Smart Home Device and system take-up stalled by higher prices
While industry analysts and forecasters continue to talk up the smart home market – predicting global revenues of $40bn by 2020 – the evidence suggests that high prices mean the US public remains strangely reluctant to fully jump aboard the smart home bandwagon. Today, 151 Advisors, a global consulting firm specializing in the Internet of Things (IoT) and real-world go-to-market strategies, released a survey focused on Smart Homes.
In the last five years, for example, American smart home security sales have only grown by 20 percent in what should have been a boom era for the industry. Sales of $3.92bn in 2012 only inched up their way to $4.69bn last year – with 2016 to 2017 growth almost stalling at less than two percent.
So, when a survey shows that price remains the number one consideration – chosen by more than 40 percent of consumers – when considering smart devices and systems for the home, then the industry better sit-up and take notice.
To put a number on it – more than half of those surveyed would balk at paying more than $40 more for a smart door lock for their home compared to a conventional one. Indeed, only five percent polled by IoT consultants 151 Advisors, would pay a $100 premium for smart security in their home.
Today, nearly 85 percent of those surveyed said they considered less than 20 percent of their home to “be smart” and an even smaller percentage even wanted their homes to be “smart” within the next 12 months.
In fact, when it comes to smart home choices, it seems entertainment still trumps security. Aside from mobiles and tablets, the most common smart device in a US home is a television – found in 40 percent of the homes of those surveyed, and that’s four times as many as those owning a connected security system.
If the manufacturers can get the prices down to the right level, the underlying market interest is strong. 27 percent of those surveyed said they had thought about buying a smart lock or smart security system, another 23.5 percent a smart thermostat, and 21 percent a smart device such as Google Home or Amazon Echo. The only thing preventing those consumers buying – the price.
“For the US smart home market to really take off,” said Steve Brumer, Partner of 151 Advisors, “then the prices have to fall, and the smart home premium needs to be closer to $20 than $50.”
For more information or to access the survey in its entirety, please visit: https://151advisors.com/smart-home-devices-survey/.