The notion that the world around us, particularly in tech-friendly North America, is becoming more connected by the day isn’t necessarily surprising. What may raise an eyebrow or two is just how prevalent connected internet gadgets already are.
What makes the sheer volume of the average homeowner’s online devices jaw-dropping is that by most accounts the Internet of Things (IoT) in general, and “smart” homes in particular, haven’t even gone mainstream yet as most pundits expected last year. But that’s about to change, and today’s average North American consumer’s penchant for online devices could prove to be just the tip of the iceberg.
You’re kidding, right?
It’s not surprising the use of smartphones to access the internet by North American’s is skyrocketing. Five years ago “home roaming,” in other words using a smartphone to get connected, accounted for a mere 9% of fixed access traffic via a Wi-Fi network. According to a recent study of North American consumers, that figure has jumped to nearly 30%.
But mobile phones are just a small piece of the connected smart home. Gaming consoles are another fast-growing means of accessing the internet. Surprisingly, few consumers actually use consoles like the Sony (NYSE:SNE) PlayStation to play games: a mere 2.5% according to the study. However, a full 65% use their PlayStation to stream movies and other entertainment from over-the-top (OTT) providers including Netflix.
Laptops and PCs, while still prevalent in North American households, now account for less than 25% of total internet traffic. Toss in smart personal home assistants such as Amazon‘s (NASDAQ:AMZN) Alexa and similar solutions and the average home in North American has over seven “active devices in use each day.” A mind-boggling 6% of homes use more than 15 connected devices on a daily basis.
If those figures seem a bit much, the stunning thing is connected homes are expected to grow almost exponentially this year, and continue to climb for years to come.
Alphabet Nest unit. Image source: Nest.
Ready, set, go!
Last year there were an estimated 80 million smart home devices delivered to consumers across the globe, up a whopping 64% compared to 2015. The stunning part of last year’s explosive smart home growth is it was woefully short of expectations.
The problems are largely centered on providers like Amazon and Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) with its Next thermostat hub not doing an adequate job of explaining the value proposition of “intelligent” homes. As some analysts described it, this will be the year of the smart home because providers “will be smarter about educating their consumers.”
Consolidation of smart device manufacturers, Alphabet’s $3.2 billion deal for Nest three years ago is one notable example, is also expected to help in educating consumers as well as bring costs down. Another factor key to even more widespread existence of smart homes and devices is security.
No more secrets
A recent move by Intel (NASDAQ:INTC) to further its IoT initiatives — a key effort on CEO Brian Krzanich’s transformation agenda — included partnering with tech giants including GE and AT&T installing cameras, microphones, and sensors on 3,200 street lights in San Diego, CA. The objective is to identify activities including gunshots, monitor crowd sizes, and track vehicle speeds.
Though no San Diego citizen reportedly complained about privacy issues, others certainly have. Which begs the question: if the general public is concerned about smart cities invading our privacy, imagine the unease as our homes become “smarter” by the year? Maybe privacy isn’t the issue some have suggested: it certainly hasn’t prevented the average North American consumer from staying connected at home, by any and all means possible.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Tim Brugger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Netflix. The Motley Fool owns shares of General Electric. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.
