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The Connected Home - UK - May 2018

“The appeal of connected home devices is increasing as second-generation products improve functionality and devices are released that cover broadening price points. Voice-controlled speakers have emerged as the main controller for the connected home, but whilst many products can now receive commands from these digital assistants, consumers still need convincing that voice control can provide a convenient alternative to mobile app control.”
– Andrew Moss, Consumer Technology Analyst

This report looks at the following issues:

  • Can digital assistants become ubiquitous in daily life?
  • Is the connected home suitable for the whole family?
  • The potential for voice to disrupt the grocery market

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Table of contents

  1. Overview

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

          • The market
            • Digital assistants battle for a presence in the home
              • Creating a more consistent user experience for third-party products
                • Voice-controlled smart speakers diversify, at the top end …
                  • … and at the budget end of the market
                    • The smart home presents an opportunity for insurers
                      • Companies and brands
                        • Amazon Echo leads share of voice-controlled speakers
                          • HomePod shows initial promise
                            • Google Home Max aims to compete on sound quality
                              • Echo Plus aims to provide a complete home hub
                                • Echo Show arrives in the UK
                                  • Hive and British Gas leads advertising of home automation
                                    • The consumer
                                      • Speakers the primary device for a connected home …
                                        • Figure 1: Household ownership of smart Wi-Fi connected devices, April 2018
                                      • … and these devices are key for connected home expansion
                                        • Multiple ownership will continue to grow
                                          • Smart thermostats boosted by partnerships with energy firms
                                            • Consumers open to smarter home security
                                              • Figure 2: Interest in smart Wi-Fi connected devices, April 2018
                                            • Smart security cameras have widespread consumer appeal …
                                              • … but people are still resistant to the idea of connected locks
                                                • Voice-controlled speakers pique interest of families
                                                  • Long upgrade cycle of home appliances limits interest …
                                                    • Few have actually tried out connected home devices
                                                      • Figure 3: Ways consumers have heard about smart home devices, April 2018
                                                    • Playing music is the key draw for voice-controlled speakers
                                                      • Figure 4: Regularity of activities performed with voice-controlled speakers, April 2018
                                                      • Figure 5: Functions that consumers interested in voice-controlled speakers are most likely to use, April 2018
                                                    • There are still problems to overcome when it comes to smart speakers
                                                      • General digital assistant functions are becoming more familiar
                                                        • Retailers push to integrate voice commerce
                                                          • Consumers think the technology needs time to mature
                                                            • Perceived complexity may limit adoption
                                                              • Figure 6: Consumer attitudes towards connected home products, April 2018
                                                            • Trust in listening devices
                                                              • Internet connectivity brings vulnerability to the home
                                                                • Bundling devices may be the key to increasing adoption
                                                                  • Figure 7: Consumer attitudes to connected home devices, April 2018.
                                                                • What we think
                                                                • Issues and Insights

                                                                  • Can digital assistants become ubiquitous in daily life?
                                                                    • The facts
                                                                      • The implications
                                                                        • Is the connected home suitable for the whole family?
                                                                          • The facts
                                                                            • The implications
                                                                              • The potential for voice to disrupt the grocery market
                                                                                • The facts
                                                                                  • The implications
                                                                                    • Encouraging regular purchasing
                                                                                    • The Market – What You Need to Know

                                                                                      • Digital assistants battle for a presence in the home
                                                                                        • Creating a more consistent user experience for third-party products
                                                                                          • Voice-controlled smart speakers diversify, at the top end …
                                                                                            • … and at the budget end of the market
                                                                                              • Facebook’s issue with data privacy has wide-reaching consequences
                                                                                                • The smart home presents an opportunity for insurers
                                                                                                • Market Drivers

