The smart home market has seen significant growth since 2010. Specifically, less than 0.5% of homes in the American region had connected home devices such as thermostats, lighting, security and entertainment in 2010; by the end of 2017, nearly 12% of households in the region will have connected home devices, an average of six devices per home.

The success of smart homes started with professional security providers offering bundled packages, focused mostly on security monitoring. However, due to the cost of professional contracts, consumers began to embrace the do-it-yourself (DIY) approach. Despite the challenges and opportunities that come with professional and DIY approaches, the momentum of smart home growth depends on these two approaches working symbiotically.

Smart Home Technology Partnerships

A few recent examples include the relationship with Vivint and Best Buy and Vivint with Sprint. In most cases, Best Buy is a competitor to Vivint because a consumer can buy point devices and ecosystem and install it themselves or enlist the help of the Geek Squad. Even more recently, Nest announced optional professional monitoring with its Nest Secure products in partnership with MONI.

Although this approach isn’t new, Scout Alarm, LiveWatch and SimpliSafe already have similar approaches, it continues to stress the need to combine multiple channels and approaches to the smart home market. Moreover, these are examples of symbiotic partnerships that will help the total market.

In 2017, there were about 122 million smart home devices shipped globally. The retail channel represented about 62 percent of all device shipments in 2017 and will represent about 70 percent in 2021. Despite the increased demand for professional installation, the do-it-for me approach, most the volume remains with ad-hoc purchases. This includes a consumer video camera or a smart thermostat purchase from a retailer or when a consumer wants to add devices to an existing professionally installed system, they often will buy products from retail.

There is a growing need
to combine multiple
channels and approaches
to the smart home market

Furthermore, the multiple-system operator (MSO) and professional security provider channels will be evenly split in 2017; however, by 2021, the MSO channel is expected to be double the market size of the security provider channel.

The primary reason for this rapid change over five years is the lack of professional security providers in EMEA and APAC; as a result, MSOs will dominate the professional channels in these regions, while across North America, security providers will maintain a strong market presence.

Top Trends In Smart Homes

A few of the top trends in smart homes to watch out for over the next 12-24 months include user interface, flexible services, cyber security and adjacent markets. The user interface trend continues to evolve for the smart home. Although voice commands are trending towards becoming the new user interface beyond 2017, the voice will not be the only means to control and interact with the smart home. Mobile phones or tablets will still be required to configure most devices.

This means that although the Amazon Echo can control a WeMo plug, the consumer will still be required to download the WeMo app and configure the device. However, after the device is added to the same network as the Echo, the app is no longer needed on a day-to-day basis. Displays will also become increasingly popular throughout homes because the smart home is becoming increasingly isolating.

DIY ecosystems such as Wink or SmartThings or Philips Hue lighting are often limited to one person with one mobile device
Mobile phones or tablets will still be required to configure most devices in future smart homes

DIY ecosystems such as Wink or SmartThings or Philips Hue lighting are often limited to one person with one mobile device. As a result, other members of the household would need access to that mobile device or would need access on their own device after being authorized by the primary user (all assuming a smart speaker is not being used).

This is very limiting and the user experience is negatively affected. (Voice assistants like Google Home have added a feature to allow multiple accounts using voice recognition, which will help personalize smart homes.) However, displays in the home are a way to access all devices for anyone in the home.

Smart Home Equipment Cost

Flexible service offerings and pricing is already taking shape across smart home offerings. DIY installed smart home systems such as Scout Alarm already offer no contract monitoring. Professional monitoring companies are already offering no contract pricing and providers such as Comcast are looking to pilot programs for just video monitoring bundled with Internet for a low monthly fee.

Options for financing are also going to become commonplace. Smart home equipment is expensive, especially when attempting out outfit a modest size home (2,500 square feet +). Immediate access to services is becoming more critical. This means consumers should be able to access on-demand service options directly from a mobile device to activate or deactivate professional monitoring. Lastly, pricing still needs to come down for many smart home devices but there is a threshold.

Since many smart home devices today do not have a recurring monthly fee, the cost of maintaining mobile apps, platforms and support services must be propped up by higher device prices. However, companies can look to offset some cost by sourcing different material. According to the IHS Markit Teardowns Team, the cost of the metal ring on the Nest 3rd Generation thermostat is $10, which is more expensive than the LCD display which comes in at $9. In comparison, the Ecobee3’s most expensive part is the LCD screen at about $4.00. As a result, the Ecobee3 costs nearly $20 less to manufacture compared with the Nest 3rd Generation thermostat.

