Few smart home providers are successful

Consumers across Europe spent considerably more time with consumer electronics than in previous years, a recent study shows. However, while some smart home vendors are struggling to deal with the unprecedented demand, others struggle to sell their solutions. The reasons behind these trends are well known.

With their study “Consumer Electronics 2021”, the market research company quantilope sheds light on the latest trends across Europe. The findings show that more than half of all users of consumer electronics are spending considerably more time with their electronic devices compared to previous years. According to quantilope, the most popular devices are smartphones, followed by television sets and laptops. The most sought-after wearable is the smartwatch and the most popular function is fitness tracking. The findings also show that, before purchasing a new electronic device, most people turn to third-party websites such as Amazon and Google for guidance and reviews.

One thing stands out, though: While most consumer products are in high demand, the study also comes to the conclusion that the potential target group of smart home products has hardly increased. Although millions of people spent significantly more time in their own four walls in the past year as a result of the pandemic, consumers who are not already using smart home devices are reluctant to explore the benefits of smart home products, which are often perceived as too expensive. According to the market researchers from quantilope, the advantages are simply not obvious enough for most.

“If it is not possible to get more people interested in smart home solutions despite the high demand in consumer electronics, manufacturers will have to rethink their strategies,” warns Ulrich Grote, chairman of the ULE Alliance. “Many of the solutions available are still too expensive and don’t match the actual needs of the majority of potential customers. Most consumers simply want affordable smart home solutions that they can use and combine regardless of the manufacturer,” says Grote.

One of the manufacturers who have managed to be successful with their smart home solutions is the German company AVM. In 2020, the manufacturer of the “FRITZ!” products achieved a turnover of 580 million euros, an increase of 50 million euros compared to the previous year. While the FRITZ!Box routers remain the company’s main product, the increasing range of smart home products has helped to boost the latest sales figures. As most of AVM’s multifunctional routers come with an integrated DECT base that supports the HAN-FUN protocol of the ULE radio standard, the routers can also be used as a smart home hub. In addition to AVM's own range of smart home products, sensors and devices from other companies which support the ULE wireless standard, such as Deutsche Telekom, can be added to the smart home network. That means that anyone who is already using a router from AVM or Deutsche Telekom does not have to purchase a smart home hub and can widen their smart home network in small steps, regardless of the manufacturer and depending on their individual demands. It remains to be seen if other vendors will follow this approach. According to the quantilope study, it might be worth it, given that 36 percent of all consumers who do not yet use smart home devices are actually interested in smart home products. “The solutions have to be inexpensive and simple,” says Ulrich Grote.