What’s Next for Smart Home Devices?
According to a digital market forecast for 150 countries worldwide, the number of smart homes is expected to grow from about 258 million in 2021 to 482 million by 2025; at the same time, revenue is projected to increase from 102 billion in 2021 to more than 182 billion US dollars by 2025.
It sounds highly attractive. But even though consumers are buying into the smart home, there are still concerns about the growth of the sector. And these concerns can give a hint to the next step development for smart home devices.
What is the smart home precisely?
By definition, a smart home is a household where people have control over a set of connected devices via the use of mobile devices and the Internet, while the devices can communicate with one another. Ideally, they can respond to an array of pre-set rules automatically, be accessed remotely, be managed through mobile apps, and send notifications to the people living in the household.
In daily life, common smart home devices range from control hubs & virtual assistants (e.g., Google Assistant and Amazon Alexa), smart speakers (e.g., Sonos), smart security system (e.g., Ring Smart Locks), smart lighting (e.g., Philips Hue), etc. In addition, there are larger smart home appliances, like fridges, washing machines, and air conditioners, and also smaller devices, like smart thermostats and air quality monitors. The list goes on and is still growing.
How does IoT & AI work in the smart home?
A typical IoT framework includes sensors and actuators which are the key to data transmission, while the former one detect physical phenomena (motion, temperature, etc.) and convert it to electrical signals and the latter one does the opposite. When they are connected through the Internet, this is when home appliances start to communicate with one another.
For example, after installing a smart thermostat into the heater at home, a user can receive information about current indoor temperature and air humidity from the sensor. On the other hand, a user can adjust temperature by sending signals via mobile devices to the actuator which interprets the signals into physical motion, like adjusting the valve on the heater.
While IoT is all about data transmission among devices, AI makes use of the data and pushes it to the next level – smart home. Virtual assistants are the core of the modern smart home. With proper training of algorithms and machine learning, a virtual assistant can perceive verbal cues, react to users’ requests, and direct other smart home devices.
What are the key issues?
Internet Network & 5G:
It’s not difficult to imagine that the future of the smart home will go hand in hand with the technological development of IoT and AI. But what underlies it is the Internet network. Without stable connectivity to the Internet, smart home devices would be even more inconvenient than traditional home appliances.
The awareness of data privacy is on the rise when the majority of people gradually realize the power of big data, even though the data are used to optimize customer experiences. Therefore, it also heightens the hesitation of potential buyers of smart home devices.
Even though businesses are racking their brains about the next sensational and eye-catching functions for their home appliances, what matters most is still the most instinctive element – customer experience. Does the innovation actually bring convenience and connectivity to consumers’ lives? Can the value of smart home devices outweigh the concerns they bring? As for businesses, it is important to rethink why consumers adopt smart home devices in the first place – to have a better and connected life.
According to the Digital Market Report from Statista, most markets (except US, Germany, and UK) haven’t passed the early adopter stage on the innovation diffusion curve. Customer experience would be the key to unlock the market potential in the future.
Why is it important?
Smart home is unequivocally the future of home appliances, and more and more businesses are trying to seize the opportunity to disrupt their current industry landscape. Even fitness equipment companies try to adopt the concept by introducing the smart home gym, like Tonal and The Mirror. The potential of smart home is huge.
In addition to focusing on disruptive innovation, the core value of any product – customer experiences – should not be forgotten. And innovation only has value when it helps serve consumers’ needs and bring about a better experience.
At ADK Insights, we closely monitor trends to forecast how their impact will influence consumer behaviour. To find out more about our views on the smart home and our customer experience analysis tools, please contact Nimrod, Rob or Dam.