Smart Home Security

Securing the smart home will be a hot topic over the next 12 months. One method of change will be manufacturers requiring consumers to change default passwords. Manufacturers need to start requiring consumers to change passwords before a product can be used. Home routers, for example, often use ‘admin’ as the username and ‘password’ as the password and most users never change these.

New smart home technology will improve care for the elderly
For elder care, door/window sensors and motion sensors could be used in combination with software to monitor routine

The challenge that many consumers and suppliers face today is that many passwords are built directly into the firmware and the consumer has no way of making changes. As a result, the integrity of the device comes down to the supplier. As threats become more severe with ransomware and other botnet attacks, manufacturers will need to implement additional thresholds of threat assessments to keep consumers safe.

One method involves two-factor authentication. IHS Markit expects the monetization of cyber-security for residential customers to start appearing in 2018. This means that security service providers would monitor network traffic for the consumer. The software would not be monitored or implemented directly by the consumer; instead, the service provider will take care of all the monitoring of network traffic. What this means is that the software or router would monitor network traffic for patterns and manage which servers are pinged by IoT devices such as consumer video cameras.

Care Homes And Insurance Companies

Although the compound annual growth rate (CAGR) for smart home device revenue is set to exceed 50% through 2021, the growth could be much higher with support from adjacent markets such as elder care, construction/developers and insurance companies.

For elder care, door/window sensors and motion sensors could be used in combination with the software to monitor routine. If an elderly person suddenly changes their routine, this would alert caregivers. This same premise can be used in professional elderly care settings to help staff prioritize patient needs.

IHS Markit expects the monetization of cyber-security for residential customers to start
appearing in 2018

Working with insurance companies is another method of reaching the customer with smart home devices; however, the use of insurance is highly fragmented across regions. As a result, North America is the best opportunity as of 2017 to partner with insurance companies. Furthermore, insurance companies are mostly interested in managing the entire ecosystem.

Blending Professional And DIY Smart Homes

While offering subsidized equipment (smoke detectors and water leak detection) can reduce claims, insurance companies need to have full access to the data – as a result, they are more interested in creating their own platform from scratch or working with a provider to support data analysis. Working closely with builders will also continue to gain traction, especially across EMEA and APAC. By working closely with builders, this reduces the challenges associated with B2C channels and the overall cost of the system can be masked by the mortgage payment, resulting in more system installations with less distribution expense.

Overall, the line between professional and DIY smart home is blending. CEDIA and Amazon recently announced a collaboration and Netgear Arlo announced the first wire-free and battery-operated ONVIF compliant camera.

With the combination of voice-control, consultations from Amazon and Best Buy, the reduction in the pile of smart home hubs in the basement as more protocols are embedded in gateways/routers, and no further need for the special Apple chip for HomeKit compliance after iOS 11, smart homes are becoming easier to achieve both for consumers and professionals.

Share with LinkedIn Share with Twitter Share with Facebook Share with Facebook
Download PDF version Download PDF version

Author profile

Blake Kozak Principal Analyst, IHS Inc

In case you missed it

The Importance of a Secure Perimeter in Safeguarding our Schools
The Importance of a Secure Perimeter in Safeguarding our Schools

