The smart home: coming but not here yet – outlook

Do you have a smart home already? Maybe you have some smart solutions like a smart thermostat, a smart entertainment system or a smart home security solution. But really few people have a fully smart and ‘Internet of Things‘ connected home.

Practical applications such as home safety and money saving devices such as smart thermostats and energy meters are currently driving the market, along with smart home entertainment systems (Beecham Research)

The full-fledged smart home is rarely a reality today. A true connected home would at the very least mean interoperability, end-to-end security, a connection of smart home appliances and a more or less stabilized market, making that smart home vision come true.

Yet, with the various evolutions in standards (short range like Bluetooth 5.0, Bluetooth Mesh, the next Wi-Fi and long range too for some applications), in the vendor ecosystems and platforms (the wars of the big players such as Google and Apple) and in the different alliances with home automation standards (ZigBee, Z-Wave etc.) the market is not really stabilized yet.

Smart home smart kitchen

The smart home complexities

Moreover, real smart home solutions that cover it all are still far too expensive for most people as Beecham Research states in its October 2016 smart home report.

The research says that smart homes are overpriced but also undersold and misunderstood. Although the market of smart home devices is expected to do just fine, there is a lack of understanding of smart home solutions and what they can offer. This leads to the focus on practical applications and not enough on the aspects of new home comforts and easy living.

A basic light bulb is more than 20 times cheaper than its smarter counterpart (Olena Kaplan, Senior Analyst at Beecham Research)

Yet, we can’t overlook the earlier mentioned evolutions either. And for consumers it’s not always easy too as they are badly informed, see the various evolutions and also start to see that they don’t have to “buy” everything themselves.

Smart meters and thermostats are often provided by utility firms, insurers sometimes offer smart home possibilities and companies of various backgrounds are bundling the sales of one smart home appliance or a new smart home service they offer to (existing) customers with another one as a way to increase sales, get consumers on board, obtain data and cut costs. At the same time, however, smart collaborations between companies will certainly give the market a strong boost as the solutions come to the home via existing partners in many cases.

Despite the fact that the real smart home is not there yet, we are using smart home appliances and specific solutions in specific areas. It could be entertainment, home security, smart kitchen appliances (a rather popular segment), anything really.

Smart home in practice: entertainment leads but home control growing fast

According to a study by the IAB, released end 2016, for instance, 47 percent of consumers already have a connected/smart TV and streaming device.

Another 39 percent of consumers is interested in buying such a combination. So, that part of the entertainment piece seems to get covered fast. As you might have read in the quote above, smart home entertainment systems are also called one of the key ‘practical’ applications, driving the market, along with home safety and anything that saves money (smart meters and thermostats, for example) by Beecham Research.

According to the IAB report, also the interest for Internet-enabled home control devices and systems is growing (31 percent interested in buying, 17 percent already has one), as is that for Internet-enabled appliances (30 percent interested in buying, 11 percent has at least one today) and Internet-enabled voice-command systems (today 11 percent in possession of one and 31 percent interested in buying).

Connected IoT consumer device buying interest as per December 2016
Connected IoT consumer device buying interest as per December 2016

The smart home market poised to grow with several new initiatives but challenges remain

At the end of 2016 there were ample announcements that will certainly further boost the home automation, connected home and smart home space.

There is more attention for security (e.g. the Z-Wave alliance launched a new certification program), there are innovations in connectivity (e.g., finally Bluetooth 5.0 is there, now the products), vendors have taken new initiatives (e.g. Google’s Android Things), the list goes on.

People must feel safe and secure with the Internet of Things before it can reach its full potential – and there are a lot of things that still need to be addressed (Jim Hunter, Greenwave Systems) Source

Still, more is coming and for the true smart home we will need some more patience, even if 2017 is poised to be a pivotal year with still more innovations and enhanced standards to come (at CES 2017, the secure smart home is a focus for many vendors).

However, as mentioned, the devices and solutions are still expensive, there is no open standard that is 100% safe to connect all the appliances and data. People also don’t trust the manufacturers and the suppliers enough and there is more fear than before.

New industry partnerships and innovative routes to market will help drive impressive market growth (Beecham Research)

Despite all the factors that hold back growth in the market Beecham Research says that the sales of smart devices for the home will grow with an average of 34 percent to reach $16.2bn in 2020.

Until the real smart home is here, most people will probably continue to buy more specific products. Connected smart kitchen appliances and smart home security systems are picking up faster, for instance. And expect more sales in even more entertainment-related devices and solutions, whereby smart wearables and mobile devices meet smart home applications, gaming and entertainment in general.

But the fully connected smart home? That’s still too soon for most.

 

 

Top image: Shutterstock – Copyright: baloon – All other images are the property of their respective mentioned owners.

J-P De Clerck
J-P is the founder of i-SCOOP. Born and based in Belgium, he likes to share information, thoughts, inspiration and anything regarding the convergence of marketing, management, customer-centricity, publishing, digital technologies, psychology, transformation, optimization, media and IT - in the hope it serves you. The mentioned areas are those he has been active in since 1992 as a marketer, a consultant, a publisher and a trainer. Connect on Twitter via @conversionation.