At a glance 77% 39% 45% 42% 10% 80% 35%

Transcription

1 State of the Connected Home 2017

2 This is the inaugural annual State of the Connected Home report from techuk which identifies trends in the connected home market in the UK. The report looks at consumer understanding of the connected home, as well as the appeal and ownership of different categories of devices. It also analyses trends in the market and makes recommendations to encourage further take-up. At a glance Familiarity with connected home technologies is very strong amongst consumers and device ownership is growing. LIKELY AREAS FOR GROWTH The most appealing categories of connected home are: FAMILIARITY 77% AWARE OF THE CONNECTED HOME BUT ONLY 10% KNOW A LOT ENTERTAINMENT 45% ENERGY 42% HOME MONITORING & CONTROL 39% DEVICE OWNERSHIP 80% OWN AT LEAST ONE DEVICE 35% OWN MORE THAN THREE DEVICES BARRIER TO ENTRY Despite rising appeal and ownership of connected home technologies there are still barriers to consumer take-up. 02 The Connected Home

3 ONE-OFF COSTS VS. SUBSCRIPTION COSTS AND INSTALLATION 18% WILLING TO PURCHASE THE DEVICE SEPARATELY 37% EXPECT THE COST OF A DEVICE TO BE INCLUDED IN ANY ADDITIONAL SERVICE The vast majority of people expect to pay a oneoff price for a connected device, half want to independently maintain them and more than a third prefer no assistance with installation. 39% PREFER TO INSTALL DEVICES THEMSELVES WITHOUT THE ASSISTANCE OF THE SUPPLIER 80% EXPECT TO PAY A ONE-OFF PRICE FOR A CONNECTED DEVICE (NO CONTRACT) 49% WANT TO SELF-SERVICE THEIR DEVICES COST 39% BELIEVE THAT CONNECTED HOME PRODUCTS ARE CURRENTLY TOO EXPENSIVE PRIVACY 22% CONCERNED ABOUT PERSONAL PRIVACY INTEROPERABILITY 16% CONCERNED ABOUT DEVICES COMMUNICATING ACROSS DIFFERENT SYSTEMS SECURITY 15% CONCERNED ABOUT SECURITY IN THEIR HOMES For this report, references to connected (home) devices or technologies refers to any devices (and associated services) which are either directly or indirectly connected to the internet. Data in this report draws on a consumer survey of UK adults 16+ conducted by GfK on behalf of techuk. The data is weighted to nationally representative profiles participants = 1031; 2017 participants = 1002 The Connected Home 03

4 What is the connected home? By the end of 2017 nearly two thirds 5.2bn - of Internet of Things (IoT) applications are predicted to be consumer facing in a market estimated to be worth $725bn. A significant proportion of these applications will enter people s lives through their home. The connected home is where multiple devices and services across a variety of sectors are integrated to offer greater convenience and peace of mind in the domestic environment. The connected home cannot be just about kitting homes out with fancy gadgetry to do things we already do, just with more ease. These connected devices and services need to empower people and give them more control over their lifestyles. ENTERTAINMENT Smart interactive speakers Smart TV Smart plug HOME MONITORING & CONTROL Smart alarm systems Motion sensors Security cameras Smart locks 04 The Connected Home

5 A great example can be found in health and social care, where a combination of devices can monitor wellbeing; giving prompts and providing updates. This allows individuals to have more confidence, and feel more engaged, with their own treatment. There has been a significant increase in device ownership with 80% now owning at least one device across the core connected home categories below. These technologies and services are reaching the mass market, but progress is steady rather than explosive. More needs to be done to convince consumers of the relevance and benefits. Getting the communication right for different consumer segments will be crucial. For example, people who plan to buy a connected device would benefit from learning about the convenience that such devices can bring to their lives, whereas people who already own at least one device would benefit from learning more about how multiple connected devices can work together. No matter where you are, the connected home allows you to know what is happening in and around your home, meaning you are in control of events that would otherwise be left to chance. Being able to check the children are back safely from school, and have a conversation with them or configure a light to automatically switch on as they enter the house can provide peace of mind. A few low-cost water sensors can allow home owners to get an alert when a leak is detected, automatically turning off the water supply and minimising damage this is particularly appealing if combined with lower insurance premiums. ENERGY Smart thermostats Energy manager Smart thermostatic radiator valve Smart lighting Smart meters APPLIANCES Robot vacuum cleaners Smart washing machines Smart fridge Smart air conditioner HEALTH Blood pressure monitors Baby monitors Fitness trackers Fall detectors The Connected Home 05

