Smart home market nears tipping point

by

28 January 2017
Smart homes

Ordering detergent when your washing machine runs out, delivering entertainment through mirrors – these are some examples of applications that will push the global smart home market from US$15 billion today to US$400 billion by 2030.

Within that exponential growth, the take up of smart home applications will be fastest in Asia, as a result of which the United States will lose its position as the world leader in the adoption of smart home technology. By 2030, Asia will overtake the US and Europe to account for 30 per cent of the global share of the smart home market.

These forecasts by global management consulting firm A.T. Kearney rest on the confluence of various factors. For a start, connectedness through the smart phone anywhere, any time, and more sophisticated applications due to the incorporation of big data and artificial intelligence have made home automation applications more appealing.

Smart home technology has also become increasingly ubiquitous and affordable just as greater interoperability among different products from different manufacturers are making applications more broadly useful

At the same time, smart home applications are now connected not only within the home but to wider networks which allow for greater functionality. One of the latest examples is connectedness to non-digital services such as buying detergent when the washing machine shows it to be running out.

This cutting edge use in the convenience and comfort category is just one of the applications of smart home technology. Other examples of functions that are driving growth are security management (cameras, motion sensors and smoke or gas detectors monitoring homes from a mobile phone), energy management (intelligently monitoring heating/cooling systems to reduce the bill) and media entertainment – the latest being smart mirrors for viewing entertainment.

The market in all these areas is expected to grow by more than 20 per cent annually between now and 2030.

One other area is health and wellness management, such as devices to track their users’ health status and adherence to medical treatment. Another is remote monitoring and consultation while enabling more accurate diagnosis.

These possibilities have great potential in the care of an aging population in the home and this is expected to spur adoption of smart home technology in Japan, which is supposed to have the highest proportion of elderly citizens.

The likely surge in Japan coupled with growth in China is the key to Asia’s future dominance of the market. In the case of China, adoption will be fuelled by rising income in a phenomenal number of households and the fact that homegrown tech giants such as Tencent and Baidu and manufacturers such as Xiaomi and Haier have the capability to form local smart home ecosystems and produce smart home hardware.

Singapore, together with South Korea and Taiwan, is also expected to contribute to Asia’s high penetration of smart homes, given the large proportion of high-income households and its data connectivity infrastructure.