Connected Car and Smart Home Market Convergence: Drivers and Barriers

by Parks Associates | Aug. 7, 2015

The connected car and smart home markets are both at an early stage of development, but in many ways they have been growing in parallel with each other: both are being enabled by falling costs of sensors, networking technologies, and data storage, as well as by expanded cloud services, the mass adoption of smartphones, and consumer demand for the connected lifestyle.

In 2015, these ecosystems are beginning to converge, with particular use cases, such as remote home controls, entertainment on-the-go, and home energy management emerging at the intersection. However, significant obstacles and issues must be addressed before players can begin to take advantage of crossover opportunities.

Connected car-smart home crossover drivers:

  • Consumer Experience – Rather than requiring many different authentication points across many different platforms, consumers will demand a seamless user experience across the vehicle and the home.
  • Cross-market Assets – Consumers have shown preference for bundled services; service providers that can offer one bill – at potentially reduced costs – for services crossing both ecosystems have a competitive advantage.
  • Interest from Insurers – Usage Based Insurance providers in the car ecosystem collect actual driving data to reward excellent drivers with reduced premiums. Discounted home insurance based on home automation capabilities are now available as well.
  • Demands of EVs – Electric cars are almost always produced with embedded connectivity, and utilities are very motivated to access the intelligence made available through that connectivity to help balance their energy grid loads and optimize costs for consumers.


Connected car-smart home crossover barriers:

  • Long product development cycles – The rapid growth of start-up companies and the use of crowd funding allows for more and more smart home products to come to market, and at a rapid pace. The automotive development cycle, by contrast, is much, much longer.
  • Privacy and Safety Concerns – The majority of consumers express concern about the security of their location and personal driving behavior data.  Further connecting the car to the home opens up an even wider ecosystem to be concerned about.
  • Functional and Infrastructure Limits to the EV Market – Growth in the EV market is constrained by perceptions about distances the vehicles are capable of driving and concerns about the resale potential of this investment.
  • Proprietary App Development Ecosystem – The relatively low numbers of connected vehicles (compared with the mobile ecosystem), plus the inability to scale development work efficiently make connected vehicles unattractive to many app developers.


Parks Associates explores the current and future states of the crossover opportunities in the connected car and smart home ecosystems in the industry report Connected Cars and the Smart Home: Crossover Opportunities. Click here to learn more.

Further Reading:



Next: Consumers Show Concern over Security Issues for Connected Car Features
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