Smart speakers help send Australian IoT@Home market skyward

Concerns around privacy and security of connected devices persist

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SYDNEY, AUSTRALIA – The Australian Internet of Things at home (IoT@Home) market grew 55 per cent in 2017, reaching $583 million according to new research from emerging technology analyst firm Telsyte.

The Telsyte Australian IoT@Home Market Study 2018 found rapid uptake in smart speakers, as well as increasing internet connectivity of appliances such as air conditioners and security cameras, is creating the foundation for an Internet-connected device explosion expected to accelerate beyond 2020.

According to Telsyte research, the average Australian household has 17.1 connected devices in 2018, up from 13.7 in 2017. Telsyte forecasts this number to grow to 37 by 2022 or 381 million Internet-connected devices nationally. Most of this growth is expected to come from IoT@Home devices and associated services, which Telsyte categorises into smart energy, smart security, smart lifestyle and smart hubs. (see coverage figure below)

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Telsyte believes the smart lifestyle sector, which consists of whitegoods, appliances and house & garden products, will be the largest sector by 2022, as manufacturers bring to market products that have Internet connectivity as a standard feature. This contrasts with today’s market where smart appliances can command a significant premium.

“Building connectivity into consumer products will allow manufacturers to develop new business models and provide intelligent services that not only change consumers’ lifestyles, but disrupt a number of traditional industries”, Telsyte Managing Director Foad Fadaghi says.

Telsyte research shows a clear shift in where consumers start their IoT@Home journey. More consumers are now interested in enhancing their kitchen with smart speakers and smart appliances.

However, despite the potential growth of the IoT@Home market, challenges such as privacy and cyber security concerns are impacting consumer appetite. Some 41 per cent of Australians are “more concerned about cybersecurity than last year” and 61 per cent are concerned about their private information being exposed online, up 5 per cent from the previous year.

Smart speaker sales boom, laying the foundation for an IoT@Home explosion

Telsyte estimates around half a million Australian households currently own a smart speaker, up from less than 10,000 in 2016. Telsyte forecasts around 3 million Australian households will have a smart speaker by 2022.

The smart speaker category was the fastest growing IoT@Home product in 2017, with Google Home and Google Home mini being the market leaders driven by holiday season sales, free giveaways with Pixel 2 smartphones, and multipack offers. Telsyte expects Apple and Amazon to catch up as their products became more widely available in 2018.

This surge in smart speaker adoption is expected to lay the foundation for demand for other IoT@Home products. Telsyte research shows smart speaker users are twice as likely to purchase other IoT@Home products compared to non-users.

The study also found that around 87 per cent of smart speaker users are seeking advanced IoT@Home functions based on AI and machine learning, compared to 68 per cent for those without smart speakers. Some examples include alerting if strangers are repeatedly appearing around the home, or air conditioners that adjust based on knowing a change in schedule through access to an online calendar.

The most important factor for consumers purchasing IoT@Home products are that they are easy to use or “just work”. This includes being easy to setup, and not requiring active human monitoring. 

Google sets the pace, but Apple users present an untapped opportunity

Despite Google’s early lead in the smart speaker market, Telsyte believes Apple’s loyal users base presents strong opportunities for third party manufactures.

At the end of 2017, Telsyte estimated there was 2.2 million Australians that use five or more Apple products and services compared to 1.2 million using Google products (using a similar methodology).

“The lock-in and ripple effects of Apple’s ecosystem amongst Australian families are too big for IoT@Home manufacturers to ignore”, Telsyte Senior Analyst Alvin Lee says.

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For further information on the report or media enquiries contact:

Foad Fadaghi
Managing Director
Tel: +61 2 9235 5851
Email: ffadaghi@telsyte.com.au

Alvin Lee
Senior Analyst
Tel: +61 2 9235 5890
Email: alee@telsyte.com.au

Telsyte’s Australian IoT@Home Market Study 2018 is a comprehensive study which provides subscribers with:

  • Market sizing and forecasts of the Australian IoT@Home market by detailed segments including services and installation revenues
  • Insights into consumer attitudes and technology adoption trends
  • Analysis of vendor strategies and key growth segments
  • IoT@Home user profiles, including early adopters, those on the verge of adopting and those not yet to be interested.
  • Analysis of the IoT@Home ecosystems
  • Analysis of retail and online channels and their importance to IoT@Home products
  • Insights into where consumers begin with IoT@Home journey and key market drivers expected to drive rapid adoption in different segments.

In preparing this study, Telsyte used:

  • Interviews conducted with executives from service providers, network operators, manufacturers and channel partners of IoT@Home products and services.
  • An online survey of a representative sample of Australians 16+ years of age conducted with 1,162 respondents in November 2017.
  • An online survey of a representative sample of Australians 16+ years of age conducted with 1,178 respondents in January 2018.
  • Financial reports released by service providers and manufacturers.
  • On-going monitoring of local and global market and vendor trends.

About Telsyte

Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC.technology. For more information visit www.telsyte.com.au

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