6 Consumers appetite for gadgets that make home life easier is on the rise, but they do not fully understand the benefits connected technologies can deliver. Awareness of connected home technology is in the top three of technology trends surveyed alongside mobile payments and the cloud - with 77% have some knowledge, but only 10% of people know a lot about it. This is relatively low when compared to mobile payments where in-depth knowledge is twice as high. 19% YEAR OLDS HAVE AN IN DEPTH OF KNOWLEDGE ABOUT THE CONNECTED HOME 11% YEAR OLDS HAVE AN IN DEPTH OF KNOWLEDGE ABOUT THE CONNECTED HOME 06 The Connected Home

7 What do customers understand about the connected home? New devices and services are generating more marketing discussions about the connected home, leading to an 11% increase in consumer awareness. Advertisements for smart thermostats and voice control hubs enjoy prime time slots and stores like Currys PC World have created dedicated departments to allow consumers to experience the technology. To invigorate the market and increase device ownership, more needs to be done to educate consumers about the relevance and benefits of the connected home. Knowledge of the connected home increases with device ownership. As consumers experience the benefits of the technology, their in-depth understanding of the potential of the connected home more than doubles. This is still, however, a market driven by early adopters. Companies and retailers must educate the market. Some are already showcasing the possibilities and consumer benefits of the connected home. British Gas and its Smart Street Series captures the daily lives of real families living with a range of technologies, capturing the families honest reactions and demonstrating how tech can really make life smarter, easier and more fun. KNOWLEDGE OF TECHNOLOGY TRENDS MOBILE PAYMENTS HOME TECHNOLOGY 66% 76% 77% CLOUD COMPUTING & STORAGE 3D PRINTING 57% 67% 67% 65% 71% 72% 82% DRIVERLESS CARS/AUTONOMOUS VIRTUAL & AUGMENTED REALITY 38% 52% The Connected Home 07

8 How appealing is the connected home? The vision of the connected home is now coming together. Overall appeal is growing with 39% of people agreeing that connected technologies offer an attractive proposition - an increase of 10% from One in three consumers are still, however, on the fence, even in areas of high interest like entertainment and energy, where appeal sits above 40%. As the technology improves, if concerns around security and privacy are properly addressed and prices stabilise, the main barrier to the connected home will be indifference. A big part of bridging the gap between appeal and ownership will be creating a greater understanding of the value of not just the future home ecosystem but its individual components. Despite increasing interest, ownership doesn t seem likely to change dramatically in the next 12 months, although this is dependent on how much the Christmas period drives uptake. It is unlikely to follow a smooth trajectory, coming in stages as different categories take off. By 2021 it is estimated that the connected home will be made up of an average 8.7 devices. Demand will be driven by the increasing number of devices on the market offering people novel ways to better manage their lives. APPEAL OF CONNECTED HOME DEVICES ENTERTAINMENT ENERGY HOME MONITORING AND CONTROL Extremely appealing Very appealing Fairly appealing Not very appealing Not appealing 18% 27% 34% 15% 6% 14% 28% 34% 16% 7% 16% 22% 34% 19% 8% APPEAL OF CONNECTED HOME DEVICES BASED ON EXISTING OWNERSHIP Less than 3 devices 64% 56% 52% No devices 24% 29% 27% 08 The Connected Home

9 WE CAN MONITOR AND CONTROL OUR MAJOR APPLIANCES AND OTHER DEVICES AND ADJUST OUR ENERGY USAGE TO SAVE MONEY. BEFOREHAND WE DIDN T EVEN KNOW WHAT ACTIVITIES WERE DRIVING UP OUR BILL! HEALTH 12% 24% 38% 19% 8% APPLIANCES 11% 22% 34% 23% 11% 52% 24% 46% 22% The Connected Home 09

