How do voice assistants and smart speakers impact home Wi-Fi selection?

Smart speakers with built in Voice Assistants from Amazon, Google, Apple and others were the hottest consumer electronics product in 2018. Could this influence how home owners think about home Wi-Fi selection? And if so, how does that affect Service Providers and their ability to offer Whole-Home Wi-Fi to their subscribers?

Smart Speaker and voice assistant adoption

Smart speakers (wireless speakers with voice-control built into them) were the hottest consumer electronics product in 2018. Strategy Analytics’ research shows Q4 shipments grew 95% to 38.5 million units and the total for 2018 was 86.2 million units. With Google showing strongest overall year on year growth in market share.

Smart Speaker and voice assistant adoption

As voice assistant adoption flourishes we are about to see massive growth in the smart speaker installed-base in homes. Depending on how this plays out, it could cause ripples in the adjacent Wi-Fi Mesh market.

Bold predictions suggest the market could grow at a rate of approx. 17% CAGR to $27B by 2023. Even at half that number, it is an impressive market in just ten years. So this raises a number of questions in the area where smart speakers and Wi-Fi mesh overlap.

Speaker and AP functional consolidation

Since a Wi-Fi AP and a Smart Speaker both need an enclosure, a power source, ports and other common components, couldn’t a full Wi-Fi AP be incorporated inside every wireless speaker for almost the same cost?

A dual function device lets consumers put both a speaker and an AP into more places in their homes, more discretely. And, all the challenges of discovery and pairing can be taken care of at once. Truly plug and play. The same thinking could apply to hidden cameras, motion sensors, thermostats, smoke and Co2 detectors and more, all with trivial incremental costs.

So with a few more chips and for pennies on the dollar, a Smart Speaker could become a multi-function device combining Wi-Fi infrastructure functions and lots of peripheral device functions – Delivering better coverage, greater functionality and improved aesthetics at a lower total cost – Just as laser printers became multi-function printer, copier, scanner and fax machine. It took us a while to get there, but they are all like that now. Right? Why not the same for smart speakers?

EasyMesh could be another threat

Industry-wide adoption of the Wi-Fi Alliance’s new EasyMesh Certification could mean greater interoperability between one vendor’s mesh network and other meshable devices. Thus enabling service providers and consumers to operate hybrid Wi-Fi mesh networks comprising APs, speakers and other devices all serving clients, using off the shelf equipment. If EasyMesh takes off, this could be another threat that relegates Service Providers to providing nothing more than a broadband subscription.

Today, in the absence of standards, Service Providers still have an edge in providing and monetizing whole home Wi-Fi mesh. Thanks to the portable firmware we developed for all the Wi-Fi chipsets, embedUR can quickly port mesh and client services to virtually any device with a Wi-Fi chipset even if it only has one radio (including routers and residential gateways in your installed base).

This gives Service Providers a unique ability to multi-source AP platforms and other Wi-Fi enabled CPE, and provide a superior managed Wi-Fi service offering to their clients at a disruptive price. And in in the short term, it gives Service Providers a way to quickly protect their installed base and get their subscribers on a Smart Home trajectory you can work with.

The driver is Virtual Assistants

It’s easy to forget we’re not really talking about Smart Speakers or whole-home Wi-Fi. Nope this is much more insidious. The smart speaker DEVICE is just the thin end of the wedge for Smart Home domination that could cut Service Providers out of the picture faster than ever.

People always talk about the apps not the tech, being what matters – virtual assistant is certainly a killer app sitting atop a wireless connected world we already thrive from. Close your eyes, fast forward 10 years. Virtual assistants will be commonplace in every walk of life. At home, at work, at play. As indispensable as a Smartphone, and as unimaginable a horror, being without one! So this is really a new lynchpin in subscriber retention.

When it comes to having account control of the home, embedUR has long argued that whoever controls the console controls the home. But it is becoming clear now, we were only half right. The so called “console” is no longer just a “management console”, it is a Voice/Virtual Assistant platform in whatever form it manifests: Amazon’s Alexa, Google’s “Assistant”, Apple’s Siri or something else, and on whatever device the consumer wants to access it on.