Schools play a key role in shaping our future. Following the reopening of classrooms up and down the country, young minds are returning to some normality. Once again they're being inspired, learning useful skills, and forging new interests to ensure our country's continued prosperity. Schools need a comprehensive security infrastructure to protect the children who attend them. Most notably, secure perimeters that keep unwanted people out, but also ensure visitors, parents, and students alike can access their shared community space without feeling segregated or unwelcome. Robust boundary fencing  However, although safety is often the primary concern of parents, with tighter budgetary constraints and funds prioritised to make schools COVID safe, it can be all too easy to let important perimeter replacement or improvement programmes slip. The purpose of boundary fencing is to restrict unauthorized entry and exit The purpose of boundary fencing is to restrict unauthorized entry and exit from school grounds, and should be specifically designed to be fit for purpose. Opting for fencing with a welded pale-through-rail construction and concealed anti-tamper connectors between  fence panels and posts delivers a robust boundary that's virtually impossible to break through. This style of fencing also gives a better finish with no visible joints or unsightly bolts. Attractive and practical solutions Unlike generic riveted palisade fencing, this solution is both attractive and practical, more so now that LPS 1175 SR1 certified and Secured by Design versions are available. The style of fencing should meet a school's desired security and safety requirements, simultaneously, it should not compromise on aesthetic considerations. As part of the public face of the school, it should be attractive as well as functional, helping overcome any concerns of creating a prison-like environment and promote a sense of well-being. It's recommended that perimeter fencing should be: a minimum of two metres high, vandal-resistant and sturdy, grounded on a hard surface, challenging to scale, and have an anti-climb topping, much the same as a high-security option. Access all areas Each educational site must consider the number of necessary entrances A perimeter fence requires secure access points and gates. Each educational site must consider the number of necessary entrances. These should be kept to a minimum, to make it easier to maintain control of visitor movement. However, in larger schools this is not always possible and additional entrances may be required to prevent potentially dangerous congestion at the start and end of the school day. Furthermore, separate gates must be installed for vehicles and pedestrians to ensure they are kept at a safe distance, and avoid unnecessary openings of large, double leaf gates. All access points should be locked during the day to keep students on-site and prevent intruders from gaining access to school grounds. Gates should ideally be matched in  design, height and construction to the fencing,  to prevent creating vulnerable areas and compromising security. Automatic vs manual While automatic gates offer more control, manual gates shouldn't be overlooked. Not only are they easier to install and usually cheaper than automated gates, but they also don't rely on power, so if your site's supply is cut off, they provide a hassle-free exit. Furthermore, gates that are only used at the start and end of the day can be easily locked manually by staff. However, automated gates do offer welcome flexibility, as they include access control devices such as remote controls, keypads and card readers, which will also increase the school's security. They're also robust and heavy, meaning it's incredibly difficult to force them open. Electric gates offer additional versatility with a choice of either full automation, or a hybrid of manned and automatic security, with staff able to allow visitors access via intercom or video system. Securing outdoor facilities It’s also essential to consider outdoor areas when it comes to specifying security options for educational environments. Specialist security fencing should be specified where recreational areas double up as the school’s boundary fencing. The security of the site's sports facilities will also need to be considered. Commonly known as MUGAs (Multi-Use Games Areas), enclosures can be designed with specialist mesh systems to allow multiple sports to be played in the same location while providing safety to participants, spectators and buildings. When it comes to play areas in nurseries and junior schools, installing RoSPA approved and BS EN 1176 compliant fencing and gates is recommended. These are available in both timber and steel options and tested for their ability to provide a safe fencing and gate solution - designed to reduce the risk of limb entrapment. Acoustic fencing is also worth considering for these environments, particularly in urban areas or where housing is close to school play areas. It can help reduce incoming ambient noise from neighbouring busy roads, railway lines, or construction sites, and contain the school noise within its boundary. Offering sufficient protection Focus on learning unimpeded by threat The current generation of children deserve an environment where they can focus on learning unimpeded by threat. Schools need robust perimeter solutions that welcome pupils, offer peace of mind to parents, and provide them with sufficient protection against intruders. Ultimately, it's the responsibility of the head teachers to engage in dialogue with knowledgeable security professionals to get the most appropriate and effective security solutions for their school, staff and students.

Can 5G Boost Innovation in the Smart Home Market?
Can 5G Boost Innovation in the Smart Home Market?

