Connected Devices

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Connected Device Trends

Current and future trends in the United States's smart home device space center on the emergence of AI-enhanced smart cameras, the embedding of voice assistants in home products, the rise of screen-equipped smart home devices, the emergence of smart air purification systems, the wider application of robotics, the demand for smart controls for old-generation appliances, and the transformation of smart homes into self-care hubs.

EMERGENCE OF AI-ENHANCED SMART CAMERAS

  • Smart cameras that can differentiate humans from cars, animals, and other objects are now emerging. This new feature, called smart imagining, addresses a common consumer pain point surrounding alerts. In the past, consumers have often complained about receiving false alerts that were triggered by non-humans such as squirrels and cars.
  • HomeAdvisor, a company offering a digital marketplace that connects homeowners with pre-screened home professionals, observed this trend at the Consumer Electronics Show (CES), a well-known platform for innovative companies to present their latest consumer technologies. The most recent CES took place in January 2019 in Las Vegas.
  • One example of an AI-enhanced smart camera that was launched at CES 2019 is Deep Sentinel, a device that links AI imaging to a live video surveillance team capable of communicating with potential burglars and notifying local police.
  • Artificial intelligence (AI) is the technology that drives this trend, as it is the technology that powers smart imagining. With artificial intelligence, smart cameras can now distinguish humans from non-humans, recognize home residents from intruders, warn potential burglars, and notify police.
  • AI-enhanced smart cameras have found their way into ovens as well, as can be seen in WLabs's launch of the Smart Countertop Oven and the June Smart Oven at the CES 2019. These smart ovens feature AI-enhanced smart cameras that can recognize food and adjust cooking times and temperatures accordingly.

EMBEDDING OF VOICE ASSISTANTS IN HOME PRODUCTS

  • AI-powered voice assistants no longer have to come as separate, dedicated devices. They are now being integrated with other home products such as bathroom toilets, mirrors, and pet monitoring cameras.
  • Peter Newman, a Business Insider Intelligence research analyst, noted this trend when he attended CES 2019. He identified this trend as one of the three key trends that can be observed at CES 2019.
  • Examples of new devices that demonstrate this trend include Kohler's bathroom toilets and lights, SimpleHuman's mirrors, and Petcube's pet monitoring cameras. These recently launched devices have a built-in Alexa or Google Assistant.
  • This trend appears to be driven by the need of consumers for "simple and less intrusive" ways of accessing a voice assistant.

RISE OF SCREEN-EQUIPPED SMART HOME DEVICES

  • Smart home devices that come with screens are increasing in number. According to Peter Newman, this is one of the three emerging trends at the most recent CES.
  • This trend can be seen from the following smart home devices that were presented at the latest CES: Mui's wooden touch-sensitive display, KitchenAid's screened smart speaker, and ADT's home security management tablet.
  • Driving this trend is the inadequacy of voice assistants in handling complex instructions or huge amounts of information. Voice-first interfaces are designed to accept simple commands only; they are not capable of handling more complex commands.
  • A screen is more appropriate in cases where several settings need to be adjusted simultaneously, huge amounts of information need to be displayed, or long, complex instructions (e.g., cooking recipes) need to be conveyed.
  • Relatedly, smart surfaces are emerging as well, according to HomeAdvisor. HomeAdvisor cited GHSP's Smart Backsplash as an example of a device demonstrating this trend. Unlike regular backsplashes that are plain panels designed to protect the kitchen wall from splashes, the Smart Backsplash is a touchscreen that homeowners can use to call up connected kitchen appliance controls, search cooking recipes, play music or podcasts, or display an image or scene.

EMERGENCE OF SMART AIR PURIFICATION SYSTEMS

  • According to Dan DiClerico of HomeAdvisor, "indoor air quality is one of the next big targets of smart home tech," and as a result, smart air purification systems for the home are emerging.
  • DiClerico cited Aura Air as an example of a device that demonstrates this trend. Aura Air is an air purification system for the home that monitors air for volatile organic compounds, smoke, or allergens, and removes detected toxins through a five-stage purification process. Any serious issue, such as the detection of carbon monoxide, triggers the system to alert and instruct residents on the best course of action to take.
  • The demand for anti-pollution products, the growing prevalence of diseases that are airborne, and the growing consumer awareness of the benefits of smart air purifiers drive growth in the smart air purifier category.

