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Global smart home market to see strong growth

Americas region to grow at a CAGR of 32.43 percent

LONDON—The global smart home M2M market, which was at $19.5 billion in 2015, is set to grow to $96.5 billion by 2020, at a CAGR of nearly 35 percent, according to a recent study from global research firm Technavio.

Is the smart home window of opportunity closing for dealers?

Wednesday, June 29, 2016

With more and more consumers adopting smart home technology, and more and more players moving into the smart home space, this is a pivotal time for security dealers, as the window of opportunity to reconnect with customers—and let them know about all of the interactive services they can now provide as part of the overall security package—will only stay open for so long.

In terms of smart home adoption, almost every day a new study comes out showing that Americans are embracing smart home technology. A recent survey of U.S. adults by Coldwell Banker Real Estate LLC and CNET finds that 28 percent of Americans own at least one smart home product and almost half of millennials are adopting the technology.

"Smart home technology is catching on because it is changing the way we live in our homes," said Robert Burns, president of Coldwell Banker Mid-America Group. "Not only is it shifting the financial perception of the home, but it's also transforming our emotional connection to our homes. We have entered a transformative era. We believe that in two to three years, homebuyers will expect smart home technology." 

Of the early smart home adopters, the research shows that 45 percent of Americans say that, on average, their smart home technology saves them more than $1,100 a year, while 72 percent say smart home products provide them with peace of mind when it comes to home security, and 81 percent said they would be more likely to buy a home if smart technology was already installed.

But while consumers are showing interest in, and adopting smart home technology, a recent study from research firm Parks Associates shows that less than 30 percent of U.S. broadband households are familiar with where to buy smart home products or services.

“In addressing the low consumer awareness for smart home solutions, all players have ample opportunities to make inroads in this early market,” said Eddie Accomando, research analyst, Parks Associates. “Roughly 40 percent of the U.S. broadband households familiar with smart home products or services learned about them from TV or the Internet. In 2016, we are seeing smart home companies develop more robust TV and Internet consumer marketing strategies to reach the consumers who don’t know where to buy smart home products.”

This is both good and bad news for security dealers, as this uncertainty of where to go for these products creates an opportunity for them to be that provider, as opposed to an MSO or a retailer.

According to Parks’ research, home security providers are not far behind retailers when it comes to being the likely purchase channel for smart home products and services, with 31 percent of broadband households preferring to buy these products from a home security provider, compared with between 35- and 40 percent prefering to buy from retailers, 23 percent from an Internet service provider, and only 12 percent preferring a pay-TV provider.

“To move the smart home from early adopters to the mass market, companies and industry players must address low consumer awareness,” Accomando said.

And this includes dealers, too, who must continue to reach out to their customers. As one dealer said during a session at ESX in Fort Worth earlier this month: “When I hear that one of my customers left us because they didn’t realize that we offer these smart home services, it keeps me up at night.”

Smart home wars heating up

Wednesday, June 22, 2016

Just as we have seen with the smart phone revolution, the battle for the smart home looks like it will be just as hotly contested, as there is no denying that consumers today are embracing the smart home concept. 

Studies are popping up weekly confirming that demand is increasing for smart home products and services as homeowners learn more about smart home and home automation technology available today.

The latest research, from market research firm Berg Insight out of Gothenburg, Sweden, shows that North America is leading the global smart home market with 12.7 million smart homes in 2015, a 56 percent year-on-year growth. According to the research, the strong market growth is expected to last for years to come, driving the number of smart homes in North America to 46.2 million by 2020, which corresponds to 35 percent of all households.

The study found that the most successful products in the smart home market include smart thermostats, security systems, smart lighting, network cameras, and multi-room audio systems.

“There is no doubt that regular consumers in the future will own and operate a wide range of connected objects in their homes, from connected home appliances and luminaires to thermostats and security devices,” said Johan Svanberg, senior analyst, Berg Insight. “Attractive use cases, interoperable devices, and well-implemented user interfaces are needed in order to accelerate the market.”

Although Amazon Echo’s Alexa is leading the smart home charge right now, Apple is making a serious play with its announcement at its Worldwide Developers Conference last week of its new app called Home, which will be a hub on the iPhone for all the connected devices in the home. The app is the logical next step for Apple’s HomeKit platform, and both work with Siri, who is getting some improvements and upgrades as well.

