Intelligent Virtual Assistant Market

Market Overview

The global intelligent virtual assistant market size was worth USD 13 billion in 2021. It is projected to reach USD 245 billion by 2030, growing at a CAGR of 38% during the forecast period (2022–2030). 

An intelligent virtual assistant (IVA) is a cutting-edge IT technology that allows people and gadgets such as smartphones, PCs, and laptops to communicate more effectively. IVA makes the process of gathering and maintaining data more accessible. With the rising complexity of work, most businesses turn to intelligent virtual assistants to help them manage their workload and respond quickly to consumer inquiries. Furthermore, a smart virtual assistant makes communicating easier for humans and machines. It also employs voice recognition technology to recognize words and phrases in human speech and transform them into a machine-readable format. The above factors will propel the intelligent virtual assistant market forward over the forecast period.

Market Dynamics

Market Drivers

• Need for Automation in Customer Service

The rapid adoption of the intelligent virtual assistant is one of the primary drivers of the global virtual assistant market. An intelligent virtual assistant offers several benefits, such as quick response, improved data collection, and less dependency on customer support. An intelligent virtual assistant provides a digital avatar that communicates in multiple languages. This rapid implementation is supported by the emergence of large-, mid-and small-scale enterprises. 

Moreover, the BFSI sector prefers IVA mainly for supporting mobile applications. Insurance, hospitality, and travel industries also adopt IVA to enhance their overall customer experience and capital management. Additionally, banking clients who have implemented intelligent virtual assistants in their operations have affected a 46% improvement in customer handling. Therefore, improved customer adoption is fostering the overall growth of the global market.

• Growing Smartphone Penetration

Nowadays, smartphones have become integral to consumers' lives. In addition, to the traditional uses of communication, consumers are now using their technologically updated smartphones with installed virtual assistant apps, rendering their work relatively easier. IVA provides a convenient mode of assistance since it helps pair a consumer's mobile device with the user's bank, doctor, and other services, enabling a user to conduct a series of operations such as mobile transactions, appointment scheduling, and quick query response, and others. Therefore, the growing smartphone demand would positively affect the IVA technology market.

With the help of technological advancements, intelligent virtual assistant providers have integrated natural language processing features into their IVA system. With this feature, advanced end-users can interact with their systems in natural or local languages such as Chinese, French, and Japanese. It has enhanced the overall user experience and facilitated high customer retention. Therefore, the inclusion of natural language processing fosters the growth of the world's intelligent virtual assistant market.

Market Restraint

• Reluctance to Comprehend with Accurate Responses

An intelligent virtual assistant is primarily dependent upon the recognition side. Thus, consumers thrive on the fast, responsive system, but an intelligent virtual assistant uses recognize time as it accustoms itself to its consumers' unique speech patterns. This time required can vary from a few seconds to a few hours or even days, depending on the underlying sophisticated software, integrated hardware capabilities, and internet connectivity's strength and speed. Hence, such a factor is expected to hamper the market growth to a certain extent. 

Moreover, recognition performance is crucial in adopting a particular intelligent virtual assistant product. Thus, players are compelled to improve the performance of these systems over a period of time. However, this factor is still dependent on those underlying factors, which are expected to impact the market’s growth negatively. 

Market Opportunities

• Development of Gesture Recognition Technology

Artificial intelligence has revolutionized an electronic device's technical aspects to software applications such as chatbots. As interactive conversational systems are growing fast in the AI area, many development activities are focused on multi-modal dialogue systems that process two or more combined user input modes, such as image, speech, touch, manual gestures, gaze, & head, and body movements such as hand spin or head movements. These systems are designed and known as the next-generation intelligent virtual personal assistant model. This is an opportunistic factor for the global market, which is expected to boost the market's growth in the coming years.

Moreover, an increase in the number of devices being manufactured for applications such as home automation, shopping, virtual reality and augmented reality gaming, consumer electronics, navigation, and driving, among others, is also a factor that drives the market's growth in the coming years. The emergence of the Internet of Things (IoT) network has further propelled the market of intelligent devices at a significant rate. This is further aiding the growth of the market positively.

Regional Analysis

The global intelligent virtual assistant market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

The Predominance of North America Over Others

North America acquires the largest market share and is predicted to grow at a CAGR of 34.8% during the forecast period. North America is analyzed across the US and Canada. The global intelligent virtual assistant market has the highest penetration in this geography. An intelligent virtual assistant is anticipated to become a standard solution for live support in smartphones. Additionally, North America has a high acceptance rate in the BFSI segment, significantly contributing to the global intelligent virtual assistant market. North America makes the highest IT investment in the BFSI sector compared to other geographies. Therefore, the intelligent virtual assistant market is expected to grow in North America.

Asia-Pacific is the fastest-growing region. It is analyzed across Japan, China, Australia, India, and the Rest of Asia-Pacific. Asia-Pacific is the most opportunistic market for intelligent virtual assistant technology. This growth is mainly attributed to IVA providers, network operators, and aggressive advertising for intelligent virtual assistant benefits. These benefits include instant query response and high customer retention, improving the overall service quality. 

