The connected devices have the potential to become mainstream with the rollout of smart utilities as part of the smart city initiative.
While smart homes have been around for over a decade, the technology to automate mundane household tasks has come into its own globally in the last few years. With the world’s biggest technology companies such as Apple, Google, Amazon, and Microsoft entering the space, smart homes are only set to get smarter. Cloud-based services help lower energy consumption to a great extent. Consumers are now aware of the importance of saving energy and are opting for more energy-efficient systems and solutions for their homes. Growing adoption of smart homes due to technological advancements in cellular networks in the US, India, China, Israel, and South Africa are creating lucrative opportunities.
Products and services associated with home automation, smart, and connected homes have changed the perception of technological innovation amongst customers. Homes are now altered into a connected and personalized ecosystem of services. With the arrival of IoT, technologies such as wi-fi, Bluetooth, near field communication (NFC) are enabling many devices to communicate with each other making the home smarter. With the decrease in prices of sensors, smart devices are becoming affordable. Brands are expanding their connected devices portfolio and creating seamless smart home hubs combining with the home automation market.
In terms of revenue, North America is expected to continue its dominance in the coming years. The smart homes market in Europe is driven by the presence of a large number of industries in the region and concerns about reducing home energy consumption among people. APAC is a highly attractive market for smart homes. Changing lifestyle and increasing need for energy-efficient devices, mobility, and comfort are factors boosting the market in APAC. The smart homes market in the MEA is driven by rising disposable income, changing lifestyle, and growing awareness about the optimization of energy. Moreover, the Latin America market is primarily driven by increasing concerns regarding safety and security and growing need for energy-efficient systems with low carbon emissions.
Emergence of smart homes in India
The advent of IoT and artificial intelligence (AI) in the consumer appliances segment opens a wide array of possibilities, given the massive size of the electronics market in India. New trends in the segment are currently being represented by a growing interest in smart devices. In fact, India is one of the largest growing appliances players in the world. The market is expected to grow at 9 percent CAGR from 2017–2022, forecasted by a PwC study.
Smart devices for consumers have a special focus on smart homes and lifestyles. While the users now are mostly from Tier-I cities, the industry is bound to witness major adoption in Tier-II and Tier-III cities in the near future. The government’s continued focus on Digitalization, increase in internet penetration and data usage, and increased awareness in 30–55 age bracket will help proliferate adoption of smart devices. Another major driver for the increase in adoption of connected devices will be a smart city. Home automation in India is more pronounced in the western part of the country. However, the benefits of connected devices can be derived only on high-speed bandwidth. Players in smart home products can expect a rise in annual growth rate of 61.4 percent with the volume of USD 5901 million.
Smart home devices gain momentum
As per IDC’s Worldwide Quarterly Smart Home Device Tracker, Indian smart home devices market saw a healthy year-over-year growth of 107 percent to reach 1.4 million shipments in 2Q18. Video entertainment category grew 81 percent and the category continues to dominate with 85 percent unit share within the portfolio of various smart home products.
Smart speakers category is also seeing healthy traction, with a 43 percent sequential growth in 2Q18. To give a further boost, leading players are providing special offers on online platforms, spending substantially on marketing to create mass awareness, and are adding partners on board to make the smart speakers as one of the most sought-after and novel devices for the Indian households. Although the initial usage of smart speakers are currently limited to few use cases, as the smart homes market is at a very nascent stage in India, the industry is seeing signs of it growing beyond entertainment. Vendors are making efforts for building an ecosystem around the smart speakers, so as to provide superior consumer and connected home experience. Users are getting acquainted with the voice assistants and opting for it as a single platform to control all their smart home devices needs” adds Singh.
The benefits of connected devices can be derived only on high-speed bandwidth. Major telcos in India have started working to maximize this demand. 5G and LoRaWAN will transform the internet topology and consumer behavior. The growth of mobile POS, AEPS, safe water network, and rural ATMs were major hits and drove consumer adoption. Moreover, mobile data consumption in India is growing at an unprecedented rate, which eventually will play an important role in shaping the adoption of connected devices. Also, the perception that connected smart devices is only at the luxury end of consumption is not substantiated by the number of smartphone subscription, smart TVs or speaker systems sold. The connected devices have the potential to become mainstream with the rollout of smart utilities as part of the smart city initiative.
Unleashing a collaborative approach can also be beneficial for connected devices. Manufacturers of smart devices, companies specializing in interpreting data and developing statistical algorithms, urban planners, medical fraternity, and telecom companies should come together and invest in developing specific use cases that provide social, and economic benefits on a much larger scale. While some steps have been taken in the last few years, much wider engagement will be required in maximizing the opportunities.