Apple also announced that it is working with homebuilders—Brookfield Residential, Lennar and KB Home—to build homes later this year that come with built-in Apple HomeKit infrastructure.

Other major players in this battle for the voice-driven smart home include Microsoft with its Cortana voice platform, and Google Home’s Assistant, which was announced in May. Rumors abound that both Microsoft and Google, like Apple, are gearing up for a serious play for a piece of the smart home market. 

Apple’s brand equity with consumers, though, shouldn’t be ignored, as it is not a big leap to think that consumers would be willing to take the plunge into the smart home market with Apple, a company they know will be able to provide a complete, somewhat air-tight system from the ground up, so to speak.

One negative for Apple is its seemingly late entry into the smart home space, where many early adopters are already using many smart home products that will not work with Apple’s HomeKit platform, which requires using a special encryption chip. Some HomeKit-certified products are currently available from companies like Honeywell, August and Phillips Hue, and Apple said that there are close to 100 more compatible products coming this year.

Stay tuned, because things are starting to get interesting in the smart home space.

Smart home mania or madness?

Wednesday, June 1, 2016

With the flood of new smart home products hitting the market these days, one of the things I look forward to each day is checking my Google Alerts to see what new surprises this wild west of home automation and connectivity is bringing us now.

From smart toasters that tell you when your toast is ready, or if you like, that toasts the past night’s sports scores right onto the bread for you, to a smart-fridge that tells you when you need more milk, the number and volume of new smart home products hitting the market today is staggering. And, to say the least, a little befuddling, like the smart grill that tells you when your steak needs to be flipped, or the smart coffee maker that texts you when your coffee is ready, or … brace yourself … the smart tampon that reminds you when it is time for a change—huh?

As one of my SSN colleagues pointed out, you have to wonder if consumer interest and demand is driving this innovation or if companies are just throwing stuff at the wall to see what sticks. We both agree that more often than not, it is the latter.

The latest innovation, and I have to say I am surprised it has taken this long, is the smart home robot named ZenBo, which is basically Amazon Echo’s Alexa on wheels. ZenBo, and other robots like it that will surely flood the market in the coming months, can turn on your lights, walk you through a recipe, remind you to take your medicine or even read a bedtime story to your kids, if that idea doesn’t freak you out as much as it does me.

For every convenience that a product like ZenBo can provide to a family, you have to wonder if we haven’t flipped open the lid on Pandora’s box. When will the madness end, and how are dealers to make sense of all of these new products hitting the market?

For every interesting new product I read about, like the smart go-cart that Tony Fadell, co-creator of Nest, is designing to allow parents to geofence where their kids will be able to drive, there are five to 10 other new products that make you shake your head.

When it comes to sorting through all of this and figuring out what is viable and what is just, hmm, let’s say—insane—it is important for dealers to ask themselves: Will my customers be interested in this or are these companies creating a problem where there isn’t one just to sell another clever smart home product?


A 'smart home' snapshot

Wednesday, May 25, 2016

The Smart Home 360 report, which comes out today from the market research company Argus Insights, provides a snapshot of what is out there in the smart home market today. The study looks at changes in the market from March to April, as well as overall trends Argus researchers are seeing within the quickly emerging and maturing market.

I caught up with Argus Insights CEO John Feland, who pointed that because the smart home market is changing so fast, “we are continuously pulling data around the marketplace from consumers on what is working and what is not.”

Overall, Feland said that Argus is seeing “year-over-year growth" within the smart home market, and equally important, the data is showing that security is still vitally important with consumers when it comes to taking that first plunge into smart home offerings.

“Home security is top of mind,” said Feland. “For those who are in the ‘do it for me’ category, the gateway use-case is security, so that is still what is selling and driving [smart home] adoption.”

And there is even more good news for traditional security dealers: For the ‘do it for me’ group, which is professional-installer based, the data is showing that when consumers try to do it themselves “they have been frustrated,” said Feland. When they work with a local dealer/installer, the “outcomes have been much better,” he noted.

From an installer’s standpoint, Feland said the key to getting someone to start on that smart home journey is simplifying the initial process for customers while providing a system that can seamlessly integrate smart home connectivity and capabilities without any headaches for the end user.

In the area of home automation, “If they [dealers] are not talking to their customers about Amazon Echo, they are not doing their job,” said Feland. “Amazon Echo is still a leader, and Alexa is still the voice in people’s homes, but we will see what happens when Google launches its product.”

