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Smart Homes - US - April 2016

"Only in the past few years has the smart home market emerged onto solid footing following a variety of early product failures, such as $20,000 smart refrigerators that were soundly rejected by consumers. The shift to a more attractive product mix came when manufacturers not only brought down prices but also began to take consumer needs into greater consideration, rather than spending research and development budgets on products that did not solve a specific problem."
- Billy Hulkower, Senior Technology Analyst

This report discusses the following key topics:

  • Difficulty communicating product benefits
  • Custom install a tough sell
  • Home automation/security subscriptions pull consumers out of market

This Report further delineates those needs via both quantitative and qualitative research, and finds substantial and increasing interest in smart home devices that increase safety within the home or reduce power bills. Other motivations explored for adoption of smart home products include the convenience of remote access to home devices, again with data from original qualitative and quantitative research helping to wed insights to pressing concerns.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Difficulty communicating product benefits
            • Figure 1: Interest in remote access to home devices, December 2015
          • Custom install a tough sell
            • Figure 2: Professional electronics installation, by household income, December 2015
          • Home automation/security subscriptions pull consumers out of market
            • Figure 3: US home security subscriptions, 2012-15
          • The opportunities
            • Energy efficiency gateway to smart home
              • Figure 4: Attitudes to energy consumption, December 2015
              • Figure 5: Interest in energy consultations for the home, December 2015
            • Nowhere for penetration to go except up
              • Figure 6: Current ownership of smart home hardware, December 2015
            • Strong demand for heightening security, reducing power
              • Figure 7: Interest in acquisition of smart home hardware, December 2015
            • What it means
            • The Market – What You Need to Know

              • Sales of connected devices for the home triple from 2013-15
                • Number of households, spending on homes favors growth
                  • Installation, subscription services create challenges
                  • Market Sales

                    • Sales top $5 billion
                      • Figure 8: Manufacturer sales and fan chart forecast of security and connected devices, at current prices, 2011-20
                      • Figure 9: Manufacturer sales of security and connected devices, at current prices, 2011-20
                    • Connected devices growing fast but security retains bulk of sales
                      • Figure 10: Manufacturer sales of security and connected devices, at current prices, 2011-20
                  • Market Perspective

                    • Trouble communicating product benefits
                      • Remote access not for everyone
                        • Timing not of the essence
                          • Value of smart thermostats not self-evident to all
                            • DIY more attractive than professional installation
                              • Figure 11: Professional electronics installation, by household income, December 2015
                            • Subscriptions may negatively impact hardware sales
                              • Retail competes with subscriptions for security hardware
                                • Figure 12: US home security subscriptions, 2012-15
                              • Privacy, hacking, problematic for camera sales
                              • Market Factors

                                • Growth in US households
                                  • Figure 13: Number of US households, 2010-15
                                • Americans spending more on homes, gardens
                                  • Figure 14: Best- and worst-case forecast value sales of home and garden, at current prices, 2010-20
                                • Interest in reducing power bills
                                    • Figure 15: Attitudes to energy consumption, December 2015
                                  • Pets, kids, elderly create interest in monitoring
                                    • Figure 16: Interest in monitoring the safety of home inhabitants, December 2015
                                  • Households with children
                                    • Figure 17: Households with children, by age of householder, 2013
                                  • Parents remain top audience for smart home products
                                    • Figure 18: Interest in entertaining, green products, and new technology, by parental status, December 2015
                                  • Pet ownership
                                    • Figure 19: Types of pets living in household, February 2015
                                • Key Players – What You Need to Know

                                  • Vast majority unaware of smart home brands
                                    • Poor familiarity with protocols creates opportunities
                                      • Larger tech firms likely to overtake early movers
                                      • What’s Working?

                                        • Four connectivity brands carry double-digit awareness
                                          • Figure 20: Awareness of smart home brands, December 2015
                                      • What’s Struggling?

                                        • Networking protocols: The audience is not listening
                                            • Figure 21: Awareness of communication protocols, December 2015
                                          • Smart lighting brands jeopardized by low awareness
                                            • Figure 22: Awareness of smart lighting brands, December 2015
                                          • Broad audience for efficient lighting
                                            • Figure 23: Light bulb purchasing, December 2015
                                        • What’s Next?

                                          • Tech titans aim to own the smart home
                                            • Samsung
                                              • Samsung smart fridge headed to stores
                                                • Apple HomeKit
                                                  • Google Brillo and Weave
                                                    • Amazon Echo
                                                      • Microsoft and AllJoyn
                                                        • Retailers open smart home demos
                                                          • Wearables join forces with If This Then That (IFTTT)
                                                          • The Consumer – What You Need to Know

                                                            • Market still in early adoption
                                                              • Five products sought by more than a third of respondents
                                                                • Interest in home monitoring high
                                                                • Motivations for Adoption

                                                                  • Home safety a concern for some consumers
                                                                    • Figure 24: Concern over the safety of the home, December 2015
                                                                  • Younger adults more likely to worry
                                                                    • Figure 25: Concern over the safety of the home, December 2015
                                                                  • Entertaining and going green
                                                                    • Figure 26: Interest in entertaining and green products, December 2015
                                                                  • Young men want to impress others
                                                                    • Figure 27: Interest in entertaining and green products, by gender and age, December 2015
                                                                  • “Wow” factor, green status can increase product premiums
                                                                    • Figure 28: Interest in entertaining and green products, by household income, December 2015
                                                                • Remote Control of the Home