We still have some way to go before we see 5G service rolled out as a UK-wide service, but we can discuss future implications of 5G, and how it can improve device capabilities once its widely accessible.  The impact of 5G lies within the increase in the amount of data that can be transferred between smart home devices through a cloud-based system. By utilising the cloud’s mass computing power and its ability to process data in larger capacities, we are able to receive more in-depth analytics that can help improve smart home devices by making them faster, more informed and intelligent.  Will  5G  boost innovation in the smart home market, if so, how?  Innovation using 5G can be shown with current smart home CCTV systemsAn example of innovation using 5G can be shown with current smart home CCTV systems. Products at present allow you to use functionalities such as motion detection. As it stands, this is a basic form of monitoring that monitors changes in picture and notifies the owner when something unusual has happened.   Once 5G comes into play, the video data captured can be sent off to the cloud, interpreted in more detail, and can allow the system to conclude whether the movement is from a human, object or animal. Facial recognition could also come into play here, providing a more seamless service when reporting incidents to the police.  Similarly, you can use data from various different devices within your home to toughen security measures. A video camera used in conjunction with a presence or heat detector can eliminate small errors by providing the ‘bigger picture’ with more data points to work with - an amalgamation of all smart devices used in tandem.  We can’t solely rely on smart devices to make decisions for us, but what we can do is improve device processing so that by the time we step in, we already have all the necessary information to assess the appropriate call to action.  What will 5G enable homeowners to do within their homes?  Smart homes using 4G currently operate in a fragmented fashion, incorporating Wi-Fi, Bluetooth, and other network protocols. Unlike 4G, 5G will work with low-power devices, making it useful for a broader array of connected products. This means that all devices we will be able to connect any internet connected product in order to allow integrated communication between all devices.   Can be connected to work together in conjunction with your home system Your fridge and other kitchen appliances, for example, can be connected to work together in conjunction with your home system to create an entirely automated home. If your freezer is internet connected, you may get a notification if it loses power, but as everything else is also connected within your home, you will be able to determine whether it is a power fault or product fault straight away. Faster connectivity means that users can quickly take advantage of the data their smart devices provide, such as water use sensors which can monitor levels and allow for behavior changes to curb water usage The same can be applied with vehicles. Cars in future will be autonomous and include an integrated dashcam which can then be connected to your security system to provide added security on-site in the peripheral of your home, alerting you to potential intruders before they reach your front door. 

AI Deployed To Safeguard Cities: How, Where And What
AI Deployed To Safeguard Cities: How, Where And What