WIDER APPLICATION OF ROBOTICS

  • Robots are expected to feature more prominently in the "smart home of the future." In an article published by Time, which discusses how smart homes will look like a decade from now, it was mentioned that robots for the home that are more advanced than the smart vacuum cleaner Roomba will be launched in the future.
  • Several companies have already started working on more advanced robots for the smart home. Ori Living, a company that makes robotic furniture, has recently teamed up with Ikea to develop shape-shifting furniture that transforms based on the needs of the user. The concept the two companies are working on is furniture that removes the bed when a desk is needed or hides the closet when it is dinnertime.
  • Another example is Nvidia, a computer graphics company that is developing a robotic arm that will serve as a personal sous chef.
  • Artificial intelligence and consumer demand for devices that can help them with chores are driving this trend. The home robot category is projected to see a double-digit year-on-year growth of 19% in 2019.

DEMAND FOR SMART CONTROLS FOR OLD-GENERATION APPLIANCES

  • Consumers are calling for smart controls that they can integrate with their old-generation appliances. When PCMag asked 2,075 consumers in the United States about the future smart home technologies they desire, it learned that 30% of consumers do not want new smart appliances. Instead, they want smart voice controls to which they can connect their existing appliances.
  • Driving this trend is the unwillingness of some consumers to pay extra for brand-new smart home devices.
  • According to PCMag, smart plugs can help with the integration of older-generation appliances into the smart home network.
  • Other future smart home technologies that consumers want include smart clothes-folding machines (17%), smart lawn equipment (17%), smart beds (15%), and smart closets (12%).

TRANSFORMATION OF SMART HOMES INTO SELF-CARE HUBS

  • According to Ian Marks, vice president of research and development at GlaxoSmithKline, "smart homes are becoming the self-care hubs of tomorrow," and smart homes will soon transform into venues for primary care.
  • Driving this trend is consumer concern for relatives or family members. To illustrate, 42% of adults aged 35-44 in the country worry that relatives or members of their family are not informing them that they are unwell.
  • In the next five to ten years, it is expected that a third of smart homes will be furnished with health-related technology or devices. These devices are projected to benefit the elderly and people with disabilities or chronic conditions by facilitating real-time sleep monitoring, environment monitoring, activity detection, and online physician consultations.
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Connected/Smart Home Market Growth

Over the next ten years, the smart home market in the United States is expected to grow at a compound annual growth rate (CAGR) of 15.36% to 22%. The average number of connected devices per household, which stands at 10.5 devices at present, is likely to increase at a CAGR of 11.17%. Security devices and control and connectivity devices dominate the current smart home market in the country, but it is likely that devices promoting comfort, convenience, health, and wellness will take their place by 2030.

MARKET GROWTH

  • Projections for the United States smart home market cover the next five years only as most market projections do, but there are a few projections reaching 2030 that are global in scope.
  • The United States market currently accounts for around 32% of the $73.719-billion global market and around 26% of smart homes worldwide. Given that the United States has the lion's share of the global smart home market, the projections for the global market are likely indicative of how the United States market will behave in the future.
  • The smart home market in the United States, in terms of dollar revenue, is expected to grow from $23.577 billion in 2019 to $41.756 billion in 2023, suggesting a CAGR of 15.36% during the period 2019-2023. The yearly market size, in terms of revenue, is shown below.
  • If year-to-year growth is considered instead, projections show that the United States market will grow by 20.0% in 2019, 17.3% in 2020, 15.5% in 2021, 14.7% in 2022, and 13.9% in 2023.
  • When it comes to the number of smart homes, it is expected that the number of smart homes in the country will increase from 34.8 million in 2019 to 61.6 million in 2023. The following figures suggest that the number of smart homes in the country is expected to grow at a CAGR of 15.35% during the period 2019-2023.
  • Forecasts indicate that the household penetration rate will increase from 27.5% in 2019 to 47.4% in 2023. The yearly household penetration rate is shown below.
  • The global smart home market is projected to grow from $55.5 billion in 2020 to $405.4 billion in 2030, suggesting a CAGR of 22.0% during the period 2020-2030. The United States has the biggest share of the market, so it is likely that the United States market will grow at the same rate.
  • Driving growth in the United States smart home market include factors such as households' growing focus on home security, consumers' increasing awareness of smart hubs, the launch of new and improved energy management products, and consumers' growing concern for the environment.

