The emergence of consumer-facing generative AI is forcing a fundamental redefinition of what the smart home can do. AI is not just powering features behind the scenes — it is front-and-center in the user experience, capable of understanding intent, creating personalized automation, and delivering proactive assistance. Companies that move swiftly, thoughtfully, and responsibly now will shape consumer expectations — and their own competitive futures.
Parks Associates latest research study of 8,000 US Internet households, AI in the Smart Home: Applications and Consumer Perceptions, quantifies consumers’ familiarity with and use of generative AI and gauges perceptions and concerns with artificial intelligence.
AI Innovation Opens New Possibilities and Competition
Connected home businesses are on the frontlines of AI use both internally and for product enhancement. Connected products and services generate a wealth of data that can inform organizational processes, including marketing methods and messages, support processes, and product development.
Ninety percent are using AI internally for at least one business purpose, including:
- 36% using AI for software development, code generation, quality assurance
- 30% using AI for personalized marketing and customer segmentation
AI/ML also increases solution value and capability to consumers but are often behind-the-scenes and not evident to the end-user. Consumer-facing generative AI applications are, for many consumers, the first time they’ve knowingly interacted with artificial intelligence.
The vast majority of consumer IoT executives (79%) report using AI in their consumer-facing products and services, including:
- 35% using AI for support assistants/chat bots
- 30% using AI for natural language communication
- 28% using AI to understand household patterns
The arrival of generative AI causes all companies active in the connected consumer ecosystem to rethink their product development strategies. Generative AI may be a catalyst for growth, a critical new tool for operational efficiency, or a competitive threat. For many, it will be all three.
Smart Home Buyers Are Leading the Charge in AI Use
Parks Associates research finds 47% of consumers in US internet households use generative AI tools as of Q4 2024, and that percentage is growing every quarter. Smart home device and security system owners are early adopters of next-generation AI tools, and over-index on familiarity, use, and spending on generative and conversational AI apps.
- 66% of security system owners use generative AI apps today and 31% are using a paid version of an AI tool for personal, professional or educational reasons – double the average rate of paid usage.
- Smart home device users similarly show above-average use of generative AI tools.
- Advertising a product as having AI may make consumers less likely to buy those products today – smart home and security products may be an exception. More security system and smart home device owners would be convinced to buy a product with AI marketing than turned off by it – the opposite is true for the average consumer.
AI familiarity is accelerating and reshaping how consumers evaluate smart tech. Early adopters are critical audiences to win and convert to influencers for customers down the line. AI service providers can target smart home and security users as likely early adopters, and can partner with smart home and security brands to engage those audiences.
Companies with AI tools and smart home solutions will benefit from sharing strategies across teams on how to leverage this unique user group for insights, learning, and early uptake.
For more information about Parks Associates research visit www.parksassociates.com or email info@parksassociates.com.
