Why Smart Homes Mean Smart Business
This is part one of a three-part series on the explosive growth of smart homes – who’s driving demand, what industries are leading the charge, and why you need to join the smart home revolution now.
In 1962, we watched the premier of The Jetsons, a TV show about a futuristic family with drones, smartwatches, robotic vacuums, flat screen TVs, and other outlandish technology. Today, it’s time for George Jetson to hang up his space boots and retire his World’s Smartest Home title, with the smart home revolution here to stay. Much of The Jetsons’ technology is already considered outdated as the speed of advancement continues to accelerate. And while most of us aren’t quite ready to sit down to 3-D printed meals, we clearly are ready to welcome connected tech into our homes. Gartner Research predicts there will be 25 billion Internet of Things (IoT)-enabled devices by 2020, and by 2022, a typical family home could contain more than 500 smart devices.1 It’s a future ripe with the possibility of enhanced experiences for consumers, and lucrative new revenue streams for manufacturers and organizations that can stay ahead of the curve.
What is a Smart Home?
As the buzz around smart homes continues to grow, it’s important to understand what exactly makes a home “smart.” The popular technology news and review website CNET defines a smart home as “a home that is equipped with network-connected products (i.e., ‘smart products,’ connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.” Examples of smart home products in the spotlight recently include the Nest Learning Thermostat, Amazon’s voice-controlled speaker, Amazon Echo, and the Samsung Family Hub Refrigerator. According to real estate company Coldwell Banker, a home must include at least two features from a list of smart options, including appliances, entertainment, lighting, outdoor sensors, and safety detectors to be labeled a smart home.2
Often uttered in the same sentence as smart home is “IoT” – the concept of connecting any device with an on/off switch to the Internet (and/or to each other). This includes everything from cellphones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. The IoT is a giant network of connected “things,” which also includes people. The relationship can be between people-people, people-things, and things-things.3 To put IoT and smart homes in context simply, the IoT enables smart home technology.
Who is Driving Demand?
Millennials have overtaken baby boomers as the largest generation in the U.S., and it’s no secret this cohort of digital natives is tech-savvy and convenience-hungry. Icontrol Networks reports that U.S. consumers ages 25-34 are the most excited about owning a smart home and that nearly half of smart home owners are under age 35.4 As the first wave of home automation takes hold with connected thermostats, cameras, lights, and door locks, notoriously restless early adopters are already looking for what’s next. It’s no wonder consumer spending on smart home products and services is expected to top $100 billion next year.5
“To put IoT and smart homes in context simply, the IoT enables smart home technology.”
Even savvy young renters are getting into the game. Numerous articles are popping up on how to design a smart, landlord-friendly rental while saving up for a smart home of your own (see articles from Curbed and CNET). A 2016 survey found that nearly 90 percent of millennials would pay more for a unit that comes already outfitted with automated features, while only 65 percent of baby boomers would do the same. On average, millennials are willing to pay an additional 20 percent in rent for smart home features, and 44 percent of millennials indicated they would even give up a parking space to live in an apartment that was equipped with smart technology.6
“Consumer spending on smart home products and services is expected to top $100 billion next year.”
With millennial consumers expected to spend more than $200 billion this year and $10 trillion in their lifetimes7, smart home adoption will rise steeply as this younger generation grows older and newer generations embrace IoT as part of their everyday lives.
As the demand for connected devices and smarts homes continues to rise, the question is how will companies meet these demands and which will come out on top in the connected home competition.
In part two of The Surge of Smart Homes: How the Internet of Things is Making Our Futuristic Utopia a Reality, I’ll explore which industry is leading the charge in the smart home revolution and why it’s particularly poised for growth.
Download the complete eBook to learn about which industry is leading the charge in the smart home revolution and why you need to join the movement now.
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