NPR and Edison Research team up every year to release The Smart Audio Report, which covers important trends in smart speaker ownership and use cases. Smart speakers have emerged as a booming market as consumers use the devices to access music streaming services, control smart-home gadgets, or request basic information on any number of topics, among other uses. The data is derived from a survey of U.S. adults (n = 1,002) that was conducted from Dec. 31 through Jan. 5.

Here's what investors need to know about the state of the smart speaker market.

Woman listening to an Echo Studio.

Amazon's Echo Studio. Image source: Amazon.

Ownership reaches 60 million

Considering how quickly the broader market is growing -- worldwide unit volumes jumped 45% in the third quarter, according to Canalys -- it should come as no surprise that adoption and ownership within the U.S. continues to climb higher. An estimated 24% of U.S. adults, or 60 million people, now own a smart speaker, according to the latest report. That's up from 21% of U.S. adults, or 53 million people, a year ago. Awareness of the product category also continues to rise, a trend that helps drive sales.

Metric

January 2017

December 2017

December 2018

December 2019

% aware of smart speakers

62%

75%

77%

84%

% ownership of smart speakers

7%

18%

21%

24%

Data source: NPR and Edison Research.

Americans now own an average of 2.6 smart speakers per household, as consumers have started adding more and more devices throughout their homes to provide greater access of virtual assistants like Amazon.com's (NASDAQ:AMZN) Alexa. Amazon continues to dominate the smart speaker market with an expansive portfolio of products that addresses virtually any imaginable price point or use case, including the recent rise of smart displays like the Echo Show line.

Engagement remains robust, with 60% of respondents saying they use smart speakers nearly every day or several times a day. Amazon vaguely said last month that customers "interacted with Alexa at record levels this holiday season."

The report also includes data from a separate survey (n = 4,000) of users 13 and older, which seeks to measure different types of audio usage for smart speakers. Over the past five years, the time spent listening to music has declined 5% while spoken word content (podcasts, news, talk radio, and audiobooks) has jumped 20%. That represents an important shift in the type of audio content that users are listening to.

Consumers spend nearly half (46%) of their time listening to streaming audio sources, including Spotify (9%), SiriusXM's Pandora (12%), and Amazon (15%). Amazon has been expanding its music streaming tiers over the past year as it tries to grow that business, while Spotify recently added support for its free tier on Echo, Bose, and Sonos smart speakers.

Keep in mind that the data only covers the U.S., which is no longer the largest smart speaker market in the world. China grabbed that title from the U.S. last year.