KEY POINTS

  • The market for professionally installed smart-home systems has grown at a steady pace even as do-it-yourself (DIY) solutions have struggled to gain traction. Home-security companies have helped to drive adoption as they connect their systems to the internet. 
  • By 2021, 13.5 million North American homes will have a professionally installed smart-home system. That's up from 6.7 million in 2016 and represents a 15% five-year compound annual growth rate (CAGR).
  • There are four key differentiators that are driving the professionally installed smart-home market. The two most important factors are that professionally installed systems don't require users to have the technical wherewithal to install smart-home devices, and that they are centered around security, which surveys have shown is the most valuable aspect of smart homes to consumers.
  • There are three main players in the professionally installed smart-home market —security providers, cable companies, and telecom companies. Security providers are transitioning to offer security systems that can be remotely monitored by the homeowner, while also adding home-automation features. Cable companies and telecoms are new to the market and are leveraging their existing customer and employee bases to build robust, competitive offerings.
  • Survey results show that customer satisfaction level with professionally installed smart-home systems primarily relies on the quality of installation, the quality of the after-purchase experience, and the perceived value of the system as a whole. Cable companies, which are poised to drive future growth in the market, would do well to tailor their strategies accordingly.
  • The top barriers to the professionally installed smart-home market include higher bills, poor brand reputations, and DIY technological unification. These are the challenges cable providers and others must surmount if they are to succeed.

Introduction

professionallyinstalledBI Intelligence

Handy, digitally savvy homeowners rejoiced at the introduction of the Nest Thermostat in 2011. The device — controllable via smartphone, capable of learning users' climate-control preferences, and stylishly designed — was an instant hit and, along with a raft of other product introductions, helped propel the expansion of the do-it-yourself (DIY) smart-home market through 2014. Since then, however, high prices, tepid demand, long device-replacement cycles, and technological fragmentation [...]