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The Connected Home - UK - June 2019

Covered in this report

For the purposes of this report the labels ‘smart’ and ‘connected’ refer to a family of features including: home automation and adaptive behaviour powered by machine learning; connectivity with other devices (including, but not limited to, a user’s smartphone) via various protocols (including Wi-fi and Bluetooth); and providing users with data on device usage (eg energy consumption data).

Devices referred to as ‘smart’ and/or ‘connected’ may have some, but not all of these features. The connected home products included within the scope of Mintel’s consumer research for this report are:

  • Smart heating appliance/thermostat (eg Nest Learning Thermostat, Hive Active Heating)
  • Smart security devices (including door locks, cameras and sensors)
  • Smart lighting (eg Phillips Hue)
  • Smart appliances (eg fridges)
  • Smart audio speakers (eg Sonos Play)
  • Smart home hub controllers (eg SmartThings Hub)
  • Voice-controlled speakers with embedded virtual assistants (eg Amazon Echo, Google Home)

“Growth in the connected home market is primarily being driven by voice-controlled smart speakers, with Amazon continuing to dominate the sector with its expanding Echo range. Competition in the smart speaker market and improving sound quality will support further growth over the next year. In the wider connected home market, many people still need convincing of the necessity of such devices, although heating, lighting and security are all delivering promising year-on-year ownership growth, with security showing most short-term potential among non-owners.”

– Matt King, Category Director, Technology and Media Research

This report examines the following issues:

  • The success of voice-controlled smart speakers must be used to drive the wider connected home
  • Maximising the potential of the smart security market

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Connected home growth largely reliant on desire for voice commands
              • Figure 1: Use of new technology in the last three months, April 2017-December 2018
            • Potential insurance savings drive interest in smart security
              • Figure 2: Ownership of smart devices for the home, October 2018
            • Companies and brands
              • Amazon dominates three quarters of voice-controlled speaker market
                • Figure 3: Brand of voice-controlled speakers in household, March 2019
              • Total connected home advertising spend falls in 2018
                • Figure 4: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by category, 2016-18
              • The consumer
                • Over four in 10 people have a connected home device
                  • Figure 5: Household ownership of smart Wi-fi-connected devices, April 2018 and March 2019
                • The expense of smart home devices is the main limit to growth
                  • Figure 6: Reasons for not buying smart home devices, March 2019
                • Security and safety devices are the most likely to attract new smart home customers
                  • Figure 7: Interest in smart home devices, March 2019
                • Video doorbells top the smart home security wish list
                  • Figure 8: Smart home security devices buying intention, March 2019
                • Online-only retailers the first port of call for smart security
                  • Figure 9: Smart home security purchase location, March 2019
                • Six in 10 people keen to use smart security for parcel deliveries
                  • Figure 10: Attitudes towards the connected home, March 2019
                • What we think
                • Issues and Insights

                  • The success of voice-controlled smart speakers must be used to drive the wider connected home
                    • The facts
                      • The implications
                        • Maximising the potential of the smart security market
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Connected home growth largely reliant on desire for voice commands
                                • Proportion of people renting could limit connected home investment
                                  • Amazon investing heavily in the connected home
                                    • Smart speakers becoming a key part of major sale events
                                      • Potential insurance savings drive interest in smart security
                                      • Market Drivers

                                        • Connected home growth largely reliant on desire for voice commands
                                          • Figure 11: Use of new technology in the last three months, April 2017-December 2018
                                        • Proportion of people renting could limit connected home investment
                                          • Figure 12: Home ownership, by age, March 2019
                                        • Amazon investing heavily in the connected home
                                          • Smart speakers becoming a key part of major sale events
                                            • Potential insurance savings drive interest in smart security
                                              • Figure 13: Ownership of smart devices for the home, October 2018
                                          • Companies and Brands – What You Need to Know

                                            • Amazon dominates three quarters of voice-controlled speaker market
                                              • Apple’s late entry to the market has limited HomePod take-up
                                                • Google rebrands Home Hub and launches Nest Hub Max
                                                  • Amazon upgrades Echo range and launches Echo Sub
                                                    • Total connected home advertising spend falls in 2018
                                                    • Brand Ownership – Voice-controlled Speakers

                                                      • Amazon dominates three quarters of voice-controlled speaker market
                                                        • Google continues to expand range to challenge Amazon
                                                          • Apple’s late entry to the market has limited HomePod take-up
                                                            • Figure 14: Brand of voice-controlled speakers in household, March 2019
                                                        • Launch Activity and Innovation

