2015 has been the year of Smart Home Technology and the Internet of Things. The industry has developed to establish the key drivers and uncover barriers to adoption. Looking forward to 2016, this coherent understanding means companies can offer solutions to homeowner concerns and develop more Smart Home features now awareness is increasing.
In the UK, nearly another one million homes have become smarter during the course of 2015*, an increase of 30%, meaning four million UK households now have some form of Smart Home system. The research from Computer Business Review also revealed that the average Smart Home spending in 2015 was £256, equating to a market size of £940million.
Statistics like these illustrate the industry’s potential and profitability for 2016, but how did we get to this stage throughout 2015? At the start of the year, the idea of a Smart Home was relatively unknown. However, due to increased awareness, falling costs and brand adoption the industry has flourished. Here we look at the key influences from 2015 that have helped propel smart technology into the consumer mainstream:
As computing devices are getting smaller and cheaper and wireless technology is becoming universal, Smart Home technology has become a reality this year. Homeowners want to take control of devices from another room, or even another country and the sophistication and innovation of new technology has meant this is possible through various methods, including voice recognition, smartphone app control and even fingerprint technology.
Adoption from household names such as Apple, Yale, Google, Samsung and Phillips, to name a few, has catapulted Smart Home technology into the mainstream media, adding credibility and raising awareness amongst consumers. More importantly, however, big brands give homeowners a name they trust which is reassuring and influential when it comes to making new purchase decisions.
Growing competition amongst Smart Home offerings and the decrease in hardware costs has meant smart technology is more affordable for the average consumer. While still an aspirational purchase in 2015, the falling cost of products will make it more achievable in the new year.
Awareness & Adoption
Perhaps the most important factor for growth in the smart technology industry is consumer awareness and adoption. 2015 has seen ‘smart’ buzzwords bounded about in the media and by retailers, which has considerably raised awareness. Coupled with consumer research surveys, the industry is taking time to understand who the target markets are and what they want out of a Smart Home to tailor the products accordingly. Companies understand that simplicity and ease of use, trumps technological innovation. For homeowners, the benefits now appear to be outweighing the perceived barriers and consumers are appreciating how technology can make lives easier and society more efficient.
The foundations of the Smart Home are grounded in 2015, but heading into the New Year, companies need to bridge the gap between early adopters and mainstream consumers in order to see mass adoption in 2016.
2016 will see a huge increase in integration partners to make compatible systems and products. This will allow multiple devices to work with a range of systems. As a result, there may not be one a leader in smart home technology but different brand leaders in specific fields, i.e. security, entertainment etc. and making products that are only compatible with a singular system won’t be as financially viable. Additionally, this means customers can buy other branded products even if they have an existing system in place.
Understanding the key drivers for Smart Home adoption is fundamental. Research by Yale, GFK and Ovum all agree that security systems, together with trusted brand names, will form the building blocks of the Smart Home, as opposed to Smart Entertainment, Energy, Convenience or Health.
While the Smart Home evolves, Smart Cities look set to expand internationally. Technology has found its feet in the Smart Home and is now being explored to see how it can work at city level to improve community living – whether it is energy saving, improving efficiency or making the area safer. Manchester is the latest example of Smart City adoption, having recently won a £10million government investment to fund pioneering technologies in the city, such as intelligent lampposts and talking bus stops.
At the end of 2015 we can see that the smart market is only just taking off and is set to progress and develop further into and after 2016, with research estimating that by 2020, a typical UK family property will have as many as 500 connected smart devices**.