Google reportedly making billions of dollars from Google Home

Smart speakers and digital assistants have risen rapidly from a curiosity to a staple, and Google has embraced the rising tide better than most, delivering a competitive product to Amazon’s dominant Alexa speakers despite being years late to the market.

Now RBC Analyst has estimated that Google has not only managed to effectively take market share but is also raking in the dollars, generating  $3.4 billion in 2018 revenue from their Google Home devices, all with a healthy 25% profit margin.

This is only slightly off the revenue from their Pixel line, with Google believed to have sold 52 million Google Home devices worldwide with 43 million in the U.S.

While Google had a healthier profit margin on their Pixel phones, RBC expected Google Home devices sales to double by 2020, making the profit stream comparable. Revenue is expected to rise to $7.5 billion then.

The rise of Google Home has been meteoric, with 2 million devices sold in 2016, 15 million in 2017 and 35 million in 2018, with the product believed to have 19.5 million users (with multiple devices) in USA.

The rise of the category as an alternative to the stagnant smartphone market underlines to a degree the failure of companies like Microsoft to penetrate a new smart device category, and also the benefit of having synergies between your smartphone platform and smart speakers.

Read more about RBC’s report at CNBC here.


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