NUMBER OF CONNECTED DEVICES

  • In 2018, the average number of connected devices per broadband household in the United States stood at around 10.5 devices. Most of these devices were "computing, mobile, smart speaker, and entertainment devices."
  • The average number of connected devices per household in the country is expected to only grow in the coming years. This number steadily increased from around 4.5 devices in 2010 to around 10.5 devices in 2018, so it is likely that the number will continue to grow at a CAGR of 11.17% in the next ten years. According to market research firm Parks Associates, the average number was 8.4 in 2015, 9.2 in 2016, 9.6 in 2017, and 10.4 in 2018.
  • There were approximately 145 million installed smart home devices in the country in 2017. Between 2017 and 2022, the total number of installed smart home devices in the United States is expected to increase by over 600 million devices.
  • There are nearly 5 billion installed smart home devices worldwide, and by 2030, this number is expected to reach 17 billion. These figures suggest that the number will grow at a CAGR of 13.02% during the period 2020-2030.

LEADING TYPES OF DEVICES

RESEARCH STRATEGY

To understand how the smart home market in the United States will grow in the next ten years, we read through reports and articles that cover said market, the market's segmentation by type of device, and the average number of connected devices per household. Parks Associates, S&P Global, Statista, Security Info Watch, and iProperty Management were among the sources we consulted because these were the organizations that have published information on the subjects of interest. From these sources, we were able to gather insights about the following topics: (a) how the smart home market in the United States will grow during the period 2019-2023 in terms of dollar revenue and the number of smart homes, (b) how the household penetration rate in the country will grow during the period 2019-2023, (c) how the average number of connected devices per household in the country changed in the past nine years, and (c) how the demand for each type of smart home device in the country will change during the period 2019-2023. These details enabled us to perform the following calculations.

United States smart home market
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Revenue, CAGR (2019-2023): (($41.756 billion/$23.577 billion)^(1/4)-1) x 100% = 15.36%
Revenue, market share (2019): ($23.577 billion/$73.719 billion) x 100% = 31.98%
Number of smart homes, CAGR (2019-2023): ((61.6 million/34.8 million)^(1/4)-1) x 100% = 15.35%
Number of smart homes, market share (2019): (34.8 million/134.1 million) x 100% = 25.95%
Average number of connected devices, CAGR (2010-2018): ((10.5 devices/4.5 devices)^(1/8)-1) x 100% = 11.17%

Projections for the United States market cover the next five years only as most market projections do, so we broadened our search and looked at the global smart home market. Since the United States has the biggest share of the global market, and there are a few projections reaching 2030 that are global in scope, we figured the next best thing we could do is to show how the global market will grow in the next decade. We assume that the growth rate of the United States market will not be that far from the growth rate of the global market. Using Statista's report on the global smart home market and its breakdown by application, and Telecompetitor's report on the global number of installed smart home devices, we were able to perform the following calculation and provide insights about how the United States market will grow between 2020 and 2030.

Global smart home market
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Revenue, CAGR (2020-2030): (($405.4 billion/$55.5 billion)^(1/10)-1) x 100% = 22.0%
Number of installed smart home devices, CAGR (2020-2030): ((17 billion/5 billion)^(1/10)-1) x 100% = 13.02%
Sources
Sources