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Multi-Billion Market Ahead for Smart Homes

February 24, 2016

There's something so gleefully futuristic about a smart home; the idea of a house that allows lights to be turned on indoors from a user's car, or allows the user to watch what's going on inside when not home, even to be able to answer that nagging question about whether or not the stove was left on just feels like “the future.” If projections from ON World prove accurate, that future will be in a lot more hands, and make a market worth almost $28 billion by 2020.

A survey from January 2016 found that there was a substantial market currently for smart home materials and services; at least half of the study involving 1,000 adults were prepared to spend at least $60 a year just on the services. Those planning to make a purchase were planning to turn to major online sources, like Amazon and the Apple Store, as well as home-retail giants like Home Depot and Lowe's.

Those shoppers will have more to choose from as well; smart home hubs were up 110 percent last year, and individual products were up 150 percent. These gains, along with a market increasingly attracted to such products, is therefore projected to hit not only that $27.5 billion revenue point, but by 2020, there will be an expected 75 million smart home systems installed around the world. Reports suggest millennials are looking for better safety and security systems, while baby boomers want elder care systems and home energy management tools.

One of the biggest problems cited, though, is the difficulty involved in getting smart home apps to integrate effectively. Only one in five will currently do so, says the study, and that means a great opportunity for app makers to bring out a real “killer app” to the market.

A few years ago, when smart homes were getting started, it wasn't hard to find out about users who were using multiple devices to keep everything operational; one user was running both an iPhone and an iPad to control all the smart home options he had in place. That's a problem for users, and one that should be coming to a close a few years later. Getting devices to play nicely together is easily one of the biggest problems with smart home systems today, and getting past that will make some companies very successful in the field. The market is quite clearly there; getting products out that the market will find valuable is still lagging a bit.

As smart home systems improve, grateful, interested users will likely descend on these systems and take full advantage. From turning on the lights when arriving home to turning off the stove accidentally left on, there's no shortage of smart home applications. The best of these, however, will be the clear winners. 

Edited by Stefania Viscusi

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