Pandemic, Lower Prices Speed Smart Home Device Adoption, Says Parks

The COVID-19 pandemic set new expectations and behavior for the smart home, with more than a third of households having a member working from home and one in five learning from home, said Parks Associates analyst Jennifer Kent, opening the virtual Connections conference Tuesday. Household connectivity usage led to a major increase in demand for broadband coming into the house and on the reliable functioning of the home network, she said.

Familiarity with technology rose, and consumer attitudes toward technology as valuable, useful and necessary has heightened since March 2020, Kent said. Some 34% of consumers own a core smart home device, and 41% own a remotely monitored connected home device, she said. New households are getting smart home devices, and existing ones are building out their collections, she said. About 17% of new broadband households are smart home “power users,” owning at least five devices, double that of two years ago; 9% are super power users, owning 10 or more.

Kent cited service and subscription price declines over the past couple of years as “absolutely necessary to attract a more mainstream buyer.” Networked camera buyers paid an average $189 for a device in 2017, dropping to $136 last year; smart thermostats dropped from an average $177 to $111. Smart lock prices have dropped, too.

Some companies launched “value series” products to lower the barrier for smart home entry, Kent said, citing Wyze, which is “staking its brand on making affordable consumer tech” including cameras, lighting and weight scales with headphones. Abode has smart home products in a range of price points; it recently launched a $35 camera designed for indoor and outdoor use, joining a premium $260 outdoor cam.

The cost for professional security monitoring has come down, also helping to make smart home more affordable, Kent said. Canary recently lowered its monthly monitoring fee for its all-in-one security service to $9.99, matching Ring’s $10. Others at the lower end of price range are SimpliSafe at $15 and Blue by ADT at $20 per month: “All of this downward pricing pressure, of course, opens the market to new buyer segments," she said.

Telehealth benefited from the pandemic as consumers have new concerns of health and wellness, and they’re becoming more comfortable connecting virtually with healthcare professionals, said Kent. One in four U.S. broadband households is thinking about air and water quality at home differently than pre-COVID-19, she said, creating a new opportunity for device makers.

Fragmentation also slowed widespread smart home adoption, said Kent. The rebranding of Project Connected Home over IP as Matter (see 2105110064) -- a connectivity standard and certification process designed to ensure customers of interoperability among compatible products -- could help. But, she cautioned, “cross-industry alliances are difficult to maintain when players start to see an advantage of going their own way.” Matter could be different. With support from tech giants Amazon, Google, Apple and Samsung, broadband leader Comcast and IoT companies including Assa Abloy, Ikea, Resideo and Schneider Electric, “this particular alliance may have the backing” and marketing power to “achieve that ever-elusive promise of interoperability in the connected home.”