Australian IoT@Home market cracks $1bn, paving the way for IoT-Commerce services

Australian households forecast to have more than 37 connected devices by 2023

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SYDNEY, AUSTRALIA – The Australian IoT (Internet of Things) at home (IoT@Home) market grew 57 per cent during the past 12 months to $1.1 billion in 2018 and is forecast to reach $5.3 Billion by 2023, according to new research from Australian emerging technology analyst firm, Telsyte.

 The Telsyte Australian IoT@Home Market Study 2019, now in its seventh edition has found more than five million Australian households (more than 50 per cent of total households) have started the smart home journey with at least one IoT@Home product installed by the end of 2018.

 The increase of more than 30 per cent – from around 4 million households in 2017 – was primarily due to surging adoption of smart speakers.

 Amongst the five million IoT@Home adopters, Telsyte research finds around a quarter are considered “invested” in smart home technology, with at least five different IoT@Home products already installed in the home (e.g. cameras, smart plugs, smart lighting and smart appliances).

 This figure is set to grow even further with Telsyte predicting the average household in 2023 will have 37 devices, around half being IoT@Home devices.  At the end of 2018, the average Australian household had 17 connected devices, primarily made up of smartphones, computers, tablets and other gadgets.

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 These “invested” IoT@Home adopters are more likely to be younger families and tech enthusiasts who have a range of consumer devices, such as drones, VR headsets, and location tracking tags.

 Telsyte’s research shows rising energy costs has been driving adoption of smart energy solutions and government’s investment in renewable energy and subsidies for smart batteries are expected to boost the IoT@Home smart energy segment in the medium term.

 The smart energy segment is now worth over one-third of the total IoT@Home market by revenue.

 Smart connected appliances (e.g. whitegoods) are expected to be the longer term IoT@Home market revenue driver beyond 2020, making up around 40 per cent of the industry’s annual revenue by 2023.

 Telsyte Managing Director, Foad Fadaghi, says there is a growing demand for smarter homes.

 “Nearly a third of Australians are interested in modernising their current residence to make it smarter,” Fadaghi says.

 Among people looking to spend to make their home smarter, more than 40 per cent of their budget is set to be spent on improving energy efficiency or making the home safer.

 More devices calling for more services

 While DIY IoT@Home solutions have been gaining popularity, there are new opportunities for professional installers and services providers.

 The market is ready for professional services with Telsyte research showing 45 per cent of Australians value an installer’s advice, and one in three households will require professional assistance to setup smart devices or appliances.

 Support services will be most important for sophisticated devices such as smart intercoms and smart locks and other smart sensor-based products such as smart water taps.

 In fact, one in three Australians are interested in monthly subscription IoT@Home services such as home security monitoring and energy monitoring and optimisation services.

 Surge in smart speakers drives market growth

 Australia’s IoT@Home market continued to benefit from surging smart speaker adoption and Telsyte forecasts the smart speaker category will continue to be the most successful IoT@Home product throughout 2019 with 2.5 million (26%) Australian households using smart speakers by end of the year, up from 1.6 million (16%) in 2018.

 There is also a growing number of people interested in smart speaker applications. Some one in four IoT@Home adopters and potential adopters are interested in controlling IoT@Home and other connected devices, such as controlling lights and unlocking doors using smart speakers.

 ‘Getting everyday info’ overtook playing music as the most frequently used daily smart speaker application in 2018.

 While concerns remain around privacy and security, Telsyte’s research shows there is a growing acceptance of smart speakers having access to different applications, devices and data sources, particularly amongst entertainment-related apps and security cameras.

 Google remained the leader in the smart speaker market in 2018 with over 70 per cent of the main smart speakers sold being the Google Home series. Telsyte forecasts Google and Amazon smart “assistant” speakers will continue to be the top two sellers during 2019.

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 Homes getting ready for nbn™ and 5G connectivity

 Smart homes need speedy connectivity and Australia is entering a new era of nbn™ and 5G wireless broadband services.

 Telsyte’s latest consumer research shows nbn is the most important IoT@Home related feature when Australians move into a new home, when either renting or buying.

 Ample built-in power plugs around the house to charge more connected devices as well as fixed network connections in rooms are seen as important.

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Telsyte forecasts more IoT@Home devices such as smart security cameras that are 5G-capable will be offered as part of an IoT@Home subscription service.

 Despite concerns around increasing usage of AI, Telsyte research shows close to half of people are open to the idea of having a more automated approach, including utilising AI, for home security. For example, being alerted to trespassing or unusual activities around the home based on facial recognition.

 Smarter homes open new world of commerce

 A new paradigm for digital commerce that is coming which is set to have as much impact as eCommerce and mCommerce before it. 

 Telsyte defines this as IoT-Commerce which encapsulates purchases enabled or facilitated by smart appliances (e.g. smart fridges) and other IoT@Home products such as smart speakers. While its early days, Telsyte predicts IoT-Commerce will become mainstream within 10 years’ time.

 Telsyte’s latest digital consumer study found “convenience” is overtaking price as the number one factor for purchasing goods online instead of in-store. The natural extension of this is for sellers to look at technologies that can generate greater convenience than current eCommerce experiences and IoT@Home technology is a key enabler.

According to Telsyte’s research, close to half a million Australian households have subscribed to recurring delivery services during 2018, including services such as weekly meal delivery services or pet product delivery services, paving the way for more automated buying systems.

 “IoT-Commerce is set to provide a more seamless and hassle-free experience when shopping for everyday household items, automating the process and freeing up time for Australians,” Fadaghi says.

 However, Telsyte recognises key challenges exist with IoT-Commerce, including resistance from existing channels and supply chains, as well as technical challenges in getting fragmented systems to work together.

 Telsyte predicts by 2040, at least a quarter of appliances will have built-in sensors and partnerships to facilitate IoT-Commerce in countries like the USA, UK, Australia and New Zealand.

 By 2040, Telsyte forecasts the IoT-Commerce market could be worth more than $100 Billion in Australia, or equivalent to around 20 per cent of consumer retail trade by then.

 While there are similar privacy and data security concerns for IoT-Commerce compared to overall IoT@Home adoption, Telsyte research found saving money in the long term and the potential for free appliances in exchange for longer term service agreements (e.g. a free fridge for a multi-year minimum spend grocery provision agreement) might help the market grow.

IoT@Home segments covered:

IoT-Commerce segments covered:

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 For further information on the study 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

 The Telsyte Australian IoT@Home Market Study 2019 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 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.

  • Analysis of market potential for IoT-Commerce, enabled by IoT@Home products, voice and AI

 In preparing this study, Telsyte used:

  • Telsyte’s annual Smart Home survey conducted during November and December 2018 with a representative sample of 1,025 respondents, 16 years and older.

  • Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.

  • Financial reports released by service providers and manufacturers.

  • On-going monitoring of local and global market and vendor trends.

  • Analyst reviews of leading smartphone and wearable devices.

 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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