Market Insight

More than 900,000 smart speakers to be used in healthcare facilities by 2021

April 26, 2018

Bryan Montany Bryan Montany Research Analyst II
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  • More than 32 million smart speakers were sold in 2017, and this number is projected to grow to over 85 million by 2021.
  • More than 900,000 smart speakers will be used in healthcare facilities in 2021.
  • Smart speakers in hospitals will most frequently be used in patient rooms, but some will also support physicians and nurses. Privacy concerns, and a subdued receptivity to the technology among doctors, surgeons and nurses, will restrict the short-term growth opportunities of voice assistant technologies in healthcare.
  • Unlike other vertical markets, Amazon’s Echo speakers and Alexa assistant lack the same competitive edge in hospitals, so this market segment presents opportunities for competitors, like Google and IBM, as well as new market entrants, like healthcare specialist eClinicalWorks.

Our analysis

Over the next five years, a majority of smart speakers will be sold to residential end-users, and penetration rates of smart speakers in commercial buildings are not anticipated to match rates in homes. However, building owners in healthcare, which represent the fastest-growing market vertical for smart building projects, are expected to be forerunners in adopting smart speakers in commercial applications.

Hospitals will be particularly active in this adoption, comprising over two-thirds of the total growth in this segment. This development offers an enticing prospect for Amazon’s challengers to compete for projects in a sector where Amazon will not possess a significant competitive advantage.

Opportunities and challenges

The most compelling use for smart speakers in hospitals will occur in patient rooms, where voice commands will operate televisions and other appliances in the room and forward patient requests and notifications to mobile devices used by doctors and nurses. When smart speakers are integrated with building management system platforms, voice control can also adjust lighting levels and window blinds. Smart speakers in hospitals and other medical settings could free up nurses and other staff, allowing them to spend less time running tedious, non-medical errands, freeing them to invest more time on issues requiring actual medical expertise.

Smart assistants could also provide similar support for physicians, although hospitals will limit this application until smart speakers can meet America’s Health Insurance Portability and Accountability Act (HIPAA) and other similar regulatory requirements around the world. In operating rooms, voice assistants could access patient medical records, so doctors and surgeons can instantaneously access vital information related to their procedures. The use of smart speakers in this context would necessarily connect confidential patient data to an additional platform, which could increase exposure to cybersecurity risks. Furthermore, out of concern that their decisions or diagnoses might be contradicted, some doctors might be hesitant to use smart speakers in patient rooms, where voice assistants’ responses could be overheard.

In the short term, the inability of mass-produced smart speakers to satisfy hospitals’ privacy and security concerns will restrict applications to custom projects developed jointly among vendors and hospitals. For example, Thomas Jefferson University Hospitals in Philadelphia recently partnered with IBM to develop smart speakers that respond to a limited set of a dozen specific voice commands.

Amazon faces stiff competition

Amazon Echo will likely continue to reign supreme as the dominant smart speaker in most market segments, but Amazon will not enjoy a similar position in hospitals, because the Echo is not designed for the centralized and rigorously controlled management environment. Initial reactions from hospitals have indicated that the Amazon Echo is not an ideal fit to address their privacy concerns, which opens up the market to increased competition from other companies. Notably, Alexa’s voice recognition capabilities are not as strong as Google Assistant and other competitors; plus, features that take advantage of voice recognition are currently limited to just a few applications. It is also important to note, however, that Google’s mass-produced smart speakers are also not designed to be compliant with HIPAA and other regulations.

IBM’s Watson has become a leading voice assistant in the healthcare sector in North America and Western Europe. Alibaba has also announced plans to bring its voice assistant into Chinese hospitals. In addition, eClinicalWorks and other new market entrants from the healthcare industry have introduced PC-based voice assistants designed specifically for doctors that may eventually be incorporated into smart speakers. The unique uses for voice assistants in hospitals present opportunities for competitors to gain market share in one of the fastest-growing market verticals and establish themselves as alternatives to the Alexa powerhouse.

Smart Buildings Report - 2018

This report examines the global market for the equipment and building management system (BMS) platforms installed in building projects. It analyzes the significant trends, threats and opportunities for growth affecting this market through 2022. The report includes extensive qualitative analysis of differing approaches taken by building owners in six end-user industries, as well as quantitative Excel data, forecasting growth across 4 product types, 14 equipment types and 5 geographic regions.

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