by Lisa Arrowsmith, Director – Connectivity, Smart Homes & Smart Cities, IHS Technology
Cloud-based home management systems that allow users to remotely control household features like lighting and air conditioning are predicted to grow rapidly in the next few years.
Other examples of use-cases for cloud home management include: receiving a notification on a smartphone or tablet when children return home from school; remotely adjusting the temperature of the home while at work via a smartphone, tablet or computer; and receiving alerts if an elderly relative deviates from his or her normal routine.
Smart home service provider landscape: a diverse mix
The types of companies offering cloud-based home-management systems are diverse. One major group consists of existing service providers who have other core business lines; examples are security or telecommunications providers and utility companies. Many of these companies have entered the home-management market to reduce customer churn or to increase new subscriber rates and average revenue per user (ARPU).
Other types of companies also are entering the fray, including device suppliers and retailers. Smart home specialists are expected to play a major role in the deployment of smart home services globally. This category of companies includes both home automation providers that are moving their existing customers to cloud-based services by providing an external communications gateway and an associated backend service; alongside a new breed of connected home specialists, such as Nest, Revolv, SmartThings and others.
Smart home services market to vary regionally
The smart home service provider landscape is projected to vary widely by country. In North America, security providers, such as ADT, Alarm.com and Vivint, have been at the forefront of the market, providing combined smart home and professionally monitored security systems. Telecommunications companies, such as Comcast or AT&T, also play a major role.
In the European, Middle Eastern and African region (EMEA), utility companies are expected to dominate, accounting for one-third of the installed base at the end of 2018. Utility companies already offering or developing smart home devices or services in Europe are believed to include British Gas, Essent, Eneco, Nuon, RWE, EnBW and Eon. European multiservice operators (MSOs) have generally been slower to enter the smart home service market than those in North America, although there have been exceptions such as Bouygues Telecom and Swisscom. Others, such as SFR and Orange, have also now entered the market, with more expected to follow.
In the Asia-Pacific region, some multiservice operators have been offering basic smart home services for a number of years, although volumes have remained relatively low. As more enter the market, with wider value propositions and attractive tiered pricing, the role of MSOs is set to grow.
However, it is device suppliers that are expected to drive the majority of growth in Asia-Pacific. In some cases, the device suppliers are expected to focus on the creation of the “smart” hardware, using open standards to make it compatible with services from other companies. However, some appliance suppliers are expected to also “own” the backend system used, creating their own branded smart home service platforms.
Smart Home Services Set for Rapid Growth
Growth in the adoption of smart home services is set to increase rapidly, in part due to the diverse supplier mix that allows consumers to obtain different services from the company types they find most appealing in this segment. According to the IHS Technology “Smart Home Subscribers Intelligence Service,” the global installed base of cloud-based home management services, is projected to grow to 44.6 million at the end of 2018, up from 5.6 million at the end of 2013 (see above chart).
The installed base this year is expected to surge 63 percent to 9.1 million.
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