7 scenarios to watch closely in the 2015 smart home industry _ Part 1

We are coming close to the year end. SMAhome has compiled several top smart home industry news for 2014 and we are presenting them in 7 different scenarios to watch closely for in 2015.

 

Every year the International CES show unveils what is trendy in the consumer electronics world.

While we are looking forward to the 2015 edition, this years show has given a noticeable scenario, the fading of “home automation” as a buzzword. The term _ “connected home” became dominant.

 

The connected home or smart home is believed to be the next big boom for industries in the next decade. Over the next five years, the growth rate of connected-home device shipments is forecast to be much faster than that of smartphone or tablet devices with a compound annual growth rate of 67% from 2014 to 2019, according to BI Intelligence. The research institute estimates the global connected-home device sales will drive over $61 billion in revenue this year, and the number is predicted to climb to $490 billion in 2019. Connected-home devices include all smart appliances, safety and security systems (internet-connected sensors, monitors, cameras, and alarm systems), and energy equipment like smart thermostats and smart lighting. Home-energy equipment and safety and security systems, including devices like connected thermostats and smoke detectors, will become popular first, leading the way to a broader consumer adoption.

 

One key element of connected home is the cloud-based solution, which leads to the first scenario to watch in the 2015 smart home industry.

 

Cloud economy, well-facilitated by mature networking infrastructure and prevalent mobile apps, generates a new business opportunity for smart home. Makers gear up to stake a claim on this gold mine.

 

Cloud-based home management services allow users to remotely control household features, not just turning on or off the lights or thermostats. Users can remotely adjust the temperature of the home via a smartphone, tablet or computer and receive event-triggered alerts. North America is the largest smart home and cloud service market. The service providers, device suppliers and retailers in the US take advantage of well-established web technologies to generate their revenue streams.

 

China, which houses world-leading web giants like Alibaba, Baidu and Tencent, is considered to be the next influential smart home market in the world. These companies act as platform providers and at the same time release hardware devices to control smart homes in China. The open platform is a major strategy used to allure hardware vendors to bring their money into the evolving ecosystem. Meanwhile, Alibaba and Dahuatech are collaborating in the launch of LeChange, a cloud-based home automation and security platform. Aliyun _ Alibaba’s cloud computing and analytics service _ is serving as a digital backend for the assorted data storage and automation needs of the LeChange platform. Eyeing on the market value worthy of billions of dollars or even more, Tencent also released its own open platform, and is planning to work with 1,000 companies over the next three years.

 

An increasing number of consumers dont rely on installers or service providers to automate their homes. They purchase so-called DIY home security and automation products to monitor their homes from retail channels. As a device supplier, to rely solely on hardware is not smart enough. The collaboration with software partners facilitate more intelligent systems.

 

The home security camera is one of the popular smart home items on the market. Brands such as Dropcam, Piper and Canary are creating new market disruptions. The average consumer is unlikely to spend hundreds and thousands of dollars to purchase professional surveillance equipment. However, they are more willing to spend a little over a hundred dollars on a sleek camera to monitor their loved ones or to record precious moments. From our observation and market research, home security tops the smart home industry in terms of market value and need. As a result, the home network camera is a competitive battleground in terms of supply and price. Price competition is a major issue to cope with. To stay in the game, sustaining innovation becomes a way to increase profit and value. We are expecting more and more all-in-one, multifunctional cameras in the days to come, supporting alarm, sensing temperature and working as a mini wireless gateway. As DIY consumers prefer compact and easy-to-install solutions, a multipurpose sensor is an ideal solution for comfortable and secure living.

 

High penetration of both broadband and smartphone devices is the major contributor behind the rapid growth of DIY home automation products and service market. “We believe that the DIY sector is currently dominating the smart home marketplace. In terms of market distribution, we believe the DIY market constitutes 60 percent of the entire U.S. market,” said Ron Zimmer, President & CEO of Continental Automated Buildings Association (CABA). “The proliferation of broadband and wireless 3G and 4G cellular networks allow consumers to add home control functionality on an ad hoc basis,” he added.