This is the fourth year in a row that techUK, in conjunction with GfK, has published The State of the Connected Home. The report also covers how techUK is working with industry and Government to tackle some of the challenges and makes recommendations to encourage widespread adoption. We have analysed what types of devices the consumers use to control their environment and what role the ecosystem plays.
With polling from 1000 UK consumers, the report highlights how market appeal, consumer understanding and ownership has shifted from 2016, as well as the constraints on uptake.
This report is delivered by techUK’s Connected Home Working Group, which works to actively promote and develop further growth of the connected home market in the UK. Within the report, for the first time we have included industry case studies in support of our findings from Hive, Informetis, and Samsung.
We have also included blogs and articles from our #ConnectedHome20 campaign week.
In comparison, back in 2017, the global smart home market was worth $43.4 billion. Since then, industry revenue has doubled and is expected to reach $91 billion value this year. The statistics indicate the overall market will show an annual growth rate of 15.0% by 2024.
Familiarity amongst products remains similar to our findings from 2019. The data shows two-thirds of people now own at least one smart home product: that truly is mass-market adoption. Even if we exclude people who only own smart TVs or smartwatches, we still have 47 per cent of UK consumers with smart home devices.
The strong growth of smart speakers over the last few years (7 per cent ownership in 2017, to 29 per cent in 2020) has made these the poster child of the connected home. However, when it comes using smart speakers to control other devices at home, less than half of owners are doing this. We are more likely to ask Alexa to play music, give us the news or weather, and tell us a joke than to switch on the lights or turn down the thermostat.
Despite relatively low excitement, “home/DIY” categories are also the ones where consumers express greatest interest in buying in the future. Drivers of take-up remain consistent over time, focussed on consumer confidence that devices will be easy to use and work together with other devices. However, there has been an increase in concerns around privacy – principally around smart entertainment devices. This may be driven by concerns around always-on, voice-activated devices “listening in” to conversations. techUK remains fully involved with the development of data policies and working across government on smart appliances standards, and IoT cyber security standards, such as DCMS's Secure by Design.
Smart Entertainment devices are seen to add the most value by making the lives of consumers more convenient compared to traditional alternatives. In comparison, consumers still do not recognise the same value in Smart Health products. It is likely that benefits are perceived to be more virtuous than pleasurably.
Confidence, ability to use, interoperability, and convinience are the top drivers for consumers to buy Smart Home tech.
Cost, privacy, and awareness are the key concerns brands should focus on alleviating. The increase in privacy concerns is particularly noticeable in the smart entertainment category (up to 58 per cent from 47 per cent in 2019). The past year has seen a number of debates about whether smart speakers are capturing household conversations all the time and how tech providers use ‘manual’ quality checking to improve voice recognition.
Consumers are willing to ‘pay more’ for smart products over non-smart products. However, this proportion is below 50 per cent across all categories and there is still a significant proportion (up to 29 per cent) which prefer non-smart products.
We have also identified connectivity in the home - The vast majority of smart entertainment device owners say they have connected their TVs and speakers to the home Wi-Fi, with this falling to around half for security devices and domestic appliances. The fact that Wi-Fi connection is similarly low for smart health monitoring devices probably reflects the fact that many will be paired to a smartphone via Bluetooth rather than part of the Wi-Fi network directly.
In this report we have also assessed the Smart Connected Home Ecosystem. It is crucial to identify how industries are increasigly becoming more digital and interconnected. The energy industry is intwined with providing agile time of use tariffs so consumers could use their smart devices in exactly that 'smart way'. Energy companies are providing the ecosystem for consumers to not only adopt consumer electronics, but also being able to transition to renewable energy and Electric Vehicles. 5G connectivity is also another aspect that aids that journey to digital. We have also assessed and provided further information on data ownership and privacy. With the introduction of GDPR and recent controversies in the news, data privacy is likely to become an ever-increasing issue in the connected home space.
Call to Government for Action:
- While we very much welcome the fact that smart thermostats are in scope of the Green Homes Grant, future programmes directed to buildings need to focus on the whole range of smart products that can help residents manage their energy and heat.
- The Ministry for Housing, Communities and Local Government's (MHCLG) should recognise the future benefits of connected homes in the context of net zero and develop a smart homes programme to support and stimulate its deployment.
- Government departments should continue to work closely with techUK and its members as they develop data strategies, ensuring that consumer concerns around privacy and security are front and centre.