The growth of smart home technology

Categories: Internet Of Things | Technology |

The growth of smart homes

Smart home technology needs the Internet of Things

The smart home technology market is growing quickly. Many entrepreneurial companies are producing smart home devices that can help homeowners use technology to manage networked devices in their home. The Internet of Things (IoT) has enabled this growth, making it possible to connect physical devices with internet connectivity and sensors to provide new services to households. Examples include the Nest Learning Thermostat, the Nest Cam for monitoring activity in a home, and the August Smart Lock.

The growth of smart home technology

According to Statista.com, a website that compiles statistics from over 18,000 sources, the smart home market can expect explosive growth. For example:

  • Revenue in the market is approximately $9.7 billion in 2016, with the U.S. generating most of that revenue.
  • Revenue is expected to grow to approximately $20.9 billion by 2020.

Gartner Research predicts that in 2020, we’ll see approximately 25 billion IoT-enabled devices, a good portion of which will serve to automate homes. All indicators are that smart home technology will be a major force in the digital marketplace of the future.

Defining smart home technology

Home automation is split into many different segments. These definitions will describe the most common.

  • Home automation. Home automation is a broad term that can include devices such as garage door openers, lights that go on at dusk or turn off when no one is home (think of the Phillips Hue lights as an example), thermostats that can be controlled by an app on your phone, air conditioning units, gardening devices such as watering systems.
  • Security. Security is a big issue with homeowners. Smart home systems can assist in a number of ways, such as smart locks, security cameras, door monitors, pet and baby monitors
  • Kitchen & home appliances. Increasingly manufacturers such as Samsung are making smart home appliances, such as refrigerators, washing machines, coffee makers, vacuum cleaners, and monitors for carbon monoxide, smoke and fire.
  • Home entertainment. Home entertainment is a core part of smart homes, from audio systems and whole-house audio speakers, to smart televisions, to home theater systems including projectors and screens.

Improving energy efficiency is driving the market today

The smart home market continues to be driven by early adopters. They’re people who are tech savvy, often millennials and generation Xers, who enjoy digital gadgets. However this masks the evolution that smart home technology has gone through in recent years – moving from relatively simple connected devices, to connected systems today that can learn how people live, and automatically adjust themselves.

Homeowners will adopt smart home technology when they can specifically identify how a system helps them live better and save money. As a result, we expect to smart home technology continue to be concentrated on improving energy efficiency and home security, and in time see greater adoption of smart appliances (such as refrigerators). An October 2016 survey by the 451 Research Group found that a smart thermostat was the device most consumers planned to use.

The best way to help the homeowner see that potential is to have smart home devices that can talk to each other and that can be controlled from a central device. Besides convenience, the device needs to provide the information a homeowner will need to appreciate the value of smart home technology.

Typical homeowners will require more justification for smart home technology

In order for the smart home market to thrive, there are still some challenges that device manufacturers need to overcome. The main issue is interoperability and getting different devices to work seamlessly together. Typical consumer issues include:

  • I want my security system to control my lights to save me from setting up two devices.
  • I don’t want to buy a separate front door monitor, I want my security system to control the monitor.
  • I want my smart thermostat to talk to my smart meter and show me how much money I’m saving.

Typical homeowners will make decisions about smart home technology, not based on acquiring fun gadgets, but based on benefits, cost justification and cost savings.

The IoT Will Drive the Market in the Future

We can’t afford to leave the homeowner with a range of separate devices. Central controllers, enabled by the IoT, will be needed to realize the potential of the smart home marketplace. Some devices such as the Amazon Echo and Google Home are moving in the direction of centralized smart home control.

If you want to find out more about smart home technology, then join us next week when we will be holding an online webinar about smart homes and home automation. Register for free here.