Australian household expected to have 29 internet connected devices in the home by the end of the decade
SYDNEY, AUSTRALIA – Australian consumers are on the verge of embarking on a spending spree on Internet-connected devices for their homes to control everything from security cameras to heating and cooling systems, according to a new market study by emerging technology analyst firm Telsyte.
Telsyte forecasts early adopters will spend about $383 million on range of products and services categorised as part of the “Internet of Things”, or IoT, for the home in 2016, growing rapidly to $4 billion by 2020. Telsyte estimates that consumers spent $231 million in 2015.
Growth is expected to accelerate in 2018, as a range of new products come onto the market and manufacturers integrate wireless chipsets into the majority of their product ranges. The fastest growing segments is anticipated to be smart appliances and IoT@home services which includes cloud-based “intelligent” services.
|Annual revenue ($ Millions)
|Smart Energy - Includes smart sensors, power points, lighting, and other components or as part of an energy system.
|Smart Security – Includes alarms, cameras (including baby and pet monitors), motion sensors, smart locks, and other components such as intercoms.
|Smart Lifestyle – Includes whitegoods, smart gardening and other home lifestyle products (including pool and garage)
|Smart hubs (dedicated) – used to control (via voice or other mechanisms) components of a smart home
|IoT@home services and installation (including installation, subscriptions, managed services and smart cloud services)
Telsyte estimates that the average Australian household has 11.0 connected devices in 2016, up from 9.2 in 2015. Telsyte forecasts this to expand to 28.7 by 2020, as internet connectivity increasingly becomes built into a range of every day appliances*.
Telsyte predicts four main themes will be critical to the acceptance of IoT@home technologies:
- Integration with existing mainstream smartphone and app ecosystems, whereby users can control features and be alerted via their smartphones and smart wearable devices.
- A modular approach and gamification, which will encourage users to easily add modules (or devices) to their IoT@home environment through recommendation engines and offers, or as new products become available. The ability of devices to interact with each other and appear in the same app will be critical.
- Intelligent features that use cloud-based machine learning to provide lifestyle benefits which go beyond self-monitoring and user driven outcomes. For example, a camera system that automatically detects a suspicious person repeatedly walking past a home, and alerts the home owner.
- Voice control and recognition is expected to be the important mechanism for control of smart appliances and services. Telsyte research shows one-third of early adopters have used voice commands on their smartphones with greater than 75 per cent of those indicating a good or adequate experience.
According to Telsyte research, despite the expected rapid adoption, barriers such as concerns around cyber security and privacy, and high upfront costs will need to be overcome. Telsyte also found a strong correlation between those interested in IoT@home products and consumers who are environmentally conscious and look to purchase ‘green’ products.
IoT@home is also expected to be a new battleground for telecommunications companies as they seek to differentiate themselves in an increasingly price competitive marketplace driven by widespread 4G adoption and the metropolitan rollout of nbnTM services.
“While carriers will seek to lock consumers in to longer term contracts by dangling the IoT@home carrot, they will need to be more flexible and look at a trial periods, pay-as-you-go, and a modular approach to be successful,” Telsyte Managing Director Foad Fadaghi says.
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*Please note: estimates on connected devices also includes products in addition to the IoT@home taxonomy such as smartphones, tablets and smart TVs, games consoles and other devices.
Telsyte’s Australian Internet of Things @ Home Market Study 2016 is the fourth edition from a comprehensive study program which provides subscribers with:
- Market sizing and forecasts of the Australian IoT@home market
- Market drivers & challenges
- Consumer attitudes and technology adoption trends
- IoT@home user profile
- Analysis of the IoT@home ecosystem
In preparing this study, Telsyte used:
- Interviews conducted with executives from service providers, network operators, manufacturers and channel partners.
- An online survey of a representative sample of Australians 16+ years of age conducted with 1,075 respondents in November 2015.
- Financial reports released by service providers and manufacturers.
- On-going monitoring of local and global market and vendor trends.
Telsyte delivers strategic insights and advisory services to businesses that are producing, or are impacted by, disruptive technologies. Telsyte publishes studies into emerging consumer and business markets and provides custom research and advisory services. Telsyte is an independent business unit of CSC. www.telsyte.com.au
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