                                                                                                  • Digital assistants battle for a presence in the home
                                                                                                    • Creating a more consistent user experience for third-party products
                                                                                                      • Voice-controlled smart speakers diversify, at the top end …
                                                                                                        • … and at the budget market
                                                                                                          • Amazon uses its position to promote its own products
                                                                                                            • Facebook’s issue with data privacy has wide-reaching consequences
                                                                                                              • GDPR could help improve trust
                                                                                                                • The smart home presents an opportunity for insurers
                                                                                                                  • Consumers are open to the idea of linking smart devices to insurance
                                                                                                                  • Companies and Brands – What You Need to Know

                                                                                                                    • Amazon Echo leads share of voice-controlled speakers
                                                                                                                      • HomePod shows initial promise
                                                                                                                        • Bixby faces a difficult fight against the momentum of established digital assistants
                                                                                                                          • Competing standards may stifle competition
                                                                                                                            • Google Home Max aims to compete on sound quality
                                                                                                                              • Smart doorbell makers Ring acquired by Amazon
                                                                                                                                • Echo Show arrives in the UK
                                                                                                                                • Market Share

                                                                                                                                  • Amazon Echo leads share of voice-controlled speakers
                                                                                                                                    • HomePod shows initial promise
                                                                                                                                      • Bixby faces a difficult fight against the momentum of established digital assistants
                                                                                                                                        • Figure 8: Brand of voice-controlled speakers in household, April 2018
                                                                                                                                      • Competing standards may stifle competition
                                                                                                                                        • Home hubs can link some devices …
                                                                                                                                          • … but continued fragmentation will limit mass-market adoption
                                                                                                                                          • Launch Activity and Innovation

                                                                                                                                            • Apple’s HomePod enters the market as a premium speaker
                                                                                                                                              • Google’s connected home focuses on its digital assistant
                                                                                                                                                • Home Max aims to compete on sound quality
                                                                                                                                                  • Home Mini promoted in doughnut truck pop-ups
                                                                                                                                                    • Google Home partners with Netflix’s Lost in Space
                                                                                                                                                      • Amazon looks to expand smart home devices
                                                                                                                                                        • Echo Plus aims to provide a complete home hub
                                                                                                                                                          • Smart doorbell makers Ring acquired by Amazon
                                                                                                                                                            • Echo Show arrives in the UK
                                                                                                                                                              • Alexa rewards children who say please
                                                                                                                                                                • Hive improves on its connected home products
                                                                                                                                                                  • LG’s SmartThinQ combines connected devices with AI-powered learning
                                                                                                                                                                  • Advertising and Marketing Activity

                                                                                                                                                                    • Amazon leads smart speaker advertising spend
                                                                                                                                                                      • ASA rules against a complaint about ads waking Alexa
                                                                                                                                                                        • Digital and search supplements high-profile TV spots
                                                                                                                                                                          • Hive and British Gas leads advertising of home automation
                                                                                                                                                                            • Amazon new sponsors of the Great British Bake Off
                                                                                                                                                                              • Figure 9: Total above-the line, online display and direct mail advertising expenditure on connected home devices, by advertiser, March 2017- February 2018
                                                                                                                                                                              • Figure 10: Total above-the line, online display and direct mail advertising expenditure on connected home devices, by device category, March 2017- February 2018
                                                                                                                                                                            • Nielsen Ad Intel coverage
                                                                                                                                                                            • The Consumer – What You Need to Know

                                                                                                                                                                              • Speakers the primary device for a connected home …
                                                                                                                                                                                • … and these devices are key for connected home expansion
                                                                                                                                                                                  • Smart thermostats boosted by partnerships with energy firms
                                                                                                                                                                                    • Consumers open to smarter home security
                                                                                                                                                                                      • Few have actually tried out connected home devices
                                                                                                                                                                                        • Playing music is the key draw for voice-controlled speakers
                                                                                                                                                                                          • Retailers push to integrate voice commerce
                                                                                                                                                                                            • Consumers think the technology needs time to mature
                                                                                                                                                                                              • Perceived complexity may limit adoption
                                                                                                                                                                                                • Trust in listening devices
                                                                                                                                                                                                • Ownership of Connected Home Devices

