The tussle for top spot among vendors played out between Amazon and Google, with the former finally winning by a small margin. Amazon shipped 24.2 million of its Echo devices while Google shipped 23.4 million Home speakers.
However, Amazon's market share fell by more than half, from 63.4% in 2017 to 31.1% in 2018 as Chinese vendors Alibaba, Xiaomi and Baidu, whose sales are restricted to the country, gained in terms of shipments to take the third, fourth and fifth spots.
Canalys senior analyst Jason Low attributed Amazon's success to what he described as its well-timed refresh of the Echo line-up. The new devices, focused on better sound and aesthetics, and helped the company grow 31% in Q4.
"Third parties that support Alexa are eagerly pursuing money-making and growth opportunities. If Amazon fails to support these companies, it could lead to waning commitment, which will be detrimental to the platform."
The Home Hub smart display was the highlight for Google in Q4. "Undercutting other smart displays at US$149, the Google Home Hub has a short-term advantage," said Low.
"Google quickly became the second largest smart display vendor in 2018 with just one quarter's shipments reaching 2.2 million units."
Smart display shipments are estimated to have reached 6.4 million units in 2018 or 8.3% of the total smart speaker market.
"The smart display category is relatively new. While its success is still far from proven, Chinese vendors will jump on the trend. But the category needs clear and strong use-cases beyond low prices to drive demand," said Low.
About four-fifths of the global smart speaker market is estimated to be dominated by Internet service providers and software companies.
"Leading smart device vendors, such as Samsung, Huawei and Apple, have failed to capitalise on the growth of smart assistants for home use," said Low.
"They will risk further loss of control, not only over the smart home segment, but in other areas, such as in-car and at-work scenarios, where smart assistant use and voice enablement are expected to increase in penetration and adoption rates.
"Hardware vendors must quickly pick the right user scenarios and form smart assistant strategies aimed at creating new use-cases for the intended scenarios. First-mover advantage is vital in the world of smart assistants, and the first to establish a user base in an important area will secure long-term success."