Google Home Is Gaining Ground On Amazon Echo

The home smart speaker market could be the next major hardware boom in the tech sector. The Amazon.com, Inc. (NASDAQ: AMZN) Echo got the first-mover advantage in the space, but the latest data suggests the top competitor is gaining ground.

What Happened?

A new survey by Loup Ventures found that the Alphabet, Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Home has gained market share from the Echo over the past six months. The Echo how holds a dominant 47 percent share of the smart speaker market, down from 55 percent in February In the same time, Google Home’s market share has increased from 23 percent to 29 percent.

“This time, Amazon Echo lost market share, mostly to Google, which we believe to be reflective of the current landscape, as Google devices have outsold Echos for the past two quarters,” Loup Ventures's Gene Munster said.

Why It’s Important

Not only is U.S. smart speaker adoption growing rapidly in the U.S., the market still has a relatively low penetration, suggesting tremendous growth potential remaining. Loup found that only 27 percent of respondents own a smart speaker, up 18 percent from six months ago.

In addition to the benefits of hardware sales, smart speakers provide precious in-home access for Google and Amazon, which can use smart speakers to collect customer data and market additional products and services.

What’s Next?

Traders will be watching closely to see how market share shifts in the smart speaker market moving forward. In addition to Google’s gains, Muster said the Apple, Inc. (NASDAQ: AAPL) HomePod (5 percent market share) and the Microsoft Corporation (NASDAQ: MSFT) Cortana (14 percent market share) are wildcards in the space as well.

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