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Smart Home

Amazon Echo, other smart speakers to rake in $2B by 2020

The market for speakers with virtual assistants will top $2 billion by 2020, a nearly 500 percent increase over 2015, says research firm Gartner.

Tyler Lizenby/CNET

Here's your flash briefing: Talking digital assistants like Amazon's Alexa are poised to explode in popularity.

By 2020, people worldwide will spend $2.1 billion on smart speakers like the Amazon Echo Dot, a $50 speaker that listens and responds to voice commands when addressed as "Alexa," said market research firm Gartner on Monday.

The speakers, which Gartner calls VPA-enabled for "virtual personal assistant," comprised a $360 million market last year. A big reason for the increase? Competition from Apple, Microsoft and Google.

"Last year, the VPA speaker market essentially consisted of end-user spending focused entirely on Amazon Echo, a wireless speaker with an array of embedded microphones to capture and respond to users' far-field voice commands," said Werner Goertz, research director at Gartner. "By 2020, competitors' products and third-party implementations of leading VPAs (Google Assistant, Apple's Siri and Microsoft's Cortana) will likely have ramped up."

echo-dot-six-pack.jpg

The $50 Echo Dot is available in a six-pack.

Amazon

Google is expected to reveal more details on Google Home, its Amazon Echo competitor, on Tuesday, and Apple's Siri is rumored to be hot on their heels.

Gartner also said 3.3 percent of global households will be equipped with such a device by 2020, and that one quarter of them will have more than one device. Amazon is attempting to hasten that trend by offering a discount on its new Echo Dot: buy five, get the sixth for free.

Kind of like tacos, if tacos were a trojan horse aimed at conquering the world of commerce.

"The widespread adoption and proliferation of VPA speakers could result in a significant number of online shopping orders," said Goertz. "Vendors that are able to create an intimate, familiar relationship with the user will be able to contextualize ordering to the extent that preferred products will be proposed, and processing details will already be captured. As a result, the user's propensity to purchase products and services using VPA systems should increase, transactional friction could be reduced and the overall user experience would be improved."

Alexa, that sounds kinda creepy. Tell me a joke.