The Internet of Things (IoT) in the home market in Australia was still in the early stages of growth as consumers had yet to fully adopt smart home solutions. But, according to a new report by Frost & Sullivan, the introduction of smart home solutions, innovations in technology and new business models, combined with changes in the competitive landscape and new distribution channels were shifting the dynamics from a vendor-driven one to a more consumer-centric market.
Australian IoT in the Home Market 2015 report by Sandeep Karuppuswamy, Industry Analyst, Information Communication Technologies Group, Australia & New Zealand, Frost & Sullivan, identified energy management and security solutions as the fastest growing applications, with cost savings, efficiency and security taking precedence over previously dominant factors such as convenience and comfort. Involving both smart home and home automation solutions, this will drive demand for IoT in the home solutions, with the market value expected to tip A$200 million by 2020.
“Smart home solutions and home automation applications make up the IoT in the Home market. Smart home solutions have gained popularity in Australia as most are available as Do-It-Yourself (DIY) solutions and are cost effective and relatively easy to integrate. This segment will contribute the lion’s share of the total IoT market by 2020,” said Sandeep, in a statement.
The home automation segment had typically held the larger percentage of the total IoT in the Home market revenues in the past few years and while it would be larger segment throughout most of the forecast period, its share of the total IoT in the Home market was expected to reduce to just over 30 percent by 2020. “Smart home solutions offer functionality customisation and reduced cost, so over the next 5 years, more consumers will opt for this over home automation solutions,” added Karuppuswamy.
Over the next three years, from a communication protocol standpoint, facilitated by ease of use, and availability and integration with existing routers and modems, WiFi enabled smart home solutions would dominate the market. WiFi’s dominance was also due to limited availability of smart home devices functioning on other communication protocols, such as ZigBee and Z-Wave, though as the market evolved, this availability would increase.
The market, said the report, would then experience two major changes. An increased number of smart hub manufacturers would roll out smart hubs that would accommodate smart home devices functioning on different communicating protocols. Secondly, consumers would likely invest in communication protocols from smart home manufacturers like ZigBee and Z-Wave.
The Australian smart home solutions market comprised participants from diverse industries; including players from building automation and control, technology, telecom providers, smart appliance manufacturers and security systems vendors. Each of them provided smart home solutions by leveraging core competencies. Building automation and control players, such as Honeywell, ABB and Crestron, possess strong capabilities in automation, while technology companies, such as Google and Samsung, bring solutions that are driven by IoT and advanced technologies.
As the market matured, Australia’s telecom providers such as Telstra, Optus, iiNet, Vodafone etc. were expected to roll-out similar IoT in the Home models to those existing in other countries by leading global telecom providers, such as AT&T and SK Telecom. The availability of smart home solutions “as-a-service” would further promote widespread adoption.
Frost & Sullivan’s Australian IoT in the Home Market 2015 forms part of the Frost & Sullivan Australia and New Zealand Cloud, Data Centre and Infrastructure 2015 research program.
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