IoT Strategy

Bundling Increases Appeal of Value-Added Smart Home Services

by Tom Kerber | Dec. 9, 2015

Awareness of smart devices is increasing, due in large part to the major marketing efforts and budgets of telecom and cable service providers. Parks Associates research shows that between Q1 and Q4 2014 in U.S. broadband households, the intention to purchase one or more smart home devices increased from 21% to 37%.

While smart product and service adoption is gaining momentum, the value proposition for home services including extended product warranties, insurance policies, and service contracts could be enhanced by bundling those services with energy and product monitoring services. Data shows that consumer adoption of home services is much larger than adoption of smart devices. Half of U.S. broadband households already have one or more home services for the major appliances and electronics within their home.

Higher-income households are more likely to adopt these services, and those households likely to adopt a warranty for appliances are also likely to adopt warranties for electronics. The adoption of home warranties is also (unsurprisingly) much higher for those who recently moved into their home.

The appeal of home services is low—less than 10% of broadband households find them very appealing, but when bundled with smart product monitoring services, appeal increases significantly. For instance, in a Parks Associates survey, only 10% of U.S. broadband households found HVAC service contract very appealing as a stand-alone service offering. When bundled with 24/7 HVAC monitoring, the appeal increased to 15% of U.S. broadband households. The impact of bundling is even more dramatic for home warranty services.

Consumers show interest in bundling home services together. New partnerships that create cobranded and bundled solutions will continue to be introduced to sell additional services.


Alternative business models are critical to long-term success in the smart home market. Monetizing smart home products and services using multiple approaches is, by itself, a significant competitive advantage. The addition of a portfolio of energy-related services complement and differentiate smart home solutions, broadening the appeal of security based solutions.

For more information for utilities seeking to add smart home services to their offerings, see Parks Associates’ industry report Winning Smart Home Strategies for Energy Management.

Tom Kerber

Tom Kerber

Director, IoT Strategy

Tom leads Parks Associates research in the areas of home controls, energy management, and home networks. Tom authors numerous reports on energy management and home controls covering the evolution of technology, partnership opportunities, and new business models. Tom’s work at Parks Associates includes managing consumer surveys that track trends and market opportunities and enable insightful evidence-based forecasting for energy, security, and home controls. Tom speaks frequently at key industry events, and his views are sought out by national press organizations and publications.

Tom has done extensive consulting with electric utilities operating in a variety of regulator structures and numerous firms within the smart home ecosystem. Recent utility engagements include defining the home area network roadmap for a California IOU, updating the consumer engagement strategy for a traditional vertically integrated IOU, providing consumer and industry analysis to refine EE and DR programs for an IOU in a restructured market, and providing insights on the evolution of the connected home for a large Midwest IOU. Tom has also led projects for many Fortune 500 companies, helping clients refine smart home strategies, develop scenarios of the future of the smart home market, enhance product roadmaps, and refine specific product features.

Prior to working at Parks Associates, Tom worked as director of engineering and director of product management in multiple industries. Tom began his career in the U.S. Navy nuclear power program on submarines. He holds a Bachelor of Science degree from the U.S. Naval Academy in systems engineering and a master's in software engineering from the University of Texas.

Industry Expertise: Residential Security, Smart Home Products and Services, Home Network Technology, Software Systems, Electric Utilities, AMI, Home Energy Management, Demand Response

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