Over the past decade, brands have infused artificial intelligence (AI) and machine learning (ML) technologies into their products, services, and workflow to enhance feature sets, enable solutions to work more intelligently and independently, and offer greater personalization. AI/ML increases solutions’ 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.

This forces a new conversation about what AI is, how it works, how it is controlled, and the limits of its capabilities. 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.  

According to Parks Associates latest research study AI in the Smart Home: Applications and Consumer Perceptions, 79% find at least one AI-powered smart home benefit valuable.

This research quantifies consumers’ familiarity with and use of generative AI and gauges perceptions and concerns with artificial intelligence. It also highlights the tangible benefits of AI-powered features and services in the smart home that most appeal to consumers today.  

Top-rated AI assistant features include emergency support, home security awareness, tech troubleshooting, cybersecurity alerts, and face-unlock for the front door. These use cases touch on the value propositions already at the heart of the smart home, and AI promises to enhance that value and build on it.   

• 81% of security system owners find at least one safety-related AI-powered benefit valuable.
• Smart home power users (those with at least 6 smart home devices) particularly value AI assistance in creating routines and automations. 
• Households with children are for more interested than others in home management features, like AI that suggests maintenance priorities and generates home update ideas.
• Older consumers are less engaged with AI tools today, but see the value in several AI benefits at the same or even higher rates as younger consumers, including AI-powered safety, tech-support, and cybersecurity benefits.

Safety, security, support, and home management assistance are gateway applications for AI in the home. Smart home players must know their customer and the benefits that matter most to them. Niche players and one-off device manufacturers can use AI to super-serve their users while platform players and manufacturers with a large device portfolio can use AI to help connect the dots and personalize the outreach, automations, and ultimate benefits that AI can provide. 

Think of AI as a profit driver, not a product detail. Fifty-two percent of consumers are willing to pay monthly for AI that offers value through security, convenience, and automation. This introduces a new service layer for monetization in a market where hardware providers desperately seek recurring revenue to cover ongoing connectivity and support costs.  

The AI service concept tested included the most valuable benefits identified by each respondent. A one-size-fits-all AI service is likely to generate far lower uptake at the highest price points. Still, the advantage or AI in the smart home – and the promise of standards like Matter to unlock the proprietary data and controls that create a siloed/fragmented ecosystem today – is to enable just the type of personalized home automation experience the smart home AI assistant represents. 

Consumers show a remarkable willingness to pay for smart home players who can deliver a truly intelligent, personalized, helpful service. Those using generative AI apps today are a prime target audience for premium AI services in the home. Seventy-five percent of those paying for generative AI apps today are willing to pay for a smart home AI service.  

Users who already see value in AI — especially those paying for it — are ready to pay more for deeply integrated, intelligent home support. Companies across both ecosystems may seek partnership opportunities to develop, market, and monetize experiences.

Consumer Perceptions About AI
Perceptions are improving, but consumers still hold strong concerns about AI. 
Building trust is critical. Consumers are finding AI applications and search assistants to be more helpful and accurate as the models improve – and concerns are marginally lower among those who are actively using generative AI tools today. That said, privacy and ethical concerns are high. 

Deeper qualitative probing around consumers’ concerns reveals that many fear that AI’s core promise – its competency in being useful, assistive, insightful – also holds the seeds of educational, social, and individual harm in substituting the thought processes that humans use to apply themselves today. More specifically, consumers see threat to jobs, a coming tsunami in misinformation, deepfakes and scans, the undermining of education, and environmental harm. Companies working in AI today must clearly articulate how AI is working FOR the user, and not the user for the AI. 

Brands that earn trust and deliver clear, intelligent value will lead the next phase of smart home adoption.