In the DIY space, Feland noted that dealers should pay close attention to consumers’ frustration with the lack of support they are getting on the retail side. “If you look at where they [retailers] are failing right now, that presents an opportunity for traditional dealers to be that second date that leads to marriage.”

The report, which Argus released a sample section of today, is also available for purchase.


Outsmarting the smart home

Wednesday, May 4, 2016

Talked about heavily at ISC West in April, cybersecurity is the buzzword in the industry right now, as manufacturers and dealers on the residential side try to figure out how to navigate through the potential minefield of new smart home products and devices that may leave their security systems vulnerable to hacking.

In a study unveiled this week, Cybersecurity researchers at the University of Michigan were able to hack into a leading "smart home" platform and essentially get the PIN code to a home's front door.

Their "lock-pick malware app" was one of four attacks that the cybersecurity researchers leveled at an experimental set-up of Samsung's SmartThings platform, and is believed to be the first platform-wide study of a connected home system. The researchers weren’t picking on Samsung, as the overall goal of the research was to show how vulnerable these new connected home devices and systems are to hacking.

The researchers found “significant design vulnerabilities from a security perspective," noting that hackers’ attacks can “expose a household to significant harm—break-ins, theft, misinformation and vandalism. The attack vectors are not specific to a particular device and are broadly applicable."

The findings will be presented on May 24 at the IEEE Symposium on Security and Privacy in San Jose, in a paper titled "Security Analysis of Emerging Smart Home Applications."

At the very least, this study—as well as numerous stories of hackers finding their way into connected home devices, from smart TVs to baby monitors—raises important questions that manufacturers and dealers must ask themselves in this new world of advanced technology and interactivity.

As Samsung works out the kinks in its system, many other smart home companies can benefit from this study, as it sounds an alarm—no pun intended—of the importance of cybersecurity. While no system is completely immune from hacking, the research also underscores the fact that smart home companies and dealers need to make sure they are adhering to, at a minimum, the industry’s best practices and guidelines.

One resource is UL’s new Cybersecurity Assurance Program, a standard by which companies can have their products tested and verified by UL for guard against well-known cyber risks.

Having your products and systems third-party tested is a good first step in addressing any security flaws that may be present, as well as any potential fixes, and provides a measure of comfort for customers who are making their first forays into this bold new world of connected home technology.


Finding security in smart home products

Wednesday, April 27, 2016

With the “smart home” taking over talk on the residential side of security, it is no surprise that research and studies continue to pop up in an effort to quantify and qualify what is going on in this growing connected-home market.

Results of a study conducted in March by August Home and Xfinity Home give some further insight into the relationship between home security and connected home devices.

When asked why they would consider adopting smart home technology, the study found that 63 percent of consumers said security or “keeping their family safe” is their top motivation.

In addition, in a Parks Associates’ survey of homeowners with broadband connections, those with a security system were more likely to say they intend to buy a smart home device in the next 12 months.  

So at a time when dealers are trying to emphasize the importance of security first in this new smart home world, it looks like consumers are heeding their message.

In terms of how many plan to add smart home technology, the August Home and Xfinity Home survey found that 18 percent of respondents said they’d likely buy a new smart home product over the next 12 months, including 56 percent of those who have already installed at least one connected device in their home.

What smart home devices are they planning on buying? Video is at the top of the list with 4 in 10 consumers (40 percent) saying a connected camera would be the product they’d most likely add to their home, followed by a video doorbell (26 percent), connected light bulb (19 percent) and smart lock (13 percent).

When asked which device they’d most like as part of a smart home-powered security system, over 63 percent of respondents chose a connected video camera inside or outside the home, while 61 percent of those with a smart home said that a video camera was the device they’d most like to access and control from their smartphone.

This is all good news for the residential security industry, and for dealers who are taking the time to reconnect with their customers who continue to find security in this emerging world of connected products.


Hey Siri ...

Wednesday, March 30, 2016

The other night while activating my new phone, my son overheard me setting up the voice-recognition feature, dutifully repeating the set-up phrase, “Hey Siri,” which prompted sarcastic questions from him like, “Hey Dad, are you sure you know how to do that?” and “You want me to help you set that up?”

And while his ribbing was good-natured, he got me thinking about how his post-Millennial generation is growing up in a world where automation and voice activation—in all aspects of life—are expected and even sought out. And not just for asking where the closest vegan restaurant is or the best recipe for lasagna.

