While the COVID-19 pandemic has been devastating for many industries and has likely forced the closure of other businesses for good, the same cannot be said of the home security market. With people spending more time in their homes consumers naturally began taking a greater interest in the amenities of their residences. This has subsequently resulted in increased adoption of security systems and devices across the board.
However, with a greater number of Americans becoming vaccinated and venturing back into schools, offices, and other public settings, the question now becomes how will the industry maintain this growth and what solutions in the offing stand poised to keep consumers interested in the technology? This was one of the focuses of Parks Associates’ annual CONNECTIONS conference, which was held virtually earlier this week.
The Smart Home Tech Landscape
According to Parks Associates’ latest research, the number of U.S. consumers that now own at least one smart home device has doubled (17% in Q4 2015 to 34% in Q4 2020) over the last five years. The number of “Power Users,” which the market research firm defines as those that own between five and nine such devices, has also grown significantly, doubling in just the last two years.
In a keynote presentation highlighting some of the key drivers for the smart home market, Jennifer Kent, Vice President of Research at Parks Associates, noted that more than a third (36%) of U.S. households have had at least one family member working from home during the pandemic while one in five had a family member attending school virtually. This subsequently drove demand for broadband internet service as well as increased familiarization with and investment in technology in the home.
“While many households tightened their wallets, spending on technology rose as did spending on improvements so consumers’ spaces could support them and work for them in new ways,” Kent explains. “Ultimately, industry players need to understand how consumer needs have changed and modify or invent solutions that meet them.”
Kent drew a correlation between the uptick in adoption with falling tech and service prices. For example, network camera buyers paid an average of $189 per device in 2017, compared with $136 in 2020. Prices of smart thermostats have also fallen considerably, dropping from an average of $177 to $111 over the same timeframe.
Changing Market Dynamics
Anne Ferguson, VP of Marketing at Alarm.com, said the industry is in a strong position heading into the rest of 2021 given how the pandemic fueled a convergence of security and smart home tech that had been happening organically prior to the start of lockdowns.
“What has happened is that as people were in their homes, we really started to see people thinking differently about security,” Ferguson explains. “It transitioned from just being about perimeter protection, which is what it had been for such a long time, to people thinking about security in a much more holistic way. Security became, for example, who is coming in my door? Maybe it is a welcomed person coming in my front door, but I want to see that person, I want to be able to control that front door experience because a lot of us, for a long time, didn’t want people – even friends – coming in our front door. Similarly, we saw a real increase in the use of indoor video as well. We’ve also seen cases where smart home technology has allowed individuals to stay connected with, in particular, elderly members of their family who might not have been residing with them.”
Michele Turner, Senior Director of Product Management for the Smart Home Ecosystem at Google Nest, part of the Google/Thread Group, says security is really “foundational” when it comes to investing in smart home tech for most consumers, but that rather than purchase a whole-home security system with monthly monitoring, many people are starting small with perhaps do-it-yourself solutions and adding on from there.
“We’re seeing users start their smart home journey with just a smart camera, doorbell or door lock and then they just extend further into the smart home from there,” Turner says. “What’s really interesting about this area is we are meeting users where they are at. If they want to get started with just something basic they can do that for under $100 today or if they have just had a major life event – whether you just had a baby, your aging parents need to get a little more protection at their homes and you want to keep an eye on them and make sure their home is secured, or perhaps you have just had a break in – some of those major life events are when people step up their security.”
Daniel Cooley, Chief Technology Officer for Silicon Labs, maker of SoCs (System-on-Chip) for smart home devices, said that the pandemic accelerated nearly every electronic trend that existed by multiple years, driving huge demand for Internet of Things (IoT) products and services, but he believes the biggest trend impacted by the spread of the coronavirus is health in the home.
“We’ve had a very baseline health technology in the home for a long time with connected weight scales or maybe a sleep monitor or CPAP machine but these devices that are out there started to grow in volume, number one, and we’re starting to see much more reliance from medical infrastructure to try to get folks out of clinical settings as much as possible,” Cooley says. “That, I think, will be particularly pronounced once the pandemic is over.”
Improving Interoperability and Portability
One of the biggest obstacles for the smart home market historically has been interoperability challenges and a fragmentation of standards. However, industry executives say the recent announcement by the Connectivity Standards Alliance (formerly the ZigBee Alliance) and its new “Matter” standard (formerly Project Connected Home over IP or CHIP, for short) could be a game-changer for the market.
“Interoperability is one of the gating items to IoT’s growth right now. Frankly, it is one of the hardest problems to solve,” Cooley says. “At the highest level, the CSA was created out of a recognition that no one standard is winning in the IoT. We need a way for higher levels of interoperability to come together in the cloud, in the gateway, and security models that are consistent across them. If you are switching your smart home platform maybe from a Google to an Apple platform, you don’t want to have to buy new door locks for your house or a new thermostat. That would be a non-starter.”
Turner echoed this sentiment when it comes to the portability of smart home tech and moving it from one residence to the other as well.
“We, as an industry, need to start addressing that because it has been challenging,” she adds. “I actually just went through this in the middle of last year and it was one of the things I dreaded most – trying to get all of those devices up and running and getting everything factory reset. That’s an area where device makers need to do better.”
Perhaps a bigger issue, according to Turner, is platform portability, which the Matter standard should help with.
“Let’s say you’ve had Alexa devices in your home, and somebody gives you a Google Home hub and you say, ‘wow, I like this for various reasons, but I would like my lights to work with this.’ Before it wasn’t easy to get everything working consistently in your home. With Matter, because we’re making this portable across the ecosystems, it is going to be very simple to be able to switch between systems,” she says.
About the Author:
Joel Griffin is the Editor of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