Virtual Assistants will rule the roost

The virtual assistant is the “Platform” everything else is merely an “App” in the Amazon, Google or Apple smart eco system. Even the infrastructure management. Whatever it is, devices and infrastructure will be kept subordinate to the Virtual Assistant and the only interface, or maybe the primary interface or at least initial interface is always the Virtual Assistant.

To put this in context instead of a home owner going to a management user interface, they might simple be able to speak a request to “From now on block Jenny from using Wi-Fi on her phone or tablet after 9pm”, and the virtual assistant will know what that means and interact with the Wi-Fi management to put these changes into effect.

Beyond Alexa, Amazon has many investments in the related Smart Home eco-system, including Home Wi-Fi solutions like eero who they just acquired in Feb 2019 and Luma in whom they were a Series A investor; and Smart home security firm Ring acquired in 2018. Not to mention more Alexa models and Alexa integration partnerships with many other vendors. The same is true for Google who has lots of investments in Wi-Fi as well as investments in driverless vehicles and many related AI fields. And Apple too has a long history in Wi-Fi.

Where are Bose et al. in all this?

If the explosion in voice assistants is such a big opportunity, where are the likes of Bose, Harman Kardon, B&O, Sony? Isn’t home audio their bag? Have they missed a trick? ? Seems like it.

It took Harman till 2018 to introduce a fully-connected, multi-room streaming, Google Assistant voice-controlled AV speaker system. Likewise, for B&O to upgrade BeoSound premium wireless speaker hardware and software to support Google Assistant voice control.

If they had virtual assistants of their own, they may be able to turn tables on this Smart Speaker market and gain the lion’s share of the business not scraps off the table. Instead we have seen many of them acquiesce and just become another Alexa or Google channel – a short-sighted view. Kudos to Sonos with their more strategic “we’re agnostic” approach offering native integration with different assistants and Internet music services.

Most smart speakers still function as basic wireless speakers, of course. You can stream songs to them via Bluetooth and/or Wi-Fi if you're not using voice control, and a lot of them now support multi-room audio streaming. But truth is, until recently the audio quality is in a different league than the premier wireless speakers from established hi-fi brands.

Will established Hi-Fi brands fight back?

No doubt it costs a lot to build something like an Alexa or HomePod platform the first time around. But it seems like established hi-fi brands have already given up. Or are there some surprises in store?

By now, mid 2019, there are tons of engineers working on AI, speech recognition products and services. The tech behind all these platforms is available in building blocks already. We predict lots of new voice assistant platforms will emerge soon. The likes of Facebook, Samsung, Sony and many others all have too much interest in owning core AI they can apply to their products.

If the Whole Home Wi-Fi conversation can shift from features and functionality to aesthetics and convenience as it has done in recent years, in a couple more it is conceivable the Hi-Fi brands could push the story even further away from Wi-Fi features back to audio-fidelity and aesthetics if they wanted to… This could give them a much more dominant position.

Whether they take the opportunity is yet to be seen.

What should Service Providers be doing?

The existence of three dominant voice assistants is giving equipment vendors a much needed focal point to propel Wi-Fi mesh, Smart Speakers and other Smart Home gadgets into self-service, commodity products that can all be connected together easily. The faster this happens, the sooner it puts Service Providers in a position with nothing to contribute or, more importantly, monetize, other than a broadband pipe.

On the plus side, the rise in voice assistants is one more short-term driver for Wi-Fi mesh for those that don’t have it. So before your subscribers are thinking Wi-Fi mesh, you need to have an offering for them. Or else they will just get it somewhere else.

The fastest way to stop the rot, is to ensure your subscribers already have a fast, reliable self-optimizing Wi-Fi mesh service from you, which they love and they are not going to give up, before they get distracted by voice assistants, and you open the door to a voice assistant decision driving an unfavorable home Wi-Fi choice.

Talk to embedUR about your home and SMB Wi-Fi strategy.