Trends in Smart Home and Security at CES 2024

By Elizabeth Parks, President & CMO, Parks Associates

CES 2024 has just wrapped up, and Parks Associates team hosted its 18th annual CONNECTIONS Summit, bringing industry leaders from the connected home together to share insights and updates on the state of the smart home and security market. Parks Associates highlighted several key insights into consumer technology including that for the first time, smartphone ownership (90%) has surpassed TV ownership (88%) in households. Smartphones, along with other connected devices like wireless earbuds, tablets, and smart TVs, are now ubiquitous and essential for various daily activities, including entertainment, work, and personal communication.

In addition, Parks Associates' research shows that now 92% of US households have internet service and that connectivity is a critical part of consumer’s lives. Among all internet households, 66% own a smart TV, 42% have at least one smart home device, 31% have a security system, and 89% watch streaming video services. Despite a brief dip in consumer electronics spending early in 2023, consumer enthusiasm rebounded towards the end of the year, with purchase intentions for entertainment devices like gaming consoles, streaming media players, and VR headsets rising to levels like those during the 2021 pandemic peak.

Smart Home Adapting to Mainstream Technology Users

According to Parks Associates data, more smart home buyers now self-identify as mainstream technology users. In addition, nearly 30% of U.S. internet households now have three or more smart home devices.

This shift necessitates changes in product development, marketing, and sales strategies, as companies aim to appeal to a broader audience beyond tech-savvy individuals.? The latest research from Parks Associates reveals a stabilization in the growth of connected home device purchases yet highlights continued opportunities for expansion in services. Parks Associates Quantified Consumer study, Smart Home Buyer Journey study indicates that the "Early Majority" — a concept from Geoffrey Moore's "Crossing the Chasm" which describes a critical mass in technology adoption — now comprises 33% of smart home adopter households.

This trend is supported by data showing wider technology adoption in U.S. internet households. Jennifer Kent, VP of Research at Parks Associates, notes this as a shift towards mass-market buyers, signaling a positive development for the industry, despite a more moderate growth phase. ?

Trends at CES

One of the most apparent trends at CES 2024 was the ubiquity of smart cameras and security systems. These products are becoming more sophisticated, with enhanced features such as facial recognition and advanced motion detection. The presence of numerous Chinese brands in this space was noteworthy, reflecting the global nature of the smart home market.??

While the expansion of the security device market offers consumers more choices and drives market growth, the industry faces challenges due to ongoing supply chain issues and high interest rates, which hinder innovation by escalating costs and impacting companies' abilities to make ends meet.? Traditional security providers will continue to look to reduce costs, expand revenues through new opportunities and focus on partnerships.

Another relevant trend at CES was the advancement in smart lighting controls. These systems are becoming more intuitive and user-friendly, allowing homeowners to easily adjust their home's ambiance while also enhancing security through automated lighting schedules. Currently 13% of U.S. internet households own a smart light bulb and 6% own a smart lighting system. In 2024, there will be a significant shift with lighting emerging as a pivotal component, especially in the context of home security and energy efficiency. This trend is underscored by notable industry movements, such as NRG's $5.6 billion acquisition of Vivint and introduction of a lighting division.? ?

Beyond basic lighting, these advanced systems are being designed for diverse purposes – enhancing home aesthetics, providing fun and customizable experiences, and importantly, creating safer environments for aging in place. As this trend continues, we can expect lighting to not only contribute to a home's security and energy management but also play a vital role in shaping the living experience, merging functionality with personalization.?

Energy management and energy efficiency were a top focus at CES and continue to drive adoption of smart home solutions. Shelly Group, a leader in Europe introduced more than 10 switch and sensor products that enable advanced control, integration, and metrics. In addition, the Home Connectivity Alliance (HCA) announced a new standard to enable appliance OEMs to share energy consumption data, which can boost the use case for energy monitoring in smart homes. This could lead to more sustainable and efficient home management systems.?