10 LONGTAIL OF CONNECTED HOME DEVICE OWNERSHIP* TV ENERGY METER 8 21 SET TOP BOX SMOKE ALARM & AIR QUALITY SENSOR FITNESS & ACTIVITY MONITOR BLOOD PRESSURE MONITOR PERSONAL SCALES 9 16 DETECTORS 5 15 ALARM SYSTEM 5 12 HOME PLUGS THERMOSTAT ENERGY INTERACTIVE SPEAKERS 0 7 ENTERTAINMENT MOTION SENSORS 4 7 HOME MONITORING AND CONTROL ENERGY MANAGER 4 6 HEALTH LIGHTING 3 6 APPLIANCES IP SECURITY CAMERA STREAMING MULTI ROOM AUDIO * This is a non-exhaustive list and more technologies were included as part of this survey. See for full survey results. LIGHT CONTROL 3 5 BOILER MONITOR CONTROL RADIATOR WASHING MACHINE ACCESS CONTROL (DIGITAL KEYS) REFRIGERATOR The Connected Home

11 Device ownership 80% of people report owning at least one device and a third owning more than three. Despite this proliferation of devices, we re still far from the vision of seamlessly connected homes. Smart TVs still dominate in ownership terms (39%) but with interest growing around home efficiency and security the next phase of growth is likely to be in the areas of smart energy and home monitoring and control. ENERGY Smart thermostat ownership has moved from 5% to 8% since 2016; with 32% of people interested in buying one in the near future. With nearly seven million smart meters installed across Britain, energy is clearly rising up the home agenda. 36% of people are interested in investing in energy management technology that can provide insight into the energy consumption of the home. Research by Smart Energy GB has shown that over half (56%) of people with a smart meter have changed the way they do things around the home, including purchasing smart energy technologies such as smart lighting and smart heating controls (thermostats, radiator controls) as well as new domestic appliances. The benefits of smart thermostats are clear and with the cost gap closing, demand is likely to increase. 21 Only 13% say that they definitely will not buy a smart energy device. The Connected Home 11

12 HOME MONITORING AND CONTROL Appeal for home monitoring and control technologies is now at 39% and average ownership of devices such as smart alarm systems, motion sensors, and security cameras, sits at 8%, up 4% since To date, home monitoring and control systems in the UK have not enjoyed the same popularity as in countries like the USA. Historically this has been due to cost, complexity and relative lack of additional benefits through insurance discounts. However, the range of devices now means the connected home is also opening up new markets. APPLIANCES Ownership of smart domestic appliances, such as fridges and washing machines, remains low at only 3%. There is interest in the new functionalities smart appliances can offer - 30% of consumers are interested in purchasing an appliance in the near future but nearly half (48%) of consumers view devices as too expensive. This is a barrier that has to be removed over time as companies move to connected by default. We are already seeing this with smart TVs; and with companies like Samsung committed to making all of their appliances IoT-enabled by 2020, The challenge therefore is to build the market outside of replacement cycles, which currently average at over a decade. The UK Government has identified a significant potential for smart appliances to play a role in future energy system through the enabling of domestic demand response markets. Whilst there is clearly an opportunity here, as evidenced by various programmes throughout the USA, the UK market still faces a number of issues in incentivising consumer uptake. HEALTH Smart health is driven through wearables. Fitness and activity trackers dominate the market (18%) with companies such as Fitbit and Garmin bringing not just activity trackers but heart rate monitors into the mainstream. Fitness and activity tracker ownership has increased 150% since 2016, opening the door to wider health and wellbeing products that are not just for the recreational user, but more broadly for those who are monitoring illnesses such as diabetes or dementia. In terms of broad category appeal, there is increasing interest (36%), however there is a disconnect when looking at how much consumers understand about the applications and what benefits they can bring to their lives. One in six (16%) surveyed said that a barrier to purchase was that they did not know enough about the category, whilst 12% believed that the technology would not meet their needs or expectations. ENTERTAINMENT A new entrant, smart interactive speakers have seen significant growth, with 7% of people already owning a device and 27% interested in buying one in the near future. By using voice control as a user interface, such devices allow consumers to play music and control other connected devices, bridging the interoperability gap between different ecosystems. These AI assistants should also deliver increasingly better services, continually learning and improving as the technology matures. More than a third of homes in the UK have three or more connected devices TOTAL NUMBER OF DEVICES OWNED PER CATEGORY IN 2017 ENTERTAINMENT 14% ENERGY 8% 12 The Connected Home

13 TOTAL NUMBER OF DEVICES OWNED NO DEVICES 20% 23% 27% 6% 2-3 DEVICES 21 1 DEVICE >3 DEVICES 18% 12% 35% 5% HOME MONITORING 8% HEALTH 11% APPLIANCES 4% The Connected Home 13