In fact, findings from a recent Home Automation Report from the Connected Intelligence Division of the NPD Group, a market research company, found that nearly two-thirds (64 percent) of smart home product owners used a smartphone to control or monitor their home automation devices. Additionally, 73 percent of smart homeowners already use voice commands, with 61 percent of those consumers expressing an interest in wanting to use voice to control more products in their homes.

With the rise of home automation products and services on the residential side, combined with the ever-increasing need for homeowners to have complete control over their systems, dealers and installers find themselves scrambling to keep up with the current pace of technology.

In my discussions with security dealers leading up to ISC West in Las Vegas next week, voice technology and integration is at the top of most of their must-see lists on the tradeshow floor. They realize that residential consumers today are starting to take a serious look at the capabilities of the connected home, especially if they can control it all with an app and the sound of their voice.

And with new players on the resi side now offering DIY and home-automation options and services sans the need for a security system, dealers today need to move swiftly to compete for the smart home market, while effectively imparting to their customers that the two—home automation and security—should be mutually inclusive.

With smart home technologies changing the way homeowners look at security and home-automation, dealers also need to have a staff that is trained to have the right answers for today’s tech-savvy customer.

If they don’t, there are others who are eager to move in and provide that answer and solution, by way of a security system or otherwise.


Smart homes—all is not golden?

Wednesday, March 23, 2016

While the “smart home” may be a vision of the future—with the rise in interest and demand for these technologies and services continuing unabated—all is not golden in this quickly emerging world of interconnectedness. Potential concerns include cost, ease of set-up and self-service, and support services.
Following data released in December by Argus Insights that shows growth in consumer demand for connected home devices slowing in 2015, findings from a recent survey reveal the specific challenges consumers are facing.

SSN reported on a June 2015 study from Argus, “Connected Home or Ho-Hum?” that showed a similar downward trend for smart home services, although many in the industry disputed the report, and many leading smart home companies are showing increases for 2015 in the adoption rate for their smart home interactive services.

As the industry continues to show interest in, and adopt the myriad new smart home services now available—controlling everything from your lights and heat to tracking your sleep patterns and even when your toast is done—there still may be some growing pains for this quickly emerging market.

To gain a better understanding of these challenges and explore possible solutions,, a provider of cloud-based software and services, surveyed more than 3,000 U.S. consumers in an effort to look at drivers and barriers of smart home usage and consumer behavior for both smart homeowners and potential buyers.

While nearly a quarter of respondents (23 percent) indicated that they have a smart home system installed in their home, the survey found key areas (cost, ease of set-up and self service, and support services) that may be causing some challenges or obstacles for existing and potential new consumers.

Despite the enhanced value to a home, the survey found that the perceived cost of smart home systems is a deterrent for many consumers, with 42 percent saying that price was their greatest frustration when purchasing, installing and maintaining their smart home systems.

The complexity of installing and configuring smart home systems is also frustrating users and causing hesitation in potential buyers. The survey found that 31 percent of smart home owners struggle with the complexity of setup, configuration and ongoing support for their devices, while 18 percent of smart home owners said their biggest frustration is when all of the devices don’t properly communicate and work together, and 43 percent of potential smart home buyers are concerned about the complexity of installing and configuring smart home devices and systems.

According to the survey, of current smart home owners, 61 percent want to fix issues on their own and become frustrated if they can’t, and 57 percent installed, connected and set-up all the devices and services themselves to save money on installation. Of potential buyers, 39 percent would rather install, connect and set-up all the devices and services on their own and save the money, and 22 percent would not buy a smart home system because they perceive it would be too complicated to install and set up on their own.

So while these findings are showing some hesitation as consumers try to make sense of the potential this new world of interconnectedness has, they also point to the need for security dealers and installers to connect more with their customers—and potential new customers—to bridge that gap between their interest in these new smart home technologies and their fear of taking the leap into this cool new world of interactive services.

By addressing these concerns up front, and adding some more transparency to the overall process, companies and installers may find that this initial resistance to smart home technology and services gives way to understanding and wider acceptance and adoption.


Broadband households plan for smart bulbs, appliances


DALLAS—Thirty percent of U.S. broadband households intend to purchase a smart light bulb by end of 2015, according to research from Parks Associates.

Some 17 percent intend to buy a smart kitchen appliance, and 14% plan to purchase a smart thermostat.