Smart home market: more changes coming

Thursday April 14, 2016
Millions of smart home devices are shipped annually in North America, but the smart home market is highly fragmented and confusing for end-users concerned about brand longevity, customer care and reliability.

Blake Kozak, principal analyst at market analytics firm IHS Technology, says the smart home market will continue its evolution toward machine-to-machine (M2M) communication ecosystems. A recent analysis by IHS Technology looked at 410 companies actively providing smart home services, devices and platforms. IHS found that 228 supported more than one protocol.

Wi-Fi was the most popular protocol, representing 34 per cent of the protocols supported by all 410 companies; Z-Wave followed with 18 per cent.

“Despite this fragmentation, security companies have not been displaced, says Kozak. “Many are now offering self-contained panels offering open functionality, as well as peripheral devices that can be managed locally via voice control or as part of a larger ecosystem.”

However, Kozak believes security companies will be challenged in 2017, when UL-compliant Z-wave sensors hit the market. UL has approved the latest Z-Wave protocol for UL 1023 compliance, which means Z-Wave detectors can soon be used for professional alarm installations, he explains. “In order to remain competitive in 2016 and 2017, dealers and service providers need to consider flexible billing models as well as DIY installation with professional monitoring.”

Kozak also notes that smart televisions, set-top boxes, routers and audio-based smart-home devices (e.g., Amazon Echo and Sonos) may soon challenge traditional hubs and panels, disrupting the way end-users interact with their smart home environments.

According to IHS Technology, in 2015, approximately 16 million smart security devices – both do-it-yourself (DIY) and professional – shipped in the American market. Beyond security, 15.5 million smart appliances, thermostats, light bulbs and plugs shipped in 2015.

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