Smart home on the rise

May 21, 2018
The number of U.S. homes with smart devices in more than one category is on the rise. New Parks Associates research indicates that 17% of households own an Internet-connected entertainment device and a smart home ...

The number of U.S. homes with smart devices in more than one category is on the rise. New Parks Associates research indicates that 17% of households own an Internet-connected entertainment device and a smart home device. Thirteen percent of consumers own both a connected health device and a smart home device.

"Adoption of multiple connected devices alters consumer behavior as connectivity opens opportunities for adjacent use cases, new means of control, and extension of preferred interfaces," said Brad Russell, director, Connected Home Research, Parks Associates.

CONNECTIONS, Parks' connected home conference, opens this week in San Francisco, featuring seminars that will explore key trends and topics, including "Evolution of the Connected Consumer."

This evolution, Russell said, started with security and safety. Then energy as a category exploded, with smart thermostats becoming the most adopted of all devices. Connected health is a growing area, including personal emergency safety devices, medication dispensers, and connected fitness devices. And the insurance industry is particularly interested in connected devices that detect water leakage and shut off water valves, for example.

The interfaces on smart devices have evolved from the controls being on the device to touch screens, to apps, and now voice.

"Voice is really growing rapidly. Consumer interest is strong, " Russell said. "We have done research asking (consumers) of different ways of interfacing, which do you prefer for different types of products. It varies by device. Lighting is the No. 1 use case for voice."

"Voice has driven consumer interest in many new smart home products, and as burgeoning connected devices populate the home, the next stages of development involve integration of multiple types of input, including data from voice, displays, cameras and sensors," Russell said.

Artificial intelligence will also be a hot topic at the conference, particularly the impact it will have on consumer electronics. Google (NASDAQ:GOOG) will be on hand to discuss how machine learning can be applied to make recommendations to particular individuals within the home.

"When devices know the person to serve, by (recognizing) the voice or knowing a smart phone has entered the home, they can personalize to that individual's needs, not just the household," Russell said.

CONNECTIONS attendees will also discuss emerging business models, including an ongoing shift from a one-off sale of hardware to services, like monitoring services, cloud video recording, access control services, etc. One point to consider is that there is an ongoing cost of supporting connected products across their lifetime.

"Since they are connected, there is an ongoing relationship and (providers) can offer services that are delivered through the connectivity," Russell said, noting the chance for upselling or marketing cross products.

And this leads to another new business model: hardware as a service, which involves paying a monthly fee to use the product and attached services.

"That model has been used on the commercial side. A whole HVAC system (for example) might be a hardware as a service offering. (But) this is new for consumers. It is more likely to be adopted for things with bigger price tags … where the technology might change more frequently," Russell said.

CONNECTIONS is scheduled to run from May 22-24.

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