Australian consumers are on the verge of embarking on a spending spree for internet connected home devices with Telsyte forecasting the local market spend to hit $4 billion by 2020.
The emerging technology analyst firm says early adopters will spend around $383 million on internet of things products and services this year, up from and estimated $231 million in 2015.
However, come 2018, Telsyte says a range of new products and the integration of wireless chipsets into the majority of manufacturers’ product ranges will help ramp up the market.
Leading the charge will be the smart lifestyle segment, Telsyte says. It forecasts that category, which includes whitegoods, smart gardening and other home lifestyle products, to hit $1.7 billion by 2020 – a 114% compound annual growth rate.
Smart energy, including smart sensors, power points, lighting and other components, is expected to see spend of $996 million with a CAGR of 64% between 2016 and 2020.
Spend on smart security, covering alarms, cameras – including baby and pet monitors – motion sensors, smart locks and other components such as intercoms, is forecast to hit $635 million, up 63% CAGR.
Meanwhile, all those smart offerings will also see IoT@home services and installation, including subscriptions, managed services and smart cloud services, soar with a 76% CAGR to $624 million, while the smaller market for dedicated smart hubs, used to control components of a smart home, is also forecast to see CAGR of 65%, hitting $69 million come 2020.
All up, Telsyte is forecasting IoT@home spend of $4.022 billion, with an 80% CAGR out to 2020.
The road ahead isn’t all roses, however, with Telsyte saying that cybersecurity and privacy concerns remain as barriers, along with high upfront costs.
The analyst firm says four key themes stand out in the acceptance and uptake of IoT@home technologies, including demand for intelligent features that use cloud-based machine learning to provide benefits beyond simple self-monitoring and user driven outcomes.
“For example, a camera system that automatically detects a suspicious person repeatedly walking past a home and alerts the home owner,” Telsyste says.
The company says smart appliances and IoT@home services which include cloud-based intelligent services are expected to be the fastest growing segment.
Demand for integration with existing mainstream smartphone and app ecosystems, and the need for a modular approach and gamifcation, which will encourage users to easily add modules or devices through recommendation engines and offers are also key themes, Telsyte says.
“The ability of devices to interact with each other and appear in the same app will be critical,” Telsyte says.
Rounding out the themes is voice control and recognition, which are expected to be important mechanisms for control of smart appliances and services, with Telsyte research showing one-third of early adopters have used voice commands on their smartphones – with 75% saying they had a good or adequate experience.
For telcos, Telsyte says IoT@home is expected to become ‘a new battleground’ as they seek to differentiate themselves in an increasingly price compeitive market, driven by widespread 4G adotpion and the metro rollout of nbn services.
Foad Fadaghi, Telsyte managing director, says while carriers will seek to lock consumers in to longer term contracts by dangling the IoT@home carrot, ‘they will need to be more flexible and look at trial periods, pay-as-you-go and a modular approach to be successful’.