Home automation was woven into the fabric of society long before any of it was a reality, with countless pages of science fiction offering a glimpse into what it would and could be long before technology caught up. The concept has captured public imagination, but like anything else we can imagine, it encompasses both our greatest hopes and deepest fears.

Home automation is not just about connected devices or smart assistants. These comprise only a part of a large profit-generating puzzle estimated to reach 14.2% in 2022, with projected revenues of $115.7 billion. Home automation encompasses a multi-component system that connects various smart devices, all capable of communicating through an automated home control or independently, making decisions based on historical and real-time data – preferably with minimal user interaction. A truly integrated home can identify user patterns, accurately determine the probability of triggered events, and get all connected devices on the network to follow through with relevant steps or commands.

What’s preventing the widescale adoption of home automation solutions?
Smart Home as a service has existed since the early 2010s, but use isn’t as widespread as it may seem. In its current state, home automation is set back by spectacular levels of market fragmentation, a lack of common interoperability standards leading to subpar integration, network connectivity problems, and coordination challenges — all of which contribute to consumer confusion over which devices to purchase and at the end of the day — an underwhelming user experience. Spatial sensing and data analytics solutions that allow accurate situational awareness are still developing (our poor little Roombas often lose their way back to the charging dock). Privacy and security concerns have also loomed large and presented additional concerns for consumers looking to add to their Smart Home services.

Consumers are generally unwilling to splurge on home automation services beyond specific needs such as security, energy, and utilities. The current offerings are, at best, perceived only as a ‘nice to have’ but not a need. A minimal percentage of the population is actually ready to pay for what they view as conveniences. A European study found that 63% of respondents felt positively about the concept of a connected home, yet 71% did not own any connected devices. Therefore, unless some of the services beyond the basics can provide a direct return on investment, consumer adoption will remain a challenge.

Impact on the Smart Home ecosystem and service providers
The fragmentation of the home automation market makes it difficult to identify market size – do we define it as devices, services, or use cases? It’s hard to directly determine ROI for various Smart Home services, unlike in the industrial world where the ROI on automation and intelligence is easily measurable. Service providers also have to contend with vendor lock-ins regarding hardware, where they might be forced to use a proprietary management platform with limited capabilities.

Last-mile and device connectivity have been critical hurdles for smart solution developers to overcome. Some problems we have faced begin to be addressed with the rollout of 5G. But on the whole, most Smart Home solutions have failed to deliver users with a bouquet of services and applications capable of attending to their diverse needs. This has resulted in the entire market being unable to move away from the technology adoption curve to mass market appeal.

Charting a path to mass appeal
In a recent report, Google acknowledged the lackluster adoption of Smart Home technologies. They also highlighted the increased relevance of Smart Homes as people began to spend more time at home, in part, due to the pandemic.

In part due to people spending more time at home, the relevance of Smart Homes has never been higher. Consumers are willing to pay more for easy-to-use AI personal assistants like Google Home, Amazon’s Alexa, or Apple’s Homepod. These Intelligent Personal Assistance devices are helping to accelerate the adoption of Smart Home features. Consumers may also be willing to pay more if providers are doing their due diligence to explain how Smart Homes can contribute to net-zero living. Smart Homes should be viewed as one of the easiest gateways for everyone to experience sustainable and convenient living.

Smart Home solution providers must conceptualize a future beyond technology as a service. The business models we create now will be critical for success in mass adoption. It is quite possible that for the same use case, based on the region or model of device, it will be most effective to deploy different technologies and models. Our ultimate aim must be delivering a seamless user experience with easy configuration and, in turn, removing the need for consumers to replace or alter existing physical devices such as switches. If we want to live in the future we imagined when we were children watching The Jetsons or Iron Man, we must find solutions to smoothly integrate devices while standardizing tech and business operations. We overcome the current Smart Home challenges when we are driven by the necessity for sustainable living, net zero, and a bit of push from regulatory bodies and lawmakers.

Written by Tinku Jose

on 15 Nov 2022

Director – Technology, Quest Global Center of Excellence Leader