Energy management systems offer dual benefits to consumers by providing real-time insights, enabling cost savings, and facilitating integration with utility providers to participate in demand-response programs that contribute to overall energy reduction. In addition, the ability to monitor and manage energy consumption through smart home systems caters to the growing environmental consciousness of consumers and offers potential cost savings. Parks Associates will address the role of smart home devices with utilities at its 15th annual Smart Energy Summit, co-located with DISTRIBUTECH, held in February 27-28, 2024, in Orlando, Florida. ?

In addition to lighting, a noteworthy focus at CES was placed on Smart bathroom technologies, including a significant presence by Kohler with smart toilets and showers, earn the spotlight. Smart toilets are changing personal healthcare by integrating biometric data collection into daily routines. These advanced fixtures are designed to analyze waste and provide valuable health insights, potentially detecting early signs of nutritional deficiencies, gastrointestinal issues, or even chronic diseases. Smart toilets have big implications for the care of elderly individuals, offering the ability to monitor health indicators.

By integrating health monitoring into the most private and routine aspects of life, smart toilets represent a leap forward in proactive health management and personalized care, offering users a powerful tool.? While it’s still early days for this area especially due to privacy concerns, cost, and lack of integration with healthcare providers, it’s clear that manufacturers are embracing the next generation of toilets.

CES highlighted several technologies for health and wellness for older demographics, but also with a focus on safety and security. ?The Samsung Digital Health House, in collaboration with AARP's AgeTech Collaborative, showcased a range of innovative solutions designed to support aging at home. The exhibit featured products from ten startup companies, each offering unique technologies aimed at enhancing the health and well-being of older adults, showcasing products in the living room, kitchen, bedroom, and bathroom areas, featuring applications in interactive gaming, health monitoring, AI-assisted wellness coaching, ambient vital sign sensing, and smart home healthcare technologies.

These products represent a broader movement in healthcare towards home-based solutions, leveraging advancements in AI, connectivity, and sensor technology. The focus is on creating seamless, integrated experiences that cater to the health and lifestyle needs of older adults, promoting independent living and proactive health management.

There was significant discussion at CES about the importance of professional support in the smart home sector. The involvement of tradespeople and professional services through companies like OliverIQ, Daisy, and Nice could be crucial in installing and maintaining more complex smart home systems. Parks Associates research shows that the average household now has 17 connected devices. Device set up and integration with other products, in addition to the device management, continues to be a challenge to solve.?

Beyond support and professional services, interoperability remains a key focus. More Smart TVs are becoming home hubs, and more industry players are bringing Matter-embedded products to market. Companies like Samsung, LG, and Hisense are integrating connected home platforms into their TVs, potentially changing the landscape of smart home integration and control. This puts the TV operating system and the largest screen in the house at the heart of the home.

As of Q3 2023, Parks Associates research shows that 66% of U.S. internet households own a smart TV, with Samsung’s Tizen OS leading at 35%. Leaders in this category, like Samsung, control hardware, software, and user data, offering a comprehensive user experience. Samsung’s role extends beyond smart TVs to the connected home and smart appliance markets, particularly through Samsung SmartThings. Smart TVs play a central role in the home ecosystem and have potential to become key interfaces for various systems like security and energy management.

The Matter Protocol and Data Sharing Challenges

Matter protocol's role in 2024 is pivotal for smart home integration and the Connectivity Standards Alliance is working to temper expectations for what is accomplished next and how quickly the standard is created and adopted across different product categories. While Matter promises greater interoperability, the reluctance of some companies to fully embrace open data sharing poses a significant hurdle. The success of Matter largely depends on finding a balance that benefits both companies and consumers. This tension could shape the evolution of interoperable smart home ecosystems in 2024.

Smart home players are tackling various challenges, from ensuring data privacy and security to managing the complexities of integrating different technologies. Innovations in 2024 will focus on creating more robust, user-friendly, and secure systems that can seamlessly integrate into the daily lives of a broad range of consumers.?

As companies navigate these trends and challenges, innovation remains key. The focus in 2024 will be on enhancing user experience, ensuring data privacy and security, and integrating AI and machine learning to provide smarter, more responsive home security solutions.

We are hosting our CONNECTIONS Conference in May in Dallas and hope you will join us. Reach out to Ashton Gambrell for Sponsorship opportunities.

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