- Smart home solutions come in two varieties — do-it-yourself (DIY) and professionally installed. Consumers can assemble and connect DIY devices to meet a variety of needs, while professionally installed (sometimes called "do-it-for-me") systems are typically sold by telecom or security companies, and focus on safety and home monitoring.
- Despite healthy growth in the professionally installed smart home market, the self-installed market continues to lag in adoption. Outside of voice-activated speakers like Amazon's Echo, even the most popular DIY smart home devices are seeing relatively sluggish sales.
- Though they're experiencing slow growth, most of the world's largest tech companies are unifying their ecosystems in the hopes of spurring adoption. They see a myriad of benefits by being ahead of the adoption curve.
- These companies are moving into the smart home market ecosystem to enhance their core business models and revenue streams. These benefits include:
- Better data on consumer preferences. Understanding how consumers use their products can provide marketing insights.
- Fewer recalls. Manufacturers can, for example, push firmware updates that reduce the risk of malfunction.
- Early-mover advantage. Companies offering smart home products anticipate that these devices will rise in popularity over time, allowing them to benefit from a head start in the market.
- Smart home owners that were members of BI Intelligence's panel tended to be male, middle aged, wealthier, and more likely to be employed full time. This lucrative target audience makes investment in smart home products more appealing for tech companies.
- DIY smart home players include ecosystem providers and device manufacturers. Prominent names that are primarily ecosystem providers include Google, Apple, and Amazon, while device manufacturers include General Electric, Samsung, and Netgear.
- The main hurdles to greater smart home adoption include high prices, consumer awareness, and technological fragmentation. Resolving these issues is key to DIY smart home solutions' future growth.
Not that long ago, many home-appliance and consumer-electronics makers were gearing up for what they thought would soon be a rapidly growing market for smart home devices. The instant popularity of the Nest thermostat, introduced in 2011, seemed to confirm their hopes. But those expectations were dashed in the coming years as the market for connected home devices later stagnated.
Tepid demand for many of these smart home products stands in contrast to the healthy market for professionally installed smart home solutions. BI Intelligence projects that by 2021, 13.5 million homes in North [...]