Conversational Systems Market size was valued at USD 182.42 Billion in 2023 and is likely to exceed USD 5.69 Trillion by the end of 2036, expanding at over 30.3% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of conversational systems is evaluated at USD 232.17 Billion. The growth of the market can be attributed to the increasing adoption of natural language processing, artificial intelligence chatbots, and advancements in cloud services during the forecast period. As per International Finance Corporation, over 70 billion IoT devices were available across the globe in 2020 and are further projected to be tripled in the upcoming 5 years. The increasing demand for good customer service in all sectors is rising the need for chatbots. It is estimated that people who faced bad customer service lost trust and left the brand. The chatbots here help to generate automatic responses to the customers which makes them feel recognized. It also advertises new products with notifications and reduces employee costs through conversational AI implementation.
The market growth can be further attributed to the increasing deep neural networks, and machine learning technology used for application across various verticals like retail, BFSI, IT, telecommunications, and healthcare segments. Based on the data provided by UNESCO, AI was projected to generate an almost added value of USD 4 trillion by 2022. The global conversational systems market is based on artificial intelligence that can understand various languages and will start written or verbal communication with the customer. Hence, all these factors are estimated to hike the growth of the market over the forecast period.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
30.3% |
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Base Year Market Size (2023) |
USD 182.42 Billion |
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Forecast Year Market Size (2036) |
USD 5.69 Trillion |
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Regional Scope |
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Type (Voice Assisted, Text Assisted)
The global conversational systems market is segmented and analyzed for demand and supply by type into voice-assisted, text-assisted, and others. Out of these sub-segments, the voice-assisted segment is anticipated to hold the largest market size by the end of 2031 during the forecast period on account of advancements in Artificial Intelligence (AI) technologies. Increased adoption of new technologies along with improving customer experience is estimated to drive market growth in the telecommunication segment during the forecast period. Data provided by the World Bank states that with the usage of chatbots banks globally will save about USD 7 billion in operating costs by 2023. The voice-assisted chatbots are really useful in this fast-growing world of digitalization. The automatic AI-generated replies in the customer service sector are useful to navigate people on the right path without the need for a virtual assistant. This can help people by responding to a command on the smartphone or electronic device by recognizing the voice.
End-user (IT & Telecommunication, BFSI, Government, Retail, Energy, Power)
The global conversational systems market is also segmented and analyzed for demand and supply by verticals into IT & telecommunication, BFSI, government, retail, energy, and power. Amongst these segments, the IT & telecommunication segment is estimated to garner the largest revenue during the forecast period. The increasing adoption of telecommunication in every sector and a growing number of prominent players in conversational systems. The growing need to meet the demand and satisfy the customers with good customer service. The penetration of the internet and the use of mobile and smartphones is estimated to have a positive impact on the telecommunications industry. The rising interest of people in upcoming new technologies and increasing competition among key players. The 5G technology and the Internet of Things are also having a huge impact on the industry’s growth. The increasing need for big data analytics as the data is growing tremendously creating opportunities for the telecom sector. Also, government initiatives to improve infrastructure is estimated to drive market growth during the forecast period as per the market analysis. As per the estimations, the net profit of telecommunication companies across the world is estimated to be 13% in 2022.
Our in-depth analysis of the global market includes the following segments:
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By Type |
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By Deployment |
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By Enterprise Size |
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By Verticals |
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The North American conversational systems market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2036. The growth of the market can be attributed majorly to the increasing development of deep neural networks, machine learning, and other technological advancements. The increasing research and development activities in North America contribute to the growth of the market over the forecast period. The major segment of deep machine learning is software, hardware, and services. For instance, in the United States, the software segment is estimated to reach approximately USD 900 million while hardware and services are projected to reach respectively around USD 350 million and USD 750 million by 2025. The rising advancement in machine learning research and algorithms is rising the demand for deep learning networks. The increasing amount of data to be processed and problems such as object detection, NLP task, and image classification. All these problems need deep neural learning to solve.
International Business Machines Corporation (IBM Corp.) joined forces with MBZUAI to advance AI research with the New Center of Excellence focusing on NLP, AI applications in the healthcare industry, and sustainability.
Google LLC CEO Sundar Pichai has announced the new advancements of Google in enhancing knowledge and computing that include the addition of 24 Google translation languages, auto summarization in chats, visual improvements, auto-translation of YouTube content, and a publicly available machine learning hub for Google cloud customers.
Author Credits: Abhishek Verma
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