Beecham Report: Smart Homes Still Misunderstood
Beecham Research has issued a report outlining issues hindering the adoption of smart homes, including the effect high price tags has had on selling the benefits of the technology to homeowners.
The report, ‘Smart Home Market – Current Status, Consumption Trends and Future Directions’, notes that a lack of awareness and knowledge of smart home products and their benefits is a barrier to market growth, along with concerns about data privacy and lack of device interoperability.
While these hinderances to smart home adoption make some of the recent forecast seem unrealistic, Beecham Research points to new industry partnerships (i.e., utility companies pairing with product manufacturers) and innovative routes (i.e., insurance companies selling devices as part of their policies) to market as drivers for market growth, predicting that revenue from the sale of smart devices for the home will achieve at a compound annual rate growth of around 34 percent over the next five years, from $3.1bn in 2015 to $16.2bn in 2020.
“A basic light bulb is more than 20 times cheaper than its smarter counterpart,” said Olena Kaplan, Senior Analyst at Beecham Research and author of the report. “But evidence shows that consumers are willing to pay a premium price if they understand the value of the more expensive product. The crucial question is; does the smart bulb, or any smart home product, offer sufficient benefits for consumers to justify the price tag?”
The report points to the Amazon Echo smart home hub and Samsung Smart Things as a sign that major companies are trying to attract more customers and get a foothold in the home by offering entry products at affordable prices. “In the energy market, the Smart thermostat was amongst the first smart devices to control home energy consumption but it has evolved to manage heating systems and energy used by individual appliances,” said Kaplan. “For example, Nest now also offers IP security cameras and CO2 smoke alarms, while Hive offers a smart power socket, motion sensor and windows/door sensors.”
The Beecham Research report also takes a look at the global markets and levels of smart home adoption across different geographies. “For example, the US market is much more advanced than Europe and other parts of the world due to a more proactive attitude towards connected consumer devices and the popularity of safety systems,” said Kaplan. “Countries where vendors are investing in promoting smart products and raising awareness of their benefits are already seeing faster uptake.”
To find out more about the Smart Homes Market report, visit Beecham Research.