The smart home today is more about point solutions that solve a specific problem—not about installing dozens of devices simultaneously, according to an IHS Markit analyst.
The road map in the future for smart homes is becoming clear, with experts forecasting a solid growth for the market in the next few years.
By 2018, global revenue for the smart home market is expected to reach $18 billion, nearly double the $9.8 billion reached in 2016, according to IHS Markit data.
However, industry players including manufacturers, installers and service providers will have to make incremental changes in their strategies, particularly in the pricing models, ease of use, privacy and security, and machine learning, said Blake Kozak, principal analyst for security technology at IHS.
Figure 1: World smart home devices by category. (Source: IHS Markit)
In a blog post, Kozak mentioned how pricing models have begun to change at the device level with a wide spectrum of options, especially around smart lighting, now available. For instance, Philips Hue, which had been the de facto smart light bulb provider in the past, is now part of a market segment populated with companies including Lifx, Cree, C by GE and Ikea.
Meanwhile, professional service providers have started making concessions for do-it-yourself (DIY) installation alongside professional monitoring, while others are now offering options for financing hardware, which allows a consumer to eventually own the hardware.
Overall, Kozak said pricing plays a significant role in the path to mass adoption because most smart home devices are priced out of the range that many consider would qualify as an impulse buy.
The path to mass adoption of the smart home is to make the “smart” in the home simple and non-disruptive to normal routine, according to the analyst. Today's smart home "is more about point solutions that solve a specific problem—not about installing dozens of devices simultaneously." Kozak said to get to the mass market, smart home solutions need to be simple to set up, and there must be more clarity about which devices are interoperable—an area where professional services has been excelling in.
Meanwhile, consumers are growing more concerned about privacy protection and security, especially since companies have started to use data from IoT devices to make a profit. Today, Kozak said the concerns are mostly with video cameras and voice assistants, but they may soon shift to routers, which will monitor devices on the network for abnormal data traffic.
Lastly, there's machine learning. Because it combines various benefits, machine learning is becoming increasingly important for mass adoption of the smart home, according to Kozak. Combining machine learning with in-home displays or voice assistants will allow for a more enjoyable experience for family or friends to engage the smart home—rather than resorting to a cold, purely mechanical approach relying on individual apps that sit behind passcodes, he said.