A smart home used to mean connected technology for gaming or music, but new technology is going far beyond that.
Estimates from the Consumer Technology Association (CTA) suggest the smart home market will reach $1.2 billion in revenue in 2016. The association defines the smart home technology category as including items like smart thermostats, smart smoke and carbon dioxide detectors, Wi-Fi cameras, smart locks, smart home systems, and smart switches, dimmers, and outlets.
Greg Roberts, vice president of marketing at Icontrol Networks, said insurance agencies are starting to look at smart home devices, with two out of five insurance agencies invested in some kind of program with a connected device maker in 2015, citing data from Accenture.
“We’ll continue to see this trend because security—and the peace of mind that comes with it—is both a main driver of smart home adoption and a top reason homeowners purchase insurance,” Roberts said in a blog post. “This means there is an opportunity to align the benefits and offer consumers an additional incentive to purchase technology, e.g., discounts on home insurance.”
Smart Home Firms
Popular smart home products include smart thermostats like Nest, owned by Google (GOOGL). Smart locks by Kwikset, part of Stanley Black & Decker (SWK), and Schlage, part of security products firm Allegion (ALLE), let you remotely lock or unlock your home.
But beyond energy efficiency and security, other smart devices are also coming on strong. Samsung’s Family Hub refrigerator has a Wi-Fi enabled touchscreen that lets you manage your groceries, connect with your family, and perform other tasks. Samsung, LG Electronics, and Whirlpool (WHR) are among some of the companies making smart washer/dryer combos that let you monitor cycles remotely. Amazon’s (AMZN) Echo speaker lets you use your voice to control connected technology.
But these products aren’t cheap. Nest costs $250, versus a programmable thermostat that can cost as little as $25. Samsung’s smart refrigerator is $3,799, and the washer/dryers from LG and Whirlpool are upwards of $1,600 each.
Downsides of Being Smart
Even though CTA forecasts a 21% increase in smart home technology buys, some consumers haven’t moved that way. Not only are there the upfront costs, but several analysts said some products like smart large appliances aren’t replaced all that often, meaning the technology may become obsolete before the appliance reaches the end of its lifecycle.
There are other downsides, too. There’s a lack of compatibility with some devices, as the industry is still in a startup phase, according to an article on HomeTone.com.
Privacy is one of the biggest concerns. With a "home automation system, you control most of these gadgets with the help of your smartphone,” HomeTone said. That could mean problems if the phone gets stolen.
Roberts said it takes a while for some technology to take off, noting that although the first smartphone debuted back in 1992, it took more than 15 years for Apple (AAPL) to release the first iPhone with the incorporation of the app ecosystem. “But once it did, the concept took off.”
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