The looming end of the smart speaker

The days of the smart speaker are numbered. And though they won't say it aloud, the tech titans that manufacture the devices are totally fine with it.

Initially introduced in 2014, the Amazon Echo was the first WiFi-enabled speaker of its kind. By simply stating "Alexa," the name of Amazon's digital assistant, users could listen to music, inquire about the weather, and control automated devices connected to its hub like lights, thermostats, and appliances.

Spurred by Amazon’s success, other tech giants quickly followed suit. Last year, Google released its version, Google Home, and Apple announced the Siri-equipped HomePod this past June. Microsoft has also unveiled a smart speaker loaded with its digital assistant Cortana.

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Now, in the near term, sales of these devices will continue to rise — especially as companies release additional products into market. But as the underlying technology that powers smart speakers matures, the devices themselves will lose their usefulness.

Big tech companies actually care very little about the speakers themselves. What they really want is to further embed their AI assistants into your home and daily life. Alexa, Siri, Cortana, and Google's simply named Assistant serve as another way for users to access their core services.

Asking your Google speaker to check the weather feeds into their biggest moneymaker: search. The Echo acts as a convenient way to buy more things from Amazon. The HomePod helps you connect to iTunes.

For the most part, this is exactly how the majority of people use their smart speakers. A recent survey found that 60 percent of users ask general questions, 57 percent use it to check the weather, and 54 percent use the devices to stream music. Unfortunately for Amazon, only 11 percent are using it to order products online.

In essence, what makes these smart speakers so valuable to companies is not the hardware, but the digital assistant, which are already ubiquitous in phones and can be built into virtually any device.

"The digital assistants are going to break free from the speaker," predicts Michael Wolf, the CEO of Activate, a technology consulting firm.

Even beyond smartphones, there are clear indicators that this is already underway. Last month, Bose released headphones that come with Google Assistant, and BMW announced plans to integrate Alexa into certain vehicles next year.

Indeed, Alexa and Google Assistant are already everywhere — from thermostats to light switches to televisions to refrigerators, even iPhones and Sonos speakers. Google and Amazon have made their digital assistants freely available to third-party developers, so there is no limit to where they will pop up, which is exactly what the two companies are betting on.

Apple has fewer products and a more stringent third-party policy, but in addition to the soon-to-be-released HomePod, Siri is already in iPhones, iWatches, iPods, Macs, and Apple TVs.

"Every big tech company believes it is its manifest destiny to own the digital assistant," Wolf said. And "the cost of accessing these digital assistants is heading to zero."

With more and more devices coming with digital assistants built in, consumers will no longer need to buy a dedicated speaker to easily access artificial intelligence around their homes. For instance, if you own one of the brand new Google Pixels, anytime you say "Okay Google," your phone will light up — even if it's across the room. With that kind of ubiquity, what's the point of the Google Home?

In a presentation at The Wall Street Journal's D.Live conference, Wolf predicted that sales of smart speakers will peak at 41 million units in 2019 before falling to 31 million in 2021. He noted that single-use products like standalone GPS devices and dedicated e-readers saw similar declines after their core functions became ubiquitous in other devices.

But the ubiquity of these "smart" devices could pose a serious problem.

The Internet of Things is notoriously vulnerable to cyber attacks, so carrying around microphones that record your every word and placing them throughout your home might not be such a great idea.

Earlier this year, millions of children's conversations with their WiFi-enabled stuffed animals were leaked online. Meanwhile, law enforcement officials in Arkansas sought to use audio collected from Alexa in a murder case.

That said, the security risks of smart speakers are already well documented, and have yet to put a dent in sales. But perhaps innovation will.