ABI Research, the company who have stood at the forefront market research around the tech space, predict that shipments of smart home technology, including smart thermostats, security systems and appliances will double during 2016.
The space has seen north of $550m of Venture Capital (VC) funding since 2012, and the raft of consumer tech demonstrated during CES 2016 was indicative that the funding cycle is now yielding the first generation – or in some cases second and third-gen (mature) products. This explains the explosion of smaller companies ‘going to market’ around CES ’16. The groundwork has done, and this further adds weight to a lot of consumer technology journalists declaring that this is the ‘year of the smarthome’.
According to ABI research, “hardware sales will continue to drive smart home revenues over the next five years, a transition to recurring service revenues is well underway. In fact, by 2020, recurring service revenues will account for close to a quarter of smart home revenues, up from under 20%.”
This makes sense, as the immediate priority for manufacturers is to get smart home tech into consumers hands.
Once consumers get more comfortable with this technology, they will then find its more embedded into their lives. Its then, as services providers, telcos, and other such vendors get involved, that we will see the recurring revenue stream activate. Remote data collection and storage is also becoming a bigger part of some of the products offered by the likes of Samsung, Apple, Amazon and Google, which also drives a recurring subscription or usage based revenue model.
ABI continued, “Smart home service providers are increasingly bringing the most popular DIY devices, such as the Nest thermostat, into their managed service offerings,”.
You can read all of ABI Research’s Home Automation Systems report: https://www.abiresearch.com/market-research/product/1018449-home-automation-systems/.