (2.3percent). So what’s in it for those companies and what can we expect from them?
Google needs to monetize voice search
For Google it’s all about preserving its dominant position in search. Google monetizes search through display advertising which doesn’t exist in a pure voice-based user interface (i.e. no display). Google would go out of business tomorrow if everyone suddenly decides to shift their searches via smart speakers using voice-based queries.
Linking Google Assistant to core Google services such as Maps, Calendar and Gmail is what could save Google from self-cannibalization. However, the transition from Google Now to Google Assistant will be slow due to many people using older versions of Android. Google’s own branded device push with Pixel and Home along with key partnerships with premium smartphone vendors like Samsung and LG…