Smart Home Device Growth Has 18.35% CAGR from 2014-2022

This is an excerpt from Parks Associates library of research. Our data is proprietary and built over almost four decades of time. If you have a product or service in the connected home or IoT markets, our team would love to learn more. Email [email protected] to brief with our team.

As a category, smart home devices have enjoyed solid growth since 2014 with a CAGR of 18.35% from Q4 2014 to Q4 2022.? By individual devices, the story is less positive and less robust.? Smart thermostats, for instance, have been available since 2008, but have just now achieved 17% adoption in US internet households. That shows that device has reached the magic 15% indicating mass market potential.

It has taken more than a decade and is now driven by consumer awareness that utility rates are rising rapidly.? In addition, the new smart thermostats have more capabilities to accompany their prices which are often lower than in past years.

But, video devices lead the smart home category now.? Smart cameras and video doorbells are popular, showing an increase in adoption and high intentions for the next year.? Smart video doorbells offer two important benefits: security and convenience.? The resident can see who is at the door before opening that door and even pretend to be home with the user engaging in a live, but remote, conversation through the intercom. With storage, the homeowner can review who has been at the door while they are away.

Cameras are straight up security. Both devices are often bundled with the acquisition of a security system, pro-installed or DIY.? Cumulative purchases over time exceed current adoption rates due to replacement/upgrade purchases, purchases of additional devices to the same household, and product returns.

Bundling these security devices with other useful devices will increase the attractiveness of all devices.? Smart doorbells and thermostats are two worthy bundling partners. We see these two devices leading bundled offerings from traditional DIY and pro security players. ?

Video doorbells are a hit with owners; the best predictor of a strong future market.? Smart cameras are valuable but with lower resonance.

Video doorbells are also a huge hit with homeowners.? Nearly 80% of owners declare themselves highly familiar with their product and 70% declare the device to have high personal benefit. Contrast those ratings with the ratings for smart cameras.?

Intenders for both video doorbells and networked products provide ratings of benefit that are lower than owner rated benefits, but video doorbells offer a higher differential.? This is good news for that device.? When intenders’ perceived benefits are nearly the same as owners, the ratio is off.? Manufacturers need to make category improvements.? When Intender perceived benefits EXCEED owners perceived benefits, the category is at risk of decline.

Smart cameras manufacturers must learn why their perceived benefit is low among owners and address those causes. These devices play an important role in calculating and forecasting future, monthly recurring revenues.

Parks Associates developed the Theory of Relevancy over a decade ago and tracks familiarity, value and affordability across all categories of connected products. These are important metrics to consider when looking at individual product categories, the consumer buyer journey, and the forecast of growth for the connected home market.

This is an excerpt from Parks Associates library of research. Our data is proprietary and built over almost four decades of time. If you have a product or service in the connected home or IoT markets, our team would love to brief with you.

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