October 23, 2017
On September 27, Amazon followed up on its 2014 release of Amazon Echo by launching the next generation of Echo devices including Echo, Echo Plus, Echo Connect, and Echo Spot. Echo Plus is the most important of these devices due to its built-in smart home hub, which makes it easy to connect your smart devices. Controlling lights, playing music, and getting information are the key activities for which consumers are currently using smart home devices.
Google, Apple, Microsoft, Alibaba, Tencent, and other Chinese companies are also launching products in the smart speakers category so they can build home device management applications and services on top of this platform (see Figure 1).
We recently published the Forrester Data Smart Home Devices Forecast, 2017 to 2022 (US); some of the key findings are as follows:
- Smart home devices are expected to grow tenfold between 2017 and 2022. Forrester expects the adoption of smart home devices in the US to be 10 times higher by 2022, driven by smart speakers and the devices that these speakers can control, such as smart bulbs and smart thermostats. At that point, we expect that one in five US households will have at least one smart home device (excluding smart speakers).
- Amazon Echo is leading the race in the smart speaker category. With Amazon Prime customers as the key target audience for the Amazon Echo series, Amazon is leading the race for smart speaker adoption. We expect Amazon to launch more products like Echo Show in home camera categories to add more connected devices in a house.
- Cost remains the major inhibitor of smart home adoption. A recent Forrester Data Consumer Technographics® survey indicates that high monthly service costs remain the key concern of 53% of customers and inhibit the adoption of smart home devices. Concerns about privacy and initial setup costs follow.
Over the next five years, we expect the installed base of smart home devices in the US to increase at a compound annual growth rate of 42%, powered by the smart speakers category.
Our forecast includes 12 main categories of smart home devices: smoke/carbon monoxide detection, do-it-yourself home monitoring, professionally monitored home security systems, connected door locks, smart thermostats, smart bulbs and lighting, electricity monitoring, dependent care monitoring, pet monitoring, lawn and garden, connected speakers, and smart speakers.
Please register for our Smart Homes Forecast: US Adoption Of Smart Speakers And Their Online Retail Impact webinar, which will be held on October 25, 2017 from 11:00 a.m. to 12:00 p.m. Eastern time, to learn more about the key findings of this forecast.