Carriers looking to the connected home as a new frontier of revenue and subscriber growth better think again or change their strategies, based on a new report from Argus Insights. The report estimates that consumer demand for connected home products and solutions is actually down 15 percent from May 2014.
As Fortune notes, Argus measures intangible things like "buzz" and "positive sentiment," but has a solid track record for accurately predicting sales of devices and trends related to usage. Basically, according to Argus, consumers are frustrated that connected home solutions are so difficult to install and set up.
"Based on our review of consumer interest, the state of home automation in 2015 is not looking good for anyone who sells or makes these devices," Argus CEO John Feland said in a statement. "Even though Google and Samsung made big purchases in this space by buying Nest thermostats, Dropcam and the suite of SmartThings products demand is stagnating. It is obvious that the early adopters have bought what they want and other consumers are expressing frustration that these products are complicated and difficult to set up and use."
Feland said that a broad swath of consumers are not seeing the value yet from home automation services like automatically having a thermostat set itself to a certain temperature at night or when you leave the house, or having the garage doors open when they sense your car is coming up the road.
"There is a lot of confusion about standards with Google introducing Brillo and Apple's new HomeKit," Feland noted. "Add in Wi-Fi, Bluetooth, Zigbee and Z-Wave and there is a lot for any consumer to grapple with during installation. Until things become easier and consumers don't have to cobble together a total solution, I believe we will continue to see this stagnation continuing for the rest or 2015 unless a new offering addresses these issues and revitalizes the market."
Certain groups, like the AllSeen Alliance and the Open Interconnect Consortium, are working on solutions and software protocols to make connected devices talk to each other in a more seamless fashion, but that has not hit mainstream consumer awareness.
Fortune notes that Argus is seeing a drop-off in interest across different connected home device categories, from energy monitors to security cameras and smart lighting. The challenge for makers of those devices, and carriers working with them to connect their gadgets as part of smart home solutions, is to make everything even simpler than it is today.
AT&T Mobility (NYSE:T) has bet big on the smart home with its Digital Life platform; last week the carrier said it is working on a trial integration with the Nest Learning Thermostat, which it plans to begin testing on its home security and automation platform this July. AT&T executives have said that developing and marketing clear use cases will be key to increasing consumers' interest and adoption in smart home solutions.
U.S. Cellular (NYSE:USM) is also getting into the smart home and automation market with its OnLook platform, which it launched late last year across Iowa and in Tulsa, Okla. The carrier has focused on making its platform simple and easy for customers to install themselves.
- see this Argus Insights post
- see this IoT Evolution article
- see this Fortune article
- see this Light Reading article
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