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Providing market intelligence for more than 35 years
The Business of Consumer IoT: Product Strategy in a Maturing Market
The smart home market is maturing, with 45% of US internet households owning at least one core smart home device. The customer base is shifting to a more mass-market profile, new competitors continue to enter the market, and category leaders continue to push the envelope of innovation and value to keep their competitive edge.
As the market matures, business leaders must adapt their product strategy, business models, and marketing messages for success.
This research surveys more than 100 executives across the connected home and consumer IoT landscape to better understand their view of the market, changing business strategies, key metrics for success, and top challenges facing the market.
Contents
Survey Methodology and Definitions
Business Respondent Profile
Business Markets
Connected Consumer Product Units Sold
Annual Revenue in 2024
Respondents’ Position
Respondent’s Functional Roles
Executive Summary
Business Expectation for 2025 vs. 2024 vs. 2023
Drivers of Positive 2025 Outlook
Reasons for Challenged Outlook
Connected Home Business KPIs
% of Units Connected to Internet
Engagement Frequency for an "Active" Customer
Smart Product Benchmarks
% of Businesses with Strategic Industry Partners
How are industry partnerships most beneficial to your business?
Top 10 Most Impactful Marketing Channels
Drivers for User Engagement with Connected Devices
Matter Standard Adoption
% Using AI Internally
% Using Consumer-Facing AI
IoT Market Evolution
Business Profile and Offerings
Company Product Profile
Business Models Employed
Type of Connected Consumer Product Offered
Types of Business Customers Served
Revenue Models & Channels
Revenue Models Employed for Connected Consumer Products and Services
Business Model Most Impacting Profitability
Services Offered in Connected Home Services
Paid Service Subscription Adoption
Paid Service Subscription Retain for 12 Months
Price of Basic-Tier Smart Products Compared to Traditional Products
Products Bundle with Smart Products
Sales Channels of Connected Consumer Solution
Return Rate of Smart Home Products Compared to Traditional Products
Most Impactful Marketing Channel
Business Strategic Partnership
"In a few words tell us how industry partnerships are most beneficial to your business."
Important Factors Influencing Vendor Selection
Evaluating the User Experience
Metrics Indicative of Successful Connected Consumer Products
Engagement Frequency for an "Active" Customer
Drivers for User Engagement with Connected Devices
Average Percentage of Smart Product Units Connected to the Internet
Effective Methods to Ensure Product Connecting Online
Services Offered to Help Device Set-up and Installation
Data Strategies & AI
Products & Services Guided from User Generated Data
Willingness to Pay Money for Insights Derived from User Data
AI Usage in Organization
AI Usage in Consumer Product and Service
Business Strategy to Computing and Storage Technology
Interoperability & Ecosystems
Home Automation Standards, X10 to Matter
Home Automation Standards Supported
Challenges to Smart Home Interoperability
Matter Standard Product Adoption
"What factors do you believe will be most critical to Matter’s success in the smart home ecosystem?"
Attitudes Towards Tech Giants
Business Outlook: 2025 and Beyond
Business Expectation for 2025 vs. 2024 vs. 2023
Drivers of Positive 2025 Outlook
Reasons for Challenged Outlook
Business Challenges in the Future
Goals for Connected Product Business in 2025
"What competitive advantages do you see as most critical for success in the smart home market?"
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