Consumer spending on smart homes and their associated products is set to skyrocket and reach $100bn (£65bn) within the next five years, a new report has claimed.
A report from analyst house Juniper Research has estimated that consumer will begin spending more on smart home products as the cost of hardware falls and more people become aware of the benefits the technology can bring.
This growth will push the number of connected appliances in smart homes will rise to over 20 million by 2020, the report says.
However in difference to many other industry sectors, consumers will most likely enter the smart home sector gradually, by purchasing products that incrementally make their home more intelligent over time.
The challenge now is for vendors to hook in customers, with the report highlighting the likes of SmartThings and Nest, which have successfully added subscription services to their hardware sales in order to generate ‘lifetime value’.
“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” noted research author Steffen Sorrell.
“However, tapping the developer community to innovate and address the wider market remains an issue.”
Vendors may still have somewhat of a challenge in getting consumer on board with smart homes, though, as other recent research has revealed many Britons in particular remain unaware of the technology.
A study by analyst firm Context last month found that nearly two thirds (62 percent) of UK consumers haven’t heard of the term ‘Smart Home’.
However of those that had, UK consumers were found to be willing to spend more than their European counterparts, with 11 percent prepared to spend up to £1,000 and seven percent willing to invest over £1,000 in new technology.
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