Consumer spending on smart home services will nearly triple to $50 billion in 2022 from $17 billion in 2016, says Strategy Analytics.
North America will remain the largest smart home market over the forecast period, but China is driving growth in Asia Pacific region.
Strategy Analytics says business models in smart home market are in flux as service providers seek sustainable revenues other than for security monitoring and smart home platforms are seen as critical for differentiation.
Some firms including Lowe’s and Vivint have built platforms in-house.
Some companies like AT&T, British Gas and Eneco have acquired platform developers in the smart home market.
Dixons Carphone, Telefonica, KPN, O2, Orange and Securitas have licensed platforms from Zonoff , Huawei, Qivicon, AT&T, MiOS and Alarm.com respectively.
Elegantly designed devices will be part of Connected Integrated Systems. Device manufacturers need to create an ecosystem such as Apple is doing with HomeKit or join one.
Developing a recurring revenue business model is a key factor for success. Cross-industry partnerships are essential to building compelling value added services.
Offering professional installation for smart home services ensures higher customer satisfaction.
“One-off devices will remain a significant portion of the market, but a unified software platform managing all the devices in the home as a system – an Intelligent Home System — is where we see the market going,” said Bill Ablondi, director in Strategy Analytics Intelligent Home Group and co-author of the study.
The report said business models monetizing data collected by smart home devices will emerge.
Bluetooth Mesh emerges and coupled with Bluetooth 5 capabilities threatens ZigBee, Z-Wave and Thread.
The move away from the smartphone as the primary interface for the home will continue in 2017.
