The smart home market has stagnated

BII

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Smart home device ownership in the UK is stagnating, according to a recent survey from Deloitte.

The survey, which looked into smart home device ownership levels and interest, shows almost no growth between 2015 and 2016, even in the most popular smart home device categories.

• 10% of UK consumers own a wireless speaker system, making it the most widely owned smart home device of those included in the survey. That's up from 9% in 2015. Ownership of other devices, including thermostats, surveillance systems, and lighting, all came in under 3%, showing almost no growth from the previous year.
• Wireless speakers are also the devices UK consumers said they're most likely to buy in the next 12 months. 7% of UK consumers said they would buy wireless speakers by May 2017.
• Fitness trackers have grown most in terms of UK ownership between 2015 and 2016. Approximately 9% of UK consumers own a fitness tracker, up from 5% in 2015. 
• 48% of respondents said they think smart home devices are too expensive.
• 26% said they think the technology needs to evolve further before they buy a smart device.
• Older consumers are more worried about long device replacement cycles than price. Respondents aged 55 to 64 are most likely to buy connected devices when their current devices need to be replaced, but 53% of the younger respondents — those aged 18-34 — said price is a barrier to purchasing connected devices.

Unsurprisingly, younger generations find more value in smart home devices. UK consumers under 34 indicated they are more likely than older generations to purchase connected devices that would make their lives easier.

BI Intelligence, Business Insider's premium research service, has previously identified that smart home adoption growth will remain stagnant for the foreseeable future. Long device replacement cycles, high prices, perceived limited value by consumers, and technological fragmentation has held back adoption of smart home devices. Despite a trend toward the unification of the smart home ecosystem, highlighted by Apple’s recent revamp of HomeKit, this survey indicates that adoption of core smart home technologies will remain low over the next year.

John Greenough, senior research analyst for BI Intelligence, has compiled a detailed report on the U.S. smart home market that analyzes current consumer demand for the smart home and barriers to widespread adoption. It also analyzes and determines areas of growth and ways to overcome barriers.

Here are some key takeaways from the report:

• Smart home devices are becoming more prevalent throughout the US. We define a smart home device as any stand-alone object found in the home that is connected to the internet, can be either monitored or controlled from a remote location, and has a noncomputing primary function. Multiple smart home devices within a single home form the basis of a smart home ecosystem.
• Currently, the US smart home market as a whole is in the "chasm" of the tech adoption curve. The chasm is the crucial stage between the early-adopter phase and the mass-market phase, in which manufacturers need to prove a need for their devices.
• High prices, coupled with limited consumer demand and long device replacement cycles, are three of the four top barriers preventing the smart home market from moving from the early-adopter stage to the mass-market stage. For example, mass-market consumers will likely wait until their device is broken to replace it. Then they will compare a nonconnected and connected product to see if the benefits make up for the price differential.
• The largest barrier is technological fragmentation within the connected home ecosystem. Currently, there are many networks, standards, and devices being used to connect the smart home, creating interoperability problems and making it confusing for the consumer to set up and control multiple devices. Until interoperability is solved, consumers will have difficulty choosing smart home devices and systems.
• "Closed ecosystems" are the short-term solution to technological fragmentation. Closed ecosystems are composed of devices that are compatible with each other and which can be controlled through a single point.

In full, the report:

• Analyzes the demand of US consumers, based off of survey results
• Forecasts out smart home device growth until 2020
• Determines the current leaders in the market
• Explains how the connected home ecosystem works
• Examines how Apple and Google will play a major role in the development of the smart home
• Some of the companies mentioned in this report include Apple, Google, Nest, August, ADT, Comcast, AT&T, Time Warner Cable, Lowe's, and Honeywell.

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the smart home market.