Since it began about six years ago, connected-home tech has been one of the most intensely debated and controversial consumer gadgets of our time. Nothing better illustrates this than the increasingly competitive Smart Home Expo in Atlanta, running Jan. 12-14 and showcasing the top innovations in the space.
According to industry research firm IHS Markit, by 2020 nearly half of all U.S. consumers owning a smart home—making $400 billion in sales of the devices and services—will participate in what’s been dubbed the “High Connectivity Home.” That means everything from refrigerators that can make ordering pizzas easier to appliances that can turn your smart phone into a remote control.
Smart technology has already become very cheap. IHS estimates the cost for the devices themselves will drop by a whopping 70% from $21,300 in 2018 to $11,500 in 2020. It’s the mobile component that will ultimately make this a very affordable product, say experts like Rory McLeod, founder of ARMVAV —a consultancy focused on the commercial and consumer smart home sector.
“It’s a challenge for manufacturers,” McLeod tells Forbes. “Once you have a $500 product, the expectation is that it’s all free because you are getting connectivity.”
Other things that have made the smart home a more mainstream idea today: people are now comfortable that devices can and will listen to them, and the technology already exists to identify individual people by what they are doing at home and understand preferences in certain areas. Tech giants also have an incentive to push this technology. Samsung has a very strong foothold in the smart home and needs to find new avenues to sell smartphones, TVs and other gadgets. Alphabet’s Google division is also moving fast into smart home, and Apple has just released its Apple TV streaming media platform.
And it’s unclear which of the leading manufacturers of smart appliances will prevail, in part because most of the industry’s rivals are now disrupting each other in new markets, such as luxury brands that are bundling their services on cars and smart homes, or making smartwatches that are part of the smart home equation.
Bundling has become a way for consumers to buy different products with customized access to features at multiple points of the home, says McLeod. Smartphone apps also allow for remote mobile access to locks and lights, while lights can be turned off from anywhere using an app.
Another factor is that the media and entertainment industries are getting into the fray, such as smart TVs from Samsung, LG and Vizio (which have VoD apps from streaming services Netflix and Amazon Prime). For consumers with limited Internet access, these networks will provide the portals to the connected home.
The smart home is simply getting more fun, and consumers and industry experts hope the devices can finally eliminate the nightmare of home ownership and rent conditions so many consumers face today.