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Competing standards and high prices challenge smart home growth

Competing standards and high prices challenge smart home growth
There's no doubt smart homes are growing in popularity. However, adoption has been slow due to competing standards causing confusion among users. 

Smart home standards come in many forms — those focused specifically on the smart home market like Zigbee and Z-Wave, and those used across all markets like Wi-Fi and Bluetooth. There are advantages and drawbacks to using each of these standards, but with so many to choose from consumers aren't always sure which way to go.

This has become a challenge for adoption and growth in the smart home market, as these choices leave smart home consumers confused and unsure of what to buy. "They go into a store and see a whole bunch of different brands and products, and they don’t know what works together," said John E Osborne II, VP of LEEDARSON North Amercia.

John E Osborne II,
VP of LEEDARSON North Amercia
There can be arguments made for why any one of these smart home standards is the best. Some may champion the standard with the largest number of certified devices. Zigbee's website lists just over 2,000 certified Zigbee products, while Z-Wave states there are over 2,400 interoperable products available around the world. Others may decide to go for the one attached to their hub of choice. Amazon's Echo Plus for instance, now has Zigbee built-in. Other factors to consider include the frequency on which the standard operates, as well as power consumption and range.

A lack of user education means that consumers are not always sure about how the different standards work; how they are different; and which standards best fit their needs. While ideally the market will work toward universally interoperable standards, consensus on what these might look like is a ways off. Even if smart home companies agree that a universal standard would be useful, deciding what that standard should be would still be an uphill battle.

Other barriers to smart home market growth include: the cost of devices, low consumer awareness, a lack of consumer interest, unawareness of benefits, long replacement cycles, mistrust of technology, cybersecurity concerns, data privacy concerns and a lack of trust in energy providers, according to a report from the International Energy Agency, “4E Electronic Devices and Networks Annex.”

Smart home devices are still pretty pricey, further limiting adoption. Unlike other types of consumer electronics, truly building a smart home requires more than just picking up a smart hub and a smart light bulb. It’s an investment, and one that most cannot afford or do not see the value in. The smart home market is still young, though. As the market matures and technology develops, the price of devices is likely to drop, making them more accessible.

Future growth in the smart home market may also be positively impacted by insurance in the U.S., much like security was, according to Mitchell Klein, Executive Director of the Z-Wave Alliance. At the moment insurance companies are not offering discounts to homeowners using sensors for water, smoke, etc. However, Klein feels “pretty confident we will see a lot of growth on the insurance side” when they do.

*For more smart home trends of 2019, please visit Tech Experts Reveal 2019 Smart Home Technologies.

Product Adopted:
Wireless Transmission

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