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Smart Home: Where to Next in a Voice Assisted World
Smart home had another year of fabulous growth as Futuresource estimates that shipments grew by 39% in 2018. This consumer electronics category is now worth more than $12bn globally and shipped over 100m devices in 2018. The industry is tackling some important challenges like interoperability, but lags in addressing issues that concern consumers and deter mass adoption such as data safety.
Improved interoperability and ease of use can be counted among the industry’s more important successes and voice assistants have been key to progress in this area. Smart speakers have become the seamless hub that directly controls a myriad of devices and appliances around the home. The quick adoption of smart speakers matters for the wider industry also because they are a common first step for consumers into the smart home eco-system.
In 2019, it is difficult to find a smart home device that does not work with Amazon Alexa or the Google Assistant. The widespread use of voice assistance in the home has taken place while the main smart home use cases remained broadly unchanged: monitoring, diagnostics, remote control and automation have promised (and mostly delivered) convenience and security to consumers who have installed cloud connected security, climate control, lighting and power in their homes.
Where to next? The industry sees AI as the next big development. More than controlling the devices in their homes, consumers will be surrounded by technology that learns their routines and moods and adapts accordingly. Another route for development is to continue to integrate connectivity to more areas of the home from living room and bedroom furniture to the kitchen and bathroom.
Futuresource believes there will be plenty of room for growth within the key established categories of security, climate control, lighting and power categories. We estimate that only 4% of global households own smart home devices (excluding smart entertainment and smart speakers). The saturation rate is higher for the US (19%) and Western Europe (6%) but even in those markets there is plenty of room for growth.
Security and monitoring is the most established area of the smart home and in the US saturation is expected to pass the 50% mark in 2019. This is due to two key sub-categories: smart security cameras and video doorbells, the success of which is now spreading to other parts of the world. Video doorbell shipments more than doubled in Europe in 2018.
Climate control is the second most successful area of the smart home. 14 million smart thermostats shipped in 2018, more than 2/3 of which in the US and Europe. China, the leading market for smart appliances including smart air conditioners, offers potential in smart thermostats not least because unit prices are about half of those paid for by consumers in the US and Europe.
Lighting is less established than security and climate control but growing faster than either category. It also sells for lower unit prices and bundles well in retail with smart speakers which have led to a new wave of smart lighting that does not require hubs or bridges.
Despite fast growth and strong forecast (38% CAGR to 2022), smart lighting has lost the position of fastest growing smart home category it held in 2017 to power, which includes smart sockets and switches. Smart sockets are an easy and relatively cheap way of making any home a smart home and to control any electrical device remotely via a smartphone or a voice assistant.
The success of smart power is a symptom of one of the development branches in the smart home: settled use cases permeating new areas of the home helped by a decline in unit prices. CES is the right venue for big players to showcase their new connected devices. It is also the right place to see what possibilities AI can open for the industry in 2019.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.