The Future of the Smart Home Market

By Rachel Nitschke | Jun 20, 2016

The smart toilet that will tell you if you have or are at risk for diabetes. The smart fridge that lets you see its contents at the grocery store from a mobile app. The smart thermostat that adjusts to be more energy efficient.

By 2020, 500 smart devices will make up the average consumer’s home, according to a Gartner survey.  Forward-thinking utility providers who are already transitioning to the service model are looking into complete home services by expanding their offering to include a full suite of home repair. Plumbing, HV/AC, carpentry— making home life simpler for consumers infinitely increases the value and stickiness of your brand. Managing all of these services via intuitive and predictive mobile apps is the future of service from utility providers.

This also catalyzes the conversation around utilities becoming the center of the smart home. Provide the platform, plug into that data and then use that data to inform the auxiliary services. Is the warranty of your smart washing machine about to expire? What if your utility provider sent you a reminder notification, then offering to send someone out to check it before the warranty expires.  A 2014 study from Gartner predicts that by 2022, homes will have as many as 500 connected devices. Without a single platform or assistance from a trusted provider helping them manage their smart home, consumers will drown.

What other features will characterize the smart home market’s evolution over the next five years?


It’s won’t be enough to collect data. Smart home products will need to use that data to better meet the preferences of consumers. Once the entire smart home market becomes interoperable with common standards, the smart home ecosystem will constantly share data and build more and more advanced analytics models based on behavior. For example, most people track sleep patterns through their Sleepcycle app, Fitbit One, or another wearable application, and will see their sleep data the next morning. This becomes so much more valuable to the consumer if history of poor sleep events was compared and connected to data on the environmental conditions of the house, such as the the temperature, amount of light in the bedroom or even what you ate for dinner. Your home will track the data on owner preferences to better meet customers’ needs.

Even beyond this, learning the infrastructure and environmental conditions that the products call home will also be a significant leap for the smart home market. Smart home products will be able to use the abnormalities in data patterns to diagnose for example, if an appliance has failed or a severe weather event has caused damage while the owner is on vacation.

There are already examples of this happening at digital plants in the manufacturing, utilities and oil and gas industries. Once this technology becomes more mainstream for consumers, it will definitely increase the brand loyalty on these products who will “know” their consumers.


This is an important one. The future of the market’s survival depends on its security. Letting devices track data user behavior is invasive enough. Having that information able to be penetrated by hackers would seriously breach the trust of consumers. Part of the central smart home platform offering needs to include continuously updating.

Securing the Industrial Internet of Things creates an obstacle for utility companies’ information security strategy. Although the proliferation and sharing of data translates to more effective operations and climbing profits, making sure that the devices that share that data are secure is a significant upfront investment. Many manufacturers equip IoT and smart home devices with the minimum processing power required, which will render encryption and other robust security measures not possible. Disposing of these connected devices also poses a risk, especially for the devices that consumers maintain and own; how do you make sure that devices are taken offline and corresponding data cannot be mined at a later time? If you do discover a security threat, will you be able to send out a patch within 24 hours as Tesla’s team did?

For utility companies especially, because many don’t manufacture their hardware, firmware or software, they are often at the mercy of the manufacturer to not make these shortcuts with connected devices. Even if a utility company has the utmost trust in a vendor, the burden will ultimately always lie on the utility company to ensure assets’ security posture and assess the level of risk.


The key aspect of the smart home is the usability and user experience. A U.K. study found that of the smart thermostat products currently available to consumers, zero passed basic usability standards. When the devices are controlled by mobile apps, the UX becomes split across a series of UIs. Rather than making consumers feel like they are viewing several different, disjoined UIs, a continuous UI and user experience will make a world of difference in consumer adoption. Start viewing an investment in user research, and ultimately, a better user experience, as insurance for consumer adoption. Only 16 percent of users will try an app more than once; 90 percent delete after opening once, without user research you’re taking a BIG risk.

What’s different about Internet of Things-enabled products in the smart home?

  • Faceless. For many products, there is no log-in or authentication required to use. Customizing the user experience to different personas for the different users of the product becomes much more difficult.
  • Privacy. Look no further than the recent consumer concerns over the Amazon Echo “always listening.” Although the end result does benefit the end-user with a more tailored and personalized experience, the feeling of privacy invasion will pervade every experience and is something that developers need to keep in mind when developing features.
  • Distributed. Controlling a sprinkler system via two interfaces, smartphone app and product control panel, is very different than a mobile-only driven experience. Rather than a series of disconnected user interfaces and experiences, IoT-enabled products need to treat every interaction from each possible device as a connected user experience.
  • Critical and unpredictable environmental factors. When the device is part of the environment with which the user is interacting, simply observing how a user interacts with an interface will not suffice for user research. The environment is part of the experience, and the application’s features must take that into account. For example, any application that could be used outside in sunlight requires a dark background so as not to strain the eyes.

What else is coming for the smart home market? Find out in our latest ebook which has our latest research on how utility companies can do more to get ahead of the competition with the smart home.






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