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HOME NEWS Analysis › Smart home revenues to hit US$100 billion in 2020

Smart home revenues to hit US$100 billion in 2020

by Stuart Wilson, Wednesday 21 October 2015

As big numbers go, it is certainly one guaranteed to get your attention. The numbercrunchers at Juniper Research reckon that global consumer spending on smart home services including entertainment, health, energy and home automation, will reach US$100 billion per annum by 2020. That’s more than double the US$43 billion estimated spend in 2015.

Entertainment services such as Netflix and Spotify are playing a key role in boosting the smart home market size, driven by a universal appeal, and the low cost of services. However, emerging smart home segments, such as home automation, are expected to begin catching up, driven by falling hardware costs and increased consumer awareness.

The new research from Juniper found that home automation subscription services have struggled to address the mass-market. Incremental unit-by-unit purchases, to personalise the home, are the most likely entry point for the consumer, according to the team at Juniper.

The research found that some vendors, such as SmartThings and Nest, have successfully added subscription services to their hardware sales in order to generate ‘lifetime value’.

“Enabling services to generate recurring revenue on top of smart home hardware will be crucial for realising the projected long-term success of this market,” stated research author Steffen Sorrell. “However, tapping the developer community to innovate and address the wider market remains an issue.”

The research forecasts that the number of connected appliances in smart homes will rise to over 20 million by 2020. The market will continue to be characterised by high prices and a low value in connectivity. Consequently, while Samsung expects 100% of its portfolio to be connectable by 2020, consumers actually using these features is forecast to remain relatively low.

Voice control and other ‘hands free’ mechanisms will become the principle interface between users and devices in the smart home. The use of wearable devices to passively supply ‘quantified self’ data to control smart home devices is likely to emerge as a key use case towards 2020.

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