Consumer spending on smart home services will reach $100 billion by 2020, new data from Juniper Research showed Tuesday.
The study, Smart Home Ecosystems and The Internet of Things: Strategies and Forecasts 2015-2020, revealed that entertainment services such as Netflix and Spotify are playing a key role in boosting the Smart Home market size.
However, emerging Smart Home segments, such as home automation, are expected to drive growth on the back of falling hardware costs and increased consumer awareness.
“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” said research author Steffen Sorrell. “However, tapping the developer community to innovate and address the wider market remains an issue.”
Further, the research found, that vendors such as SmartThings and Nest have successfully added subscription services to their hardware sales in order to generate ‘lifetime value’.
The research forecasts that the number of connected appliances in Smart Homes will rise to over 20 million by 2020. The market will continue to be characterised by high prices and a low value in connectivity.
Other key findings of the survey are voice control and other ‘hands free’ mechanisms will become the principle interface between users and devices in the Smart Home. Moreover, the use of wearable devices to passively supply ‘quantified self’ data to control Smart Home devices is likely to emerge as a key use case towards 2020.