                                                                                                                                                                                                  • Speakers the primary device for a connected home …
                                                                                                                                                                                                    • Figure 11: Household ownership of smart Wi-Fi connected devices, April 2018
                                                                                                                                                                                                  • … and these devices are key for connected home expansion
                                                                                                                                                                                                    • Multiple ownership will continue to grow
                                                                                                                                                                                                      • Figure 12: Household ownership of smart Wi-Fi connected devices, by number of connected devices owned, April 2018
                                                                                                                                                                                                    • Smart thermostats boosted by partnerships with energy firms
                                                                                                                                                                                                    • Interest in Connected Home Devices

                                                                                                                                                                                                      • Consumers open to smarter home security
                                                                                                                                                                                                        • Figure 13: Interest in smart Wi-Fi connected devices, April 2018
                                                                                                                                                                                                      • Smart security cameras have widespread consumer appeal …
                                                                                                                                                                                                        • … but people are still resistant to the idea of connected locks
                                                                                                                                                                                                          • Voice-controlled speakers pique interest of families
                                                                                                                                                                                                            • Figure 14: Interest in buying a smart voice-controlled speaker, by parental status, April 2018
                                                                                                                                                                                                          • Long upgrade cycle of home appliances limits interest …
                                                                                                                                                                                                            • …while connected fridge/freezers lack a clear USP
                                                                                                                                                                                                            • Discovering Connected Home Devices

                                                                                                                                                                                                              • TV ads most effective for spreading connected technologies …
                                                                                                                                                                                                                • Few have actually tried out connected home devices
                                                                                                                                                                                                                    • Figure 15: Ways consumers have heard about smart home devices, April 2018
                                                                                                                                                                                                                • Digital Assistant Use

                                                                                                                                                                                                                  • Playing music is the key draw for voice-controlled speakers
                                                                                                                                                                                                                    • Figure 16: Regularity of activities performed with voice-controlled speakers, April 2018
                                                                                                                                                                                                                    • Figure 17: Functions that consumers interested in voice-controlled speakers are most likely to use, April 2018
                                                                                                                                                                                                                  • There are still problems to overcome when it comes to smart speakers
                                                                                                                                                                                                                    • General digital assistant functions
                                                                                                                                                                                                                      • Controlling connected home devices is not a priority
                                                                                                                                                                                                                        • Retailers push to integrate voice commerce
                                                                                                                                                                                                                          • Consumers interested in speakerphone use, but functionality varies by device
                                                                                                                                                                                                                          • Attitudes towards Connected Home Technology

                                                                                                                                                                                                                            • Consumers think the technology needs time to mature
                                                                                                                                                                                                                              • Figure 18: Consumer attitudes towards connected home products, April 2018
                                                                                                                                                                                                                            • Perceived complexity may limit adoption
                                                                                                                                                                                                                              • Know your audience: from Receptive Optimists to outright Rejectors
                                                                                                                                                                                                                                • Receptive Optimists
                                                                                                                                                                                                                                  • Rejectors
                                                                                                                                                                                                                                    • Cautious Optimists
                                                                                                                                                                                                                                      • Figure 19: Target groups, April 2018
                                                                                                                                                                                                                                  • Facilitators of and Barriers to Connected Technology

                                                                                                                                                                                                                                    • Trust in listening devices
                                                                                                                                                                                                                                      • Internet connectivity brings vulnerability to the home
                                                                                                                                                                                                                                        • Bundling devices may be the key to increasing adoption
                                                                                                                                                                                                                                          • Figure 20: Consumer attitudes towards connected home devices, April 2018.
                                                                                                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                                          • Abbreviations
                                                                                                                                                                                                                                            • Consumer research methodology

                                                                                                                                                                                                                                            The Connected Home - UK - May 2018

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