New data from Juniper Research has found that consumer spend on Smart Home services (including entertainment, health, energy and home automation) will reach $100 billion by 2020, well over twice the estimated spend for this year — $43 billion.
Entertainment services such as Netflix and Spotify are playing a key role in boosting the Smart Home market size, driven by a universal appeal, and the low cost of services. However, emerging Smart Home segments, such as home automation, are expected to begin catching up, driven by falling hardware costs and increased consumer awareness.
The new research found that numerous home automation subscription services, such as AT&T’s Digital Life, have struggled to address the mass-market. Incremental unit-by-unit purchases, to personalise the home, are therefore the most likely entry point for the consumer.
“Enabling services to generate recurring revenue on top of Smart Home hardware will be crucial for realising the projected long-term success of this market” notes research author Steffen Sorrell. “However, tapping the developer community to innovate and address the wider market remains an issue.”