14 Barriers to purchase Some barriers prevent consumers from purchasing connected home devices. TOP BARRIERS TO PURCHASE 2017 COST PRIVACY INTEROPERABILITY 2016 COST LACK OF KNOWLEDGE PRIVACY 16% 22% 25% 22% 39% 36% Whilst overall knowledge and awareness is on the up, the perceived cost of devices is still the biggest barrier. 39% agreed that devices across all categories are too expensive. This may indicate that understanding of the benefits is still relatively weak. Consumers may be aware of smart thermostats and some of their functionality but not the true impact of them in lowering their bills. There is also a concern around interoperability with 16% of people apprehensive about the ability of technology to communicate across different systems. Consumers purchase connected home technologies to meet a specific need at a point in time peace of mind, comfort, energy efficiency the adoption of the connected home will therefore be modular. This introduces both technical and communication challenges for industry around what devices operate in which ecosystem. The rise of a home hub and services such as If This Then That go some of the way to solving this, although we are still some way from Plug and Play levels of ease. Concerns about privacy and security are a constant in today s digital society. A number of high profile hacks have identified weaknesses in the security protocols of connected home devices. Industry has already taken steps to reduce this. First, to ensure that it embraces privacy and security by design, and takes a proactive stance to reducing attack surfaces and vulnerabilities, working to the highest and not the lowest common denominator. And secondly, to ensure that it not only deals with issues of privacy and security, but also listens to consumer concerns, and educates the market, demonstrating transparency and integrity. The Connected Home sector needs to earn the right to derive value from data. 36% under 45s see cost as a barrier compared to 43% of over 45s BARRIERS TO PURCHASE LACK OF KNOWLEDGE 11% INFRASTRUCTURE 13% SCEPTICAL ABOUT TECHNOLOGY 14% CONCERNS ABOUT HACKING AND SECURITY 15% CONCERNS ABOUT TECH COMMUNICATING ACROSS DIFFERENT SYSTEMS 16% PERSONAL PRIVACY 22% TOO EXPENSIVE 39%

15 Installing and paying for the connected home How consumers expect to install and pay for devices and services will be important to how the connected home market develops. With the maximum benefit being derived from the creation of an ecosystem of services, enabled by the integration of multiple connected devices, it is expected that subscription and bundled models will become increasingly prevalent. Ease of installation and maintenance will be key. Where consumers do need extra help setting up devices, it will be important that services are easy to access and provide all the information needed. Installation and troubleshooting services through third parties such as Team Knowhow, will help bring connected home benefits to everyone and not just the tech savvy. ONE-OFF COST VS SUBSCRIPTION MODELS Opinions on upfront versus subscription costs are mixed. The majority of those surveyed expect to pay a one-off fee and only 18% are willingly to pay additional recurring costs. Breaking it down, monthly fees are more likely to be expected for home security and health and social care products in comparison to other categories. However, as more services become available, we may see greater uptake of subscriptionbased over-the-top services due to the more holistic customer experience they offer. INSTALLING AND MAINTAINING DEVICES 39% of those surveyed commented that they would prefer no assistance with installation. 49% agreed that they would want to independently maintain the devices in their home. Ease of installation is therefore likely to be a key differentiator for products in the market. This can be seen with home security systems where the once arduous and costly task of wiring-in cameras and sensors has been replaced by wireless systems. 80% expect to pay a one-off fee Under 45s are 10% more likely to accept recurring fees than over 45s The Connected Home 15

16 techuk represents the companies and technologies that are defining today the world that we will live in tomorrow. 950 companies are members of techuk. Collectively they employ more than 700,000 people, about half of all tech sector jobs in the UK. These companies range from leading FTSE 100 companies to new innovative start-ups. The majority of our members are small and medium sized businesses. #techuk Our world is changing fast. Consumers, users, and buyers are calling the shots. New things become possible every second. And more complicated, too. Our clients are businesses around the globe. To make the best possible decisions every day, they need to really know what is going on, now and in the future. We don t have a crystal ball, either. But we love data and science and we understand how to connect the two. We care about attention to detail and accuracy. We are digital engineers who build world-class research, powered by high technology. Because people who know best lead the way. This is why GfK means Growth from Knowledge.