What’s Holding Back the Smart Home from Mass Adoption?

Security and privacy features, interoperability, perceived value, and price will be the tell-alls on how we innovate.

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With the number of devices that are already in the market, it is easy to think the smart home market is on its way to maturity. Between smart thermostats, voice assistants, security systems, smart appliances, intelligent lights, and so many other devices, consumers have numerous options. But for a vision that’s been painted over 20 years ago and cartooned through the Jetsons, the smart home is just at the start line.

Although 2017 was predicted to be the “year of the smart home,” by the end of the year, only 16.3 percent of U.S. homes are projected to be smart homes. Regardless, there’s evidence the market will grow at staggering rates over the next few years, reaching a projected $79.2 billion by 2021 with more than 50 percent of households becoming smart homes.

I believe the market represents an important opportunity for consumer product OEMs that develop devices, appliances, security and lighting to deliver differentiated products with new functionality and connectivity.

Then what will it take for the smart home to reach its maximum potential? Overcoming challenges through innovation. Together, we will navigate this complex ecosystem to help the smart home “cross the chasm” beyond early adopters – because the smart home will transform the way we live. We’re sure of it.

The Smart Home Must Establish Safety and Security

With more than 4,000 business cyberattacks taking place daily and some very visible hacks over the last year (Uber, Yahoo, Xbox 360, among others), it is easy to understand why consumers are concerned with the safety and security of their smart home.

After all, not only do consumers have to worry about their individual homes having a potential breach, they must also worry about the cloud service provider experiencing any breaches. In fact, 10 percent of American consumers say they were victims of online attacks on their home devices, which makes both of our scenarios viable concerns.

The reality is that security is fundamental. Your consumers must feel that their devices not only work flawlessly, but also secure your private data. Every time we hear about a security flaw that affects the home, companies suffer from it and consumer appetite for the technology slows down. But this offers a unique challenge for brands and their ecosystem partners to solve through innovation – building trust by making device safety and security a priority.

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Where is the Interoperable Smart Home Ecosystem?

In our current state, with each connected device we add into our home, we also take on one more app or management tool for the system. The device likely speaks to our smart phone and smart home hub (Amazon Echo, Harmony, Wink, etc.), but that is the extent of interoperability today.

Building a true smart home ecosystem will require a level of interoperability that is uncommon in today’s market. I believe there is going to be one pillar that will make the total ecosystem for the home – an orchestrator that will facilitate data between numerous devices, managed through one system or application. This system will allow consumers to connect their new devices to their home AND to each other.

Technology early adopters are used to buying the newest gadgets and hardware while finding ways to connect them. But for mainstream adoption to take place, the orchestrator will be key to pull the technologies together and provide a seamless user experience across brands and devices. There isn’t an immediate answer today, but I believe that’s where we are headed in the smart home market. The “orchestrator” will be a game changer.

The Perceived Value of the Smart Home Ecosystem

Value is an underestimated element in the smart home. When we look at it from the perspective of smart phones, 77 percent of the U.S. population have adopted smart phones. We can’t put down our smart phones, because they are a gateway to value – connectivity, business, education, entertainment, utility, and so much more.

Like the smart phone, the devices that power our smart home must also deliver on their promised value. But just because a microwave can have an integrated audio technology, doesn’t mean it should serve as a home sound system to recite the daily news. Manufacturers must think about the main purpose of a device and determine how it can be amplified with additional convenience or interoperability.

User experience heightens the perceived value. When a consumer must go through complicated steps just to set up a system, frustration takes over and the brand inserts doubt into the experience almost instantly. Devices that are plug-and-go provide that extra perceived value. I believe this will become a universal standard to succeed in the market.

It Comes Down to Price

In the case of certain devices, the price alone can be a detractor for consumers. Take appliances for example. Brands have been introducing smart refrigerators at a price point of nearly $5,000, for additional capabilities like inventory control and camera functionality. For the mainstream customer, that’s a number that will make them think twice.

If the interactive, smart experiences come at a relatively higher price than an average device or appliance, consumers may be more inclined to make the investment. But if they are looking to buy a coffee machine at a price point of $75-$100, going significantly higher for the smart experiences most likely will not entice the average consumer.

Although the smart home is just at the start line, it is only a few hurdles away from mainstream adoption. As more connected consumer technologies waltz into the market, security and privacy features, interoperability, perceived value and the price will be a tell-all on how we innovate. We will face new opportunities to innovate once we overcome these challenges. My prediction is that we will experience significant growth in the smart home market in the next few years, as a result of increased levels of innovation and vastly improved user experience.

Written by Sam Salem, Senior Director – Technology and Strategic Development, Connected Consumer Technologies, Jabil