The U.S. smart home market is steadily expanding, a new report from Markets and Markets shows.
According to the report, the market will continue growing at a compound annual growth rate of more than 35 percent from 2016 to 2020.
What does this market encompass? Research and Markets defines the smart home as the combination of three parts—home automation, internal network and intelligent control services. It also states that the smart home has three main functions: to providing remote information, perform status checks and allow control from any location.
Smart homes are typically used for monitoring and controlling environmental conditions, performing security functions and enabling intelligent lighting systems. What’s more, smart homes enable easy energy management, which will be a huge market driver over the next few years. Home appliances that have traditionally been massive energy drainers can now be easily monitored and managed. As a result, consumers can realize their sustainability goals and control costs.
Interestingly, connected technologies have proven to—in some cases—add value to homes. In one study, 81 percent of smart home device owners claimed they would be more willing to buy a home with connected technologies already installed. And 66 percent of people claim they would leave their connected technologies in place to help sell their homes.
Of course, connectivity is also a huge market driver for the smart home—and this is where your business stands to make a killing over the next few years.
Right now, for instance, many consumers—particularly those that stream large amounts of video or connect to the Web over multiple devices—are finding it difficult to stay within the confines of their monthly broadband packages. This problem will only become more challenging over the next few years, as more and more devices around the home become IP-enabled.
The ultimate vision for the smart home, after all, is to be completely connected. And this is going to utilize a massive amount of bandwidth—which could be a major boon for cable providers transitioning into broadband providers. Cord cutting could prove to be less problematic as long as customers stay on the network and continue purchasing home network services. With this in mind, there is hope that broadband can be complimentary to cable rather than a destructive force.
It’s therefore a great time to start thinking beyond video, as your business looks to prepare for the rise in consumer bandwidth. You can start by bolstering your network to offer faster connectivity, or even partnering with larger MVNOs to expand your business into new markets.
You may also want to consider experimenting with tiered broadband packages to ensure that you remain profitable yet also on good terms with your customers. Not all of your customers, after all, will be embracing the smart home, and they will expect to pay less.