Europe holds the second-largest share and is estimated to reach USD 60 billion by 2030, growing at a CAGR of 38.7%. An increase in big data has generated a massive demand for intelligent virtual assistants across Europe. In addition, the increasing focus of large and medium enterprises on enhancing customer relationships for improving customer retention is leading to several growth opportunities for the IVA market in Europe. The end-user segment of large-scale enterprises has emerged as the most significant contributor to the global IVA market, owing to its higher implementation rate than other end-user segments.

Segmental Analysis

The global intelligent virtual assistant market share is segmented based on product, technology, industry vertical, and region.

Based on the product, the global market is bifurcated into Chatbots and Smart Speakers.

• Insights into Product

Chatbots command the highest market share and are expected to grow at a CAGR of 35.9% during the forecast period. The global intelligent virtual assistant market is expected to witness an increase in the implementation of Artificial Intelligence chatbots, especially for consumer-based services. It provides accurate delivery services with quick access to required data at the tip of users' calls or messages.  

The Smart Speaker segment is anticipated to grow swiftly during the forecast period due to its broad adoption in the residential and commercial sectors. Smart speakers have witnessed a high demand in smart homes, offices, and automotive applications for various application services such as voice-activated device control. Moreover, the proliferation of smartphone usage further boosts the demand for smart speaker applications such as Siri and Google. 

• Insights into Technology

Based on technology, the global market is classified into Text-to-Speech, Speech Recognition, and Text-Based.

The Text-to-Speech segment is the highest contributor to the market and is estimated to grow at a CAGR of 35% during the forecast period. Its ability to translate text into speech in and from various languages is a key growth driver of the technology. Moreover, it also helps patients suffering from reading challenges, thereby boosting the growth of this technology.

Speech Recognition is the fastest-growing segment. Growth in smartphone penetration and an increase in customers' demand for speech recognition technology in their devices boost the acceptance of speech recognition technology. In addition, speech recognition technology offers interactive and intuitive communication features, working well for the speech recognition segment and propelling it further. Therefore, ease of access, natural language understanding, and increased popularity of speech recognition technology is critical market drivers. According to analysis, speech recognition is most popular among users, mainly in North America, followed by Europe, owing to its interactive and intuitive communication features. In addition, speech recognition technology holds most of the market share, with approximately 65% of the overall IVA market.

The Text-Based segment holds the second-largest market share. The rise in the adoption of text-based intelligent virtual assistants among various industry verticals is the primary factor that drives the market's growth. This is attributed to its ability to generate or reply to customers' queries or inquiries via automated e-mail, text, or chat. With additional functionalities in text-based intelligent virtual assistant, it can deal with correspondences, manage diaries, schedule appointments, and organize meetings without human intervention.

• Insights into Industry Vertical

Based on the industry vertical, the global market is categorized into BFSI, Defense & Government, IT & Telecommunications, Retail, Healthcare, Traveling & Hospitality, Automotive, Media & Entertainment, and Others.

BFSI holds the leading position in the market and is expected to grow at a CAGR of 30.6% during the forecast period. An intelligent virtual assistant offers several benefits to the BFSI sector. It provides customized financial guidance to all its consumers round the clock. In addition, it addresses customer support queries and issues about service sign-up. Therefore, such benefits increase the demand for intelligent virtual assistants (IVA) in the BFSI sector.

The Automotive industry is expected to increase at the quickest rate during the projected period. The fast-growing in-car entertainment systems market is driving this expansion because IVA is a significant component of these systems, allowing the vehicle driver and passengers to surf the internet, navigate, and make phone calls using speech recognition technology. The rise in demand for intelligent virtual assistant systems in the automotive industry, voice recognition technology, and growing internet penetration across the globe drive the global market growth. 

The growth of the Retail Industry fuels the demand for intelligent virtual assistants. Asia-Pacific exhibits the highest order during the forecast period as China owns the world's largest retail sector. IVA offers quick query responses, short server downtime, and an easy shopping experience. Moreover, IVA implementation in retail facilitates specific web analytics services, which can help retailers act quicker. In retail (e-commerce), keeping a tab on the number of visitors logging into a website is mandatory. Knowing a consumer's preference is essential, which would further help in offering appropriate products to the customers. An intelligent virtual assistant helps monitor these preferences by conducting an intelligent web analysis of the website. Furthermore, IVA also provides information such as time spent by visitors on a particular site, pages frequently visited, and products most viewed. Therefore, these benefits foster a significant demand for IVA in the retail sector.

Recent Developments

• May 2022 - Nuance® Communications, Inc. announced an agreement with athenahealth, Inc. to extend the availability of the Nuance® Dragon® Ambient eXperience™ (DAX™) ambient clinical intelligence solution through the athenahealth® Marketplace.
• March 2022 - Nuance® Communications, Inc. announced an expansion of its next-generation ambient AI capabilities for diagnostic imaging. The expanded capabilities will include enhanced AI-powered reporting features in the Nuance PowerScribe platform, empowering radiologists to create highly accurate reports in less time and with more clinically valuable structured data.