The smart home market is still young, but people are already clamoring for the devices

Homes around the world are going to become smarter and more connected over the next five years.

BII

Devices like smart thermostats, smart smoke detectors, and smart temperature sensors are fairly cheap and easy to install, making them accessible to the average homeowner. While there's still plenty of confusion around smart home products, there's surprisingly high awareness and interest in these products.

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In a recent report from BI Intelligence, we discuss why we expect the devices to become more prevalent in homes in the next two years, when growth will peak.

• Familiarity: The devices are simply updated versions of common household devices that many households use on a daily basis, like a security monitor or oven. At this point, almost any piece of home equipment can be updated with a connected version. There is even a connected outlet made by Zuli so that any electronic device, old or new, can be plugged into the wall and controlled via a smartphone or tablet.
• Cost-savings: Two of the biggest selling points across the connected-home category are efficiency and cost-savings, and there is massive appeal in both. Connected-home device makers are effectively helping consumers update their homes while also making their lives easier and less costly.

For these reasons, interest in connected home devices and uptake is on the rise:

• In the US, nearly two-thirds of households that use broadband internet are interested in a connected-home device bundle from their wireless service providers, according to fourth quarter 2013 survey data from Parks Associates.
• That amounts to roughly 60 million households in the US alone among 91 million total US households with broadband.
• As prices decline over the long run and consumers become more familiar with connected-home devices overall, expect smart-appliance growth to accelerate. That said, smart appliances will remain the smallest piece of the connected-home device market throughout the forecast period.

In full, the report:

• Forecasts annual shipments of connected-home devices between 2014 and 2019.
• Estimates the connected-home market's annual revenue potential between 2014 and 2019.
• Breaks down connected-home market shipments by device category, including home-energy equipment, safety and security systems, and smart appliances.
• Discusses current consumer uptake of connected-home products and potential barriers to mainstream adoption.
• Pinpoints companies that have had early success in the market and examines the potential for heavy market consolidation.

BII