Is the smart home just a pipe dream or will the general public finally adopt it?
The idea of the ‘smart home’ is based on an individual being able to connect to all of his or her appliances within the home remotely from a smartphone or tablet. Whether you'd characterise this as convenience or laziness, users can now turn their heating on whilst commuting back home in the evening and then watch Netflix on their new smart TV whilst heating up the oven from the sofa for their TV dinner.
Nest, a startup focused on internet-connected thermostats, smoke alarms and cameras has been the go-to brand for the Internet of Things within the home. Two years ago Google bought the company for $3.2 billion, however since its purchase it has not seen an increase in sales and has become quite stagnant. However this is not just a failing on behalf of Nest. Deloitte’s Mobile Consumer Survey 2016 has shown that connected home devices still haven’t taken off, with just 2% of adults owning smart lights and smart appliances.
Another issue with the concept of the smart home is that in order for it to be a success, people need to have constant access to a tablet or smartphone. According to the same report by Deloitte, the tablet market is now saturated. Growth in tablet ownership has fallen by 15% in the last year. By mid-2016, almost two-thirds of UK adults had access to a tablet, but this penetration has now stabilised. This indicates that tablets will become less of a driver of 'smart home' growth amongst homeowners and without these portals into the ‘smart home,’ certain elements of accessibility need to be rethought, including whether smartphones and tablets are the best ways of interacting with all appliances.
We can see Nest’s innovation rate in the line graph above and it shows a decrease in the number of patents filed and granted over the last year. Does this show that innovation in this space is slowing down? Not necessarily. First, we do not have a complete picture for 2016 yet - and 2015 certainly shows a healthy uplift over 2014.
In order to obtain a clearer picture of innovation in this space, we would have to go broader than looking at Nest alone and consider where the 'smart home' concept sits within the technology cycle. We recently heard from Ali Hussein, senior product liaison at PatSnap, who covered the concept of technology cycles from an innovation perspective, based on the graph below. The chart depicts a variety of patterns witnessed within technology trends in an industry area. Anyone with an interest in a specific technlogy should consider which of the curves below best represents the innovation rate of the technology in question.
Will more people adopt smart home appliances? Is it the cost of products like Nest that is hindering its sales? If the price was the same as the standard thermostat would everybody have them or do you have to have a certain mindset to own such appliances? Whatever the future for this market, we will certainly be keeping a close eye on which smart home technologies start ramping up within R&D and innovation.