                                                                  • Phone as controller of choice
                                                                      • Figure 29: Interest in smart home convenience functions, December 2015
                                                                    • Young women see convenience in remote access
                                                                      • Figure 30: Interest in smart home convenience functions, by gender and age, December 2015
                                                                    • Interest in remote access high for categories with clear usage cases
                                                                        • Figure 31: Interest in remote access to home devices, December 2015
                                                                      • Younger consumers more desirous of remote access
                                                                        • Figure 32: Interest in remote access to home devices, by age, December 2015
                                                                    • Interest in Home Safety and Monitoring

                                                                      • Security and monitoring hardware a leading smart home category
                                                                          • Figure 33: Interest in and ownership of home security/monitoring, December 2015
                                                                        • Men 18-34 lead in interest in home security
                                                                          • Figure 34: Interest in home security/monitoring, by gender and age, December 2015
                                                                        • Home monitoring appealing to Hispanic audience
                                                                          • Figure 35: Interest in home security/monitoring, by Hispanic origin, December 2015
                                                                        • Urbanites seek security
                                                                          • Figure 36: Interest in and ownership of home security/monitoring devices, by area, December 2015
                                                                        • Homeowners, urbanites seek to secure their home
                                                                            • Figure 37: Interest in smart home products – CHAID – Table output, December 2015
                                                                        • Interest in Smart Lighting and Thermostats

                                                                          • Smart lighting and thermostats ready for mainstream adoption
                                                                              • Figure 38: Interest in and ownership of smart thermostats and lighting, December 2015
                                                                            • Urbanites ready to adopt products with panache
                                                                              • Figure 39: Interest in and ownership of smart thermostats and lighting, by area, December 2015
                                                                            • Capitalizing on synergy across categories
                                                                              • Figure 40: Interest in smart lighting, by attitudes to home technology, December 2015
                                                                          • Consumer Highlight – Parents

                                                                            • Home security/monitoring carry elevated interest for parents
                                                                              • Figure 41: Interest in home security/monitoring, by parental status, December 2015
                                                                            • Parents safe choice for creative materials
                                                                                • Figure 42: Interest in remote access to the home, by parental status, December 2015
                                                                              • Parents keen on keyless entry
                                                                                  • Figure 43: Interest and ownership in smart home products – CHAID – Tree output, December 2015
                                                                              • Interest in Multi-Room Audio

                                                                                • Half of adult consumers want multi-room audio
                                                                                  • Figure 44: Interest in and ownership of multi-room audio systems, December 2015
                                                                                • Young adults with high household income more receptive
                                                                                  • Figure 45: Interest in multi-room audio, by age and income, December 2015
                                                                                • New audio products may help young men impress guests
                                                                                  • Figure 46: Interest in multi-room audio, by gender and age, December 2015
                                                                              • Appendix – Data Sources and Abbreviations

                                                                                • Data sources
                                                                                  • Sales data
                                                                                    • Consumer survey data
                                                                                      • Consumer qualitative research
                                                                                        • Abbreviations and terms
                                                                                          • Abbreviations
                                                                                            • Terms
                                                                                            • Appendix – Additional Demographic Data

                                                                                              • Presence of children in the home
                                                                                                • Figure 47: Households, by presence of children, 2003-13
                                                                                            • Appendix – CHAID Analysis Methodology

                                                                                              • Appendix – Additional Consumer Data

                                                                                                • Interest in smart thermostats and lighting
                                                                                                  • Figure 48: Interest in smart lighting and thermostats, by gender and age, December 2015
                                                                                                  • Figure 49: Interest in smart lighting and thermostats, by parental status, December 2015
                                                                                                • Interest in remote access
                                                                                                  • Figure 50: Interest in remote access to home devices, by gender and age, December 2015
                                                                                                  • Figure 51: Interest in smart home convenience functions, by parental status, December 2015
                                                                                                  • Figure 52: Interest in remote access to home devices, by home ownership, December 2015
                                                                                                • Interest in home security hardware
                                                                                                  • Figure 53: Interest in home security/monitoring, by homeownership, December 2015
                                                                                                  • Figure 54: Interest in home security/monitoring, by attitudes to home technology, December 2015
                                                                                                • Energy efficiency
                                                                                                  • Figure 55: Perception of current home energy efficiency, by household income, December 2015
                                                                                                  • Figure 56: Perception of current home energy efficiency, by age, December 2015
                                                                                                  • Figure 57: Perception of current home energy efficiency, by Hispanic origin, December 2015
                                                                                                  • Figure 58: Perception of current home energy efficiency, by home ownership, December 2015
                                                                                                  • Figure 59: Interest in room-by-room temperature control, by gender and age, December 2015

                                                                                              Companies Covered

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                                                                                              Smart Homes - US - April 2016

                                                                                              £3,277.28 (Excl.Tax)