The Australian Internet of Things at home (IoT@Home) market grew 55% in 2017, reaching $583 million according to new research from technology analyst firm Telsyte.
The Telsyte Australian IoT@Home Market Study 2018 found rapid uptake in smart speakers, as well as increasing internet connectivity of appliances like air conditioners and security cameras, which is creating the foundation for an internet-connected device explosion expected to surge beyond 2020.
According to Telsyte research, the average Australian household has 17.1 connected devices in 2018, up from 13.7 in 2017. Telsyte expects this number to grow to 37 by 2022 or 381 million internet-connected devices nationally. Most of this growth is expected to come from IoT@Home devices and associated services, which Telsyte categorises into smart energy, smart security, smart lifestyle and smart hubs.
Telsyte believes the smart lifestyle sector – which consists of whitegoods, appliances and house and garden products – will be the largest sector by 2022, as manufacturers bring to market products that have internet connectivity as a standard feature.
“Building connectivity into consumer products will allow manufacturers to develop new business models and provide intelligent services that not only change consumers’ lifestyles, but disrupt a number of traditional industries,” says Telsyte managing director Foad Fadaghi.
Telsyte research shows a clear shift in where consumers start their IoT@Home journey. More consumers are now interested in enhancing their kitchen with smart speakers and smart appliances.
However, despite the potential growth of the IoT@Home market, hurdles such as privacy and cyber security concerns are impacting consumer appetite. Some 41% of Australians are “more concerned about cybersecurity than last year” and 61% are concerned about their private information being exposed online.
Smart speaker sales boom, laying the foundation for an IoT@Home explosion
Telsyte estimates around half a million Australian households currently own a smart speaker, up from less than 10,000 in 2016. Telsyte estimates around 3 million Australian households will have a smart speaker by 2022.
The smart speaker category was the fastest growing IoT@Home product in 2017, with Google Home and Google Home mini being the market leaders driven by holiday season sales, free giveaways with Pixel 2 smartphones, and multipack offers. Telsyte expects Apple and Amazon to catch up as their products became more widely available in 2018.
This increase in smart speaker usage is expected to lay the foundation for demand for other IoT@Home products. Research shows smart speaker users are twice as likely to purchase other IoT@Home products compared to non-users.
The study also found that around 87% of smart speaker users are seeking advanced IoT@Home functions based on AI and machine learning, compared to 68% for those without smart speakers. Some examples include alerting if strangers are repeatedly appearing around the home, or air conditioners that adjust based on knowing a change in schedule through access to an online calendar.
The most important factor for consumers purchasing IoT@Home products are that they are easy to use or “just work”. This includes being easy to setup, and not requiring active human monitoring.