Despite a decade of annual double-digit growth, the smart home market will remain stymied without significant development of its richest resource – smart home intelligence.
A new report from analyst firm ABI Research found the industry in the earliest stages of leveraging smart home data into more powerful and more valuable consumer products and services.
A swathe of industries, currently beyond smart home engagement, can build valuable applications and services based on the intelligence smart home data can provide.
“At present, there are only costly and limited ways to gain access to even a fraction of that data. But an emerging understanding that the billions of dollars in potential value being lost must be addressed,” said Jonathan Collins, research director at ABI Research.
ABI said the smart home market must shift to support more standardized and straightforward data sharing between smart home players across both OEMs and service providers to capture these untapped revenue streams.
At present, data is leveraged only in silos, typically by the largest smart home platform providers to support their own core business revenue streams be it advertising, hardware, or retail, it added.
In a market long free of standards, the industry has started to address proprietary data’s limitations. Initiatives such as Project CHIP have the support of the largest players in the industry to drive data interoperability between smart home device and smart home management platforms.
To realize the wider value of smart home, ABI said the industry will have to address similar strategies for making smart home data available from smart home platforms to third-party applications. There are signs of an industry already assessing the secondary value of smart home data.
Innovative smart home service provider Vivint has discussed the potential value to its subscribers and partners of extending support to additional services such as insurance and healthcare. There is also smart home platform start-up Sendal, which is focused on presenting smart home platform data to third-party services and sharing revenue to OEMs sharing their device data, according to ABI.
“There are significant issues that smart home players will have to address, not least consumer privacy and data regulation. Much of this market will not begin to scale until the middle of the decade. ABI Research expects that by 2030, smart home data access will drive more than a US$2.7 billion annual smart home market revenue opportunity from just four key vertical market opportunities,” said Collins.
In the meantime, ABI said there is a growing opportunity for forward-thinking smart home platform and smart home device players to begin to develop data strategies and capabilities on their own – either to establish new data opportunities or to prepare for the development across the wider market.