                                                          • Google rebrands Home Hub and launches Nest Hub Max
                                                            • Figure 15: Google’s Nest Hub Max
                                                          • Amazon upgrades Echo range and launches Echo Sub…
                                                            • …alongside its first smart plug
                                                              • Figure 16: Amazon Smart Plug
                                                            • Samsung set to enter voice-controlled speaker market with Galaxy Home
                                                              • Figure 17: Samsung’s Galaxy Home smart speaker
                                                            • Apple expected to release second-generation HomePod in 2019
                                                              • Echo devices begin supporting Apple Music
                                                                • Amazon rolls out Alexa Guard security in the US
                                                                  • Bang & Olufsen brings Google Assistant to the luxury speaker market
                                                                    • Figure 18: Bang & Olufsen’s Beosound 1 and 2 speakers
                                                                • Advertising and Marketing Activity

                                                                  • Total connected home advertising spend falls in 2018
                                                                    • Amazon remains by far the largest smart home advertiser
                                                                      • Figure 19: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by category, 2016-18
                                                                      • Figure 20: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by advertiser, 2018
                                                                    • Nearly two thirds of connected home advertising budgets focused on TV
                                                                      • Figure 21: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by advertising medium, 2018
                                                                    • Nielsen Ad Intel coverage
                                                                    • The Consumer – What You Need to Know

                                                                      • Over four in 10 people have a connected home device
                                                                        • Voice-controlled speakers now lead the connected speaker market
                                                                          • The expense of smart home devices is the main limit to growth
                                                                            • Security and safety devices are the most likely to attract new smart home customers
                                                                              • Video doorbells top the smart home security wish list
                                                                                • Twice as many would pay for professional installation than would do it themselves
                                                                                  • Six in 10 people keen to use smart security for parcel deliveries
                                                                                  • Ownership of Connected Home Devices

                                                                                    • Over four in 10 people have a connected home device
                                                                                      • Voice-controlled speakers now lead the connected speaker market
                                                                                        • Smart domestic appliances struggling for growth…
                                                                                          • …while connected security shows promise
                                                                                            • Figure 22: Household ownership of smart Wi-fi-connected devices, April 2018 and March 2019
                                                                                          • The expense of smart home devices is the main limit to growth
                                                                                            • Convenience and function must overcome technological overload
                                                                                              • Privacy remains an issue with concerns over device hacking
                                                                                                • Whole-home cybersecurity potential
                                                                                                  • Figure 23: Reasons for not buying smart home devices, March 2019
                                                                                              • Interest in Connected Home Devices

                                                                                                • Security and safety devices are the most likely to attract new smart home customers
                                                                                                  • Control of heating and lights is key market for the connected home
                                                                                                    • Interest in connected speakers points to further market growth
                                                                                                      • Long lifecycle of domestic appliances limits upgrades to smart devices
                                                                                                        • Figure 24: Interest in smart home devices, March 2019
                                                                                                      • Men showing more interest in the connected home…
                                                                                                        • …while high interest among younger demographics points to long-term growth
                                                                                                          • Figure 25: Interest in smart home devices, by age, March 2019
                                                                                                        • Half of parents of under-18s interested in voice-controlled speakers
                                                                                                          • Figure 26: Interest in buying a smart voice-controlled speaker, by parental status, March 2019
                                                                                                      • Security and the Connected Home

                                                                                                        • Video doorbells top the smart home security wish list
                                                                                                          • Far greater interest in house alarms than damage prevention sensors
                                                                                                            • Half of those interested in connected security considering smart locks
                                                                                                              • Figure 27: Smart home security devices buying intention, March 2019
                                                                                                            • Online-only retailers the first port of call for smart security
                                                                                                              • Figure 28: Smart home security purchase location, March 2019
                                                                                                            • Twice as many would pay for professional installation than would do it themselves
                                                                                                              • Figure 29: Smart home security installation, March 2019
                                                                                                            • Security subscriptions find favour with the under-45s
                                                                                                              • Figure 30: Smart home security subscriptions, by age, March 2019
                                                                                                          • Attitudes towards the Connected Home

                                                                                                            • Six in 10 people keen to use smart security for parcel deliveries
                                                                                                              • Figure 31: Attitudes towards the connected home, March 2019
                                                                                                            • Automated household orders could drive the connected home
                                                                                                              • Figure 32: The connected home – CHAID – Tree output, March 2019
                                                                                                            • Over half of 16-34s keen to use voice commands to shop online
                                                                                                            • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                • Abbreviations
                                                                                                                  • Consumer research methodology
                                                                                                                    • CHAID analysis – Methodology
                                                                                                                      • Figure 33: The connected home – CHAID – Table output, March 2019

                                                                                                                  The Connected Home - UK - June 2019

                                                                                                                  £1,995.00 (Excl.Tax)