Smart home installations becoming more mainstream

6 Jul 2011

New smart home installations, which stood at 0.44m worldwide in 2010, are growing by 65pc a year, with the total expected to reach 5.38m in 2015, according to a report by Berg Insight.

The total revenues will simultaneously grow by 32.8pc from US$2.3bn in 2010 to almost US$9.5bn in 2015.

Smart homes and connected home technologies have been around for a long time, but up till recently, this has been a niche segment either for the affluent or extreme technophiles.

Now, there is an increasing shift in smart home technology adoption from custom and luxury residences to mainstream and production homes.

“Things are changing for this industry due to a perfect confluence of market, regulatory, strategic and technology trends,” said the report’s lead analyst Alan A Varghese.

“First is the pull from consumers in the mobile age, who desire to use products such as iPhones and iPads to control their lifestyles through user-friendly interfaces. The regulatory drivers come from governments, whereby countries and utilities are mandated to better control the generation, distribution and consumption of power in residences.

“The strategic push comes from new entrants, such as broadband providers, who are already inside consumers’ homes and are looking for the next opportunities to increase ARPU, reduce churn and become complete solution providers. Finally, the technology piece is coming together with increasing focus on interoperability, even as the cost of modules, chipsets and software is trending down.”

At the moment, smart home technology vendors are focusing their attention on retrofit of existing houses and easy-to-deploy technologies, such as wireless.

Berg Insight finds this market will soon be crowded with dealer-installers from traditional industries, such as security service providers, as well as new entrants, such as broadband, wireless and utilities service providers.