Over the last two decades technological innovations have transformed the way that we engage with people, products and services and generally how we experience our lives. But little has changed with how we engage with our homes, our primary place of comfort, well-being, financial security and a significant driver of our lifestyles.
This piece is the first in a three part series that explores the emergence and potential of the connected home.
1. The practical reality of the connected home
2. The next move companies must make to capitalise on market opportunities and challenges
3. The defining capabilities of a player in the connected home market and who these 'winners' are likely to be
The connected home is ‘anyone’s game’. Developments in digital technology are unbundling and recombining industries, creating new markets and sources of value. By 2020, we predict that the connected home market could be worth almost US$150 billion globally.
Right at the centre of this new market is the consumer. No longer just a place for sleeping, eating and relaxing, the home is being remodelled into a connected and personalised ecosystem of services.
We believe there are 10 key developments emerging from the industry that will be able to deliver value to consumers by 2020. Each of these technologies are at different levels of maturity but the market is new and open, presenting opportunities for a variety of companies to establish themselves within individuals’ most valuable assets: their homes.
To explain the benefit of the connected home, we have developed four consumer lenses which individuals or companies can use to frame the value of their connected products.
The connected home revolves around increased machine-to-machine communication. The growth of intelligent devices that gather data and act on it is creating new interactions that offer cost and time savings to consumers, amongst other benefits. With so many devices emerging, consumers and companies face challenges in aligning device communication.
Energy is critical for the connected home as it provides the supply of power for devices to communicate. Developments in technology create new ways to align supply with demand. Smart meters and future disruptive devices present the possibility for households to manage consumption more efficiently, generating cost and environmental savings.
Distributed energy resources and storage technologies offer the potential for a structural shift in energy supply and production. This is an industry set for transformation but successful companies must entice consumers with a clear value proposition and be guided by well-defined regulation.
Home appliances have traditionally been stand-alone products optimised for their set functionality. However, as sensors and data management technologies proliferate the standard of devices changes enabling new interactions. With inertia in the purchasing of durable goods the growth of connected appliances may be slower than other parts of the home.
Entertainment companies have been some of the earliest adopters of connected technologies. In a short timeframe, there has been a shift from programmed content, to individuals consuming their own personalised preferences. A critical service offering in the home, partnering with key players is an essential strategic move for up-and-coming entrants.
The potential for connected climate control systems centres on the extent to which they can reduce household bills while maximising comfort. Successful innovations will not only allow users to view their energy consumption, but will automatically find ways to reduce costs, without impacting on lifestyle.
Connected safety and security systems and devices with remote monitoring capabilities are already becoming standard devices in technology savvy households. The extent to which privacy and intrusiveness concerns play out will determine the strength and fortune of this potentially critical home service offering.
It may seem strange that bulbs have been around since the 1800s. Whilst cheap to purchase, the majority of bulbs are very inefficient, and now the market is seeing a progression towards more efficient LED lighting. The connected home provides an opportunity to modernise and revolutionise lighting.
The reach of the connected home will go beyond four walls. Connected vehicles can bring advantages, such as increased safety and security on the road and in the home. The technological and behavioural changes related to connected vehicles will have large impacts for both drivers and a variety of industries.
Wearable technology provides an easy and personal way for individuals to communicate with connected technologies. Monitoring physical vitals has real implications for creating the right ambience in your home as well as for healthcare. For some an unnecessary complication, for others a vital accessory: their future application remains largely undefined.