Smart Home ‘State of the Nation’ – Why people do and do not buy smart home products

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Today we are looking at the smart home ‘state of the nation’, backed by this survey which has given new insights into where this fledgling industry is at. We have commented many times this year about the growing importance of the home automation and ‘smart’ sector on the way that we set our homes up. However today we are diving into what actually compels people to open their wallets at to purchase a smart home product and what is stopping them.

The key takeaways are that whilst adoption is clearly growing, there are some serious barriers to entry caused largely by the closed ecosystems in which the manufacturers are currently operating in. When people discuss why they should not buy a smart home product yet, they talk about uncertainty over the technology (its openness, its robustness and its true innovation). They are also concerned by price, which remains expensive largely due to the catch-22 of low uptake.

The latest survey on the subject found the following interesting headlines;

  • Smart home devices are turning up in more of our homes, especially in the United States, which is leading the smart home revolution. Such devices are defined as ‘smart’ when they can autonomously connect to the internet, via the IoTs.
  • The market is currently defined as being on the ‘chasm’ – which is a technical way of saying that it is now set to EXPLODE!
  • Smart phones and other non-home based ‘smart’ device sales are dwindling – because too many of us already own them and as such are locked in upgrade cycles. Technology companies see the smart home space as the driver for their next big consumer product early-adopters. The challenge now for manufacturers is to prove that there is a definite and concrete NEED for the product/s – after which we can really expect the mass-adoption stage to begin in earnest, which is the point where the ‘layman’ will identify with the movement (because they will see a tonne of wider commercial advertising as well as friend/family/peer adoption)

There are barriers to the adoption of smart home technology though;

  1. These devices are still expensive – which makes it prohibitive to take a ‘punt’ on them. The survey indicates that this is a slid barrier to the sector moving into the mass market phase
  2. Linked to the above – is the limited consumer demand. Manufacturers have not yet proven that there is a definite need for connected devices – they are still nice to haves – and as a result of that the uptake is slower than hoped. This in turn links to point one, because the manufacturers are not shifting tonnes of their stock yet, they are having to keep their prices high.
  3. Long replacement cycles – a smart kettle is not going to be replaced too often, and frankly, how much ‘smarter’ do we need a kettle to become? once its hooked up on to the IoT, then we can remotely control it, and realistically, that is as far as it needs to go. This is not going to be the next mobile phone, where cool new handsets and features, with a relentless pace of change are driving annual or bi-annual upgrades. Smart homes will change slower, which is limiting some manufacturer uptake/excitement. However this is tempered by the much wider range of products that they can offer for the home – so really the battle comes down to winning the smart-hub war.
  4. The whole space has no standards, which means that manufacturers are building walled gardens around their smart home hubs. Consumers, scared by higher prices, a lack of genuine wider market uptake and fears over how useful these devices actually are, are therefore limiting their uptake. Others fear that the space is ‘only just getting going’, so they do not want to rush too fast into committing to a smart hub, which them means they commit to one manufacturer.
  5. The ‘lack of Apple’ affect – Apple are in this space, but barely. Yet they are one of the very few global brands who can overcome point 4, because Apple fans genuinely LIKE to get backed into the Apple walled-garden. The current main players, like Samsung and Google are typically associated with Android operating systems and openness – so their fans are much less used to being constrained by manufacturer boundaries.
  6. Consumer tech has burned consumers in recent years – not least with devices like 3D TV sets, which have scared people out of jumping too fast. People also committed to changing their music to cassette tapes, then CDs, then Mini-disc’s before finally finding the ‘answer’ is apparently storing your music in the cloud. A similar thing happened with movies. This is a is reason why you should not buy smart home products yet.
  7. Is this technology really good enough? Look at the problems with Samsung and Nest, the Google owned company which has developed such a bad reputation for breaking that many Google staff are in open revolt and want the technology company selling off to ‘save’ Google’s reputation.

All of this points to early market troubles for the smart home in ‘breaking through’. Whilst the signs are there that it will get there, there are clearly a bunch of challenges to be worked through. Why would or would you not buy a smart home product in April 2016? let us know in the comments below

 

 

 

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