Smart home automation revenues to exceed $45bn by 2023 as smart security dominates the market
A new study from Juniper Research has found that increasing smart security adoption will drive home automation and monitoring revenues from an estimated $12 billion (€10.15 billion) in 2018 to over $45 billion (€38.07 billion) by 2023, representing a growth of over 260%.
The research found that smart security is a driving force behind this market growth, with manufacturers such as Nest, Hive and Netgear producing compelling mass market products. This move is reinforced by the heavy focus by big players on smart entry solutions, as evidenced by Amazon’s acquisition of Ring.
Interoperability of ecosystems driving ease of use
The new research, Smart Homes: Vendor Analysis, Impact Assessments & Strategic Opportunities 2018-2023, established that major vendors are concentrating on building out their ecosystems, with corporate partnerships and acquisitions being primary tools. Juniper predicted that open ecosystems will rapidly accelerate growth, reaching 1 billion automation and monitoring devices by 2023, up from 176 million in 2018, leading to benefits for both consumers and vendors.
This approach has been aided by increasing device interoperability and in turn, consumer convenience. Meanwhile, the increasing ubiquity and low-entry cost of open platforms such as Alexa are leaving players with closed ecosystems, such as Apple, exposed.
Research author, Nick Maynard explained: “The smart home makes the biggest impact upon customers when it is seamless. By offering services across ecosystems, vendors are broadening their markets, allowing vendors to compete on features rather than compatibility.”
Smart home automation drives insurance opportunity
The research also found that the smart home represents a significant opportunity for insurers to boost their appeal to consumers. Juniper estimates that during 2018, around 65 million new home insurance policies will leverage smart home technologies.
By implementing technologies such as water leak detectors and smart smoke alarms, insurers can add greater value to existing relationships and generate loyalty. Juniper recommends that this is critically important as price comparison websites have devalued the existing insurer-customer relationships.