The Smart Home in 2031

by Elizabeth Parks | Jul. 28, 2021

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 consumers 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, 34% of all households own at least one smart home device, and the average smart home device owner has 7.4 devices. Consumers own thirteen connected devices on average with the majority of the devices (nine) coming from the mature /consumer electronics category, followed by smart home devices and connected health devices.

In the long term, the high-end luxury home market will remain strong and revolve around professional installation and customized services that include whole-home, personalized control systems that are complex and expensive. The MDU markets, especially luxury condos and apartments, will include smart devices and future-proofed network and broadband services as differentiators and continue to show 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.

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 the increase 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.

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.
 



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