The threat landscape we operate in today is changing all the time. Around the world, pressures on law enforcement bodies remain incredibly high as they face the challenge of rising international threat levels and a backdrop of intense political, social and economic uncertainty. It is a challenge that demands a considered, proactive and dynamic response. It’s clear that new technologies, such as Artificial Intelligence (AI), can dramatically improve the effectiveness of today’s physical and cyber security systems and help us to better defend against a wide-spectrum of threats. Finding the balance Specifically speaking, for physical security systems to be effective, they must have the full support of the public. Airport-style environments where security checkpoint processes are implemented are both time consuming and obstructive, and feels, at times, they are in no one’s best interest. Oppressive, fortress-like environments are likely to quickly lose the backing of the public, who want to be able to go about their daily lives without being delayed or obstructed by cumbersome security checkpoints and procedures. For physical security systems to be effective, they must have the full support of the public However, after a large-scale security threat or attack occurs, it is often these more overt systems that we gravitate towards, often fueled by a proven track record of both deterrence and detection. It’s the antithesis of ‘out of site, out of mind’ security. Having these large, bulky overt security systems offer reassurance to people and create a greater sense of security. But what if we could instill this sense of security without monstrous overt systems? What if today’s physical security systems could allow for seamless people flow while creating safe environments, all done in a covert manner without interrupting peoples’ way of life? This is exactly what can be achieved with the some of the new physical security applications that incorporate AI. Security solutions with AI: how, what, where? Today, security solutions driven by AI technologies are being developed and can be covertly deployed across a range of physical environments to protect our global citizenry. These new AI-driven technologies are taking multiple different forms, depending on the locations they are designed to protect. Video management surveillance systems (commonly referred to as VMS systems) are being enhanced by AI/computer vision technology to identify objects. These enhanced VMS systems can be deployed both inside and outside of buildings to identify and flag forbidden objects, such as visible guns, knives or aggressive people, in a wide range of public spaces, such as schools, hospitals, sport stadiums, event venues and transportation hubs. Recognized threat objects in hand or suspicious behaviours can be identified and flagged instantaneously for onsite security to further investigate. In addition, targeted magnetic and radar sensor technologies, concealed in everyday objects like planter boxes or inside walls, can now scan individuals and bags entering a building for concealed threat objects. Using AI/machine learning, these two sensor solutions combined can identify metal content on body and bag and match the item to a catalog of threat items, such as guns, rifles, knives and bombs with metal shrapnel. Without this advanced multi-sensor solution, it becomes nearly impossible to discover a weapon on a person's body before it appears in an assailant’s hands. This multi-sensor solution allows for a touchless, unobtrusive access to a building, but allows for immediate notification to onsite security when a concealed threat is detected. The hidden technology thus empowers security staff to intercept threats before they evolve into a wider scale attack, while also maintaining the privacy and civil liberties of the public, unless, of course, they are carrying a concealed weapon or pose a physical threat. AI-powered solutions proactively help onsite security to effectively safeguard the public Unlike many large, fixed detection security systems, AI-powered solutions proactively help onsite security to effectively safeguard the public without causing mass obstruction and disruption. Soft target hardening        Hardening a facility against physical attacks and threats can be expensive, as well as maintaining and running large fixed detection equipment. It may also result in the threat shifting to ‘softer’, less secure targets, for example schools, music venues and places of worship, all locations we’ve see active attacks in the past decade. Around the world, we have seen the devastation to communities and the aftermath impact of these attacks. In the USA, for example, in February 2018, a 19-year-old gunman walked into Marjory Stoneman Douglas High School in Florida, and opened fire, killing 17 students and faculty members. And in the UK in May 2017, a suicide bomber attacked a concert venue in Manchester, tragically killed 22 people.  It is a global priority to make these soft target public gathering places more secure. But in doing so we cannot turn them into fortresses. The security industry, public sector and national and local government must collaborate to deploy intelligent systems with technology at their core to not only protect lives, but also preserve a way of life. Integrated systems and behavioral detection One of the biggest advantages of using AI technology is that it’s possible to integrate this intelligent software into building smarter, safer communities and cities. Essentially, this means developing a layered system that connects multiple sensors for the detection of visible and invisible threats. Integrated systems mean that threats can be detected and tracked, with onsite and law enforcement notified faster, and possibly before an assault begins to take place. In many ways, it’s the equivalent of a neighborhood watch program made far more intelligent through the use of AI. Using technology in this way means that thousands of people can be screened seamlessly and quickly, without invading their civil liberties or privacy. It’s not only knives, guns and explosives that intelligent systems can detect. They can also be trained to detect behavior and potential invisible biological threats, such as viral threats currently facing our world today. This does not mean profiling individuals.    Instead, using AI that is deployed on existing CCTV or thermal camera systems, it looks for indicators that may identify a physical altercation and disturbance, an elevated body temperature, indicative of viral fever, or lack of a face mask for health safety compliance. When integrated, these solutions can provide onsite security with up-to-the-minute information to allow greater protection of the properties they serve. By using these intelligent, non-intrusive technologies, today’s security personnel are now more capable of detecting a wide range of threats. This is the future of public safety and security, and we should expect to see these new technologies becoming more common over the coming years, as cities around the world strive to create smart, safer communities. The human element While technology can make a significant impact to existing security systems, it would be wrong to position it as the end-all, be all to preventing future attacks. Technology is only part of the solution. Well trained security personnel are also required; individuals who know how to use new technologies and the data they provide, and then make informed decisions about how to engage a potential bad actor or threat. Not only will a properly trained security staff member help to prevent an attack from happening, but the extra insight provides by these intelligent systems can potentially interrupt an attacker in planning and walk through stages, or even before a weapon is drawn. This alone has many benefits beyond just preventing an attack. It means that authorities can help these individuals, some of whom may be suffering from mental health issues, to get the help they need from professional healthcare workers. By security personnel working with local authorities and healthcare professionals, potential attackers can get the support they need, from de-radicalisation programmes to specialized counseling, helping them return to being a healthy, productive member of society. These intelligent systems can potentially interrupt an attacker in planning AI for safer communities AI’s ability to detect visible or invisible threats or behavioral anomalies will prove enormously valuable to many sectors across our global economy. Perhaps none more so, though, than to institutes of education, where we have seen many violent attacks over the course of the last few years. Specifically, the application of AI for detecting odd behavioral activity could be used to identify potential active shooter attacks, or even students who may be depressed and prone to committing suicide. Both tragedies we see weekly around the world. One thing is clear, cross-sector collaboration and the application of integrated, intelligent AI technology that puts data and ultimate control into a human’s hands can be key to making our communities safer places to live.