Q&A: The future of smart homes

Parks Associates is a market research company that looks at IoT residential products and consumer perceptions about these products and services. Commenting in a recent feature about the smart home in 2031, the association provides a valuable insight into what the future of smart homes will look like. Elizabeth Parks, president, and Chris White, research analyst, share their thoughts in full with Amy Wallington.

AW: What are your top three predictions for what a smart home will look like in 10 years’ time? What is likely to change or stay the same?

EP: With the exception of the high-end, luxury home market, consumers are still working to “build” their smart homes by buying single devices and connecting them to create an experience that provides value around the core propositions of safety and security. Even within the security market, we see consumers building on top of their existing services to add in new smart home devices that provide new value through the experience that products like a smart door lock or doorbell can provide.

While technology can move very quickly, it takes time for the industry to catch up and provide a solution for consumers that is unified, integrated, and affordable. In addition, the channel where consumers purchase these solutions from continues to be fragmented, making it more difficult to understand the customer journey.

In the next ten years we expect the following in the smart home:

- Consumer world driven by services, with connectivity, Wi-Fi, and mobile services as the foundation to a consumer’s connected lifestyle.

- Potential elimination of some smart devices all together, as the user interface will become the sensors embedded elsewhere and driven by different control and monitoring options, like an app and/or voice.

- The marriage of health and home, with a special ability for consumers to remain independent in their home as they grow older as a direct result of new products, services, and monitoring solutions built off of a variety of existing and not yet known technology developments.

Currently 36% of all households own at least one smart home device and the average smart home device owner has 7.4 devices. Consumers own 13 connected devices on average with the majority (9) coming from the mature/consumer electronics category, followed by smart home devices, and connected health devices. 

AW: Will AI influence the smart home much over the next 10 years? If so, how?

CW: In many ways, AI is already a big influence on the smart home market. AI-driven features help enhance the user experience across product lines by allowing devices to respond to voice commands, learn preferences, and identify notable events that merit an alert.

In the near future, though, more powerful AI will do all of those things so much better. Voice controlled devices will be conversant, and simple commands will be more individualised and contextualised. The combination of AI and increasingly open connectivity standards, like the rebranded initiative called Matter, formerly known as Project Connected Home over IP, by the Connected Standards Alliance (CSA), will help facilitate better interaction by smart home devices without the limits of a branded ecosystem. This provides smart home customers the ability to choose the devices that best meet their needs, and ensures they work together seamlessly.

Most importantly, AI will be better able to anticipate requests and proactively take action based on a situation without a command. Access point cameras and video doorbells will deter a would-be burglar then unlock the door for a tenant or give instructions to a delivery person. Our research has shown that intended buyers are interested in all of these AI features, and while they are bleeding edge now, they will be common in ten years. Smart lights and thermostats will prepare the home for a family returning from vacation based on their calendars. This level of automation will appeal to a whole new population of smart home users who don’t currently see the added convenience or don’t enjoy setting routines, learning commands, or interacting with devices in general.

AW: How is AI working alongside home automation systems to simplify homes?

CW: AI is making smart products smarter, and by leveraging a more powerful edge working together with the cloud, developments in AI are improving user experience in other ways.

Amazon Alexa can now make hunches at a potential action by smart home devices based on less direct user speech. So, for example when a user says good night, Alexa can make a hunch that the user may want the lights turned off or direct other night time activities with supported smart home devices like adjusting the temperature on a smart thermostat, locking doors and turning off smart switches. Google’s Meena can now have more human-like conversations including some joking around. Additionally, Wyze cameras feature face detection via AI that the company is offering as a service to its camera owners.

It’s not just cameras and voice assistants that are smarter and more powerful – sensors and other inputs are also improving, and their data is being incorporated into more systems. Vivint and other security doorbell and camera companies are building devices with wide-angle cameras and also motion sensors controlled by AI that have features like facial recognition.

These smart devices can detect objects and movement, gather info for security purposes, and do useful day-to-day things like report a package delivery. As they monitor areas where packages are dropped off, the AI can understand the difference between an owner collecting a package and a thief taking a box off the porch. In the case of an unrecognised package-collector, the device can respond with a siren and lights.

AW: Do you think the pandemic has accelerated the smart home market? If so, is this set to continue?

CW: Amidst this disruptive year, the smart home market continued its steady growth, with 36% of consumers owning a core smart home device and 41% owning any remotely-monitored connected home device. Not only are new households getting in on the smart home trend, but households are adding more devices to their collection. Parks Associates research shows that 17% of US broadband households are now what we call smart home Power Users, meaning they own at least five smart home devices – and this rate has just about doubled in the past two years. Additionally, 9% are Super Power Users, owning 10 or more smart home devices.   

AW: Will the acceleration be more in the mid-low end of the market or will it be in the high-end home market too?

EP: In the long term, the high-end luxury home market will remain strong and revolves around professional installation and customised services that include whole home, personalised control systems that are complex and expensive. The MDU markets, and especially the luxury condos and apartments, will include smart devices and future-proofed network and broadband services as differentiators, and continue strong growth. 

Getting to mass market with a unified smart home offering will take a long time. Affordability, simplicity, value, familiarity, privacy and security concerns, and product integrations are still barriers for adoption. Single point solutions (like one camera, one doorbell) will continue to be purchased, but achieving the full vision of the smart home requires many more developments from the industry. The whole home solution at the mid-low end of the market will take years and years to happen. 

It is a truly complex and fragmented market. The promise or vision of the connected home that includes whole home solutions for mass market is a bold one that will take many more years to achieve.

AW: What are some of the biggest smart home trends that people are investing in since the pandemic?

CW: Consumers have new needs, new concerns coming out of the pandemic and new use cases have earned some spotlight.

For instance, consumers have new concerns about the health and safety of their home environments. Parks Associates research reveals that 1 in 4 US broadband households reported thinking about the quality of their air inside their homes or the quality of their water due to the Covid-19 pandemic. This opens an opportunity for device manufacturers and service providers to help consumers in making their home a smart home and a healthier home.

Air quality and water quality monitoring join a number of use cases that are even more compelling today than they were 12 or 18 months ago. Reliable, high-performing broadband and secure home networks that can keep up with new demands and that give consumers control over how and when their devices connect are more important than ever, and really are the foundation of the smart home experience. Advanced networking solutions are critical in a world with a much more distributed workforce, with employees and employers relying on the ability to get things done wherever they are.

The pandemic also shed a light on the vulnerability of the older members of our community and technology has an incredibly powerful role to play in keeping loved ones independent, safe, and well as they age. Parks Associates research shows that 64% of consumers in US broadband households used a telehealth service in the past 12 months, up from just 15% in 2019.

Finally, the pandemic also brought about a major increase in residential energy bills as consumers conducted life mostly at home, and with it a rising awareness of new solutions to help manage energy at home. Combined with natural disasters like fires and winter storms that knocked out power to millions of people – consumers and regulators are more aligned than ever about the value of distributed energy generation and home energy storage.

We have seen smart home growth occurring among new customer segments. Historically, industry players have been focused on single-family homeowners as the target buyer segment, but interest among MDU residents is taking off, as adoption of smart home devices among MDU residents doubled in the past two years, coming in at 41% in Q4 2020. Additionally, 83% of multifamily builders report the ability to integrate smart home technology with property management software as “very important”.

Main image: Elizabeth Parks, president, Parks Associates

Second image: Chris White, research analyst, Parks Associates