Smart Home: 50% of NA Broadband Homes by 2020

May 4, 2016
According to Parks Associates, half of North American broadband households will also be smart homes by 2020, largely driven by wide ...
According to Parks Associates, half of North American broadband households will also be smart homes by 2020, largely driven by wide availability of high-speed Internet services.

Parks estimates that broadband adoption will reach 84% of U.S. households and 79% of Western European households in 2016, after both regions reached 50% penetration in 2006. The research house says such widespread access to high-speed data services is the main catalyst to growth in the connected home and consumer-based IoT markets, which is attracting players including Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), and Facebook (NASDAQ:FB), in areas such as home entertainment and connected consumer electronics, smart home and security, apps and mobile devices, and connected cars and healthcare.

Barbara Kraus, Parks' director of research, said, "Given the market leadership positions of these larger companies in their core businesses and the extensive ecosystems they have built, their entry into the connected home ecosystem will help accelerate growth in established categories and emerging technologies such as wearables, smart fabrics, and virtual and augmented reality."

Parks says ownership of smart home products increased from 16% to 19% of U.S. broadband households in the last year, and 44% of households that do not have a smart home device plan to purchase one in 2016. By 2020, 50% of North American broadband households are expected to be smart homes. The current and future growth has prompted several big players to enter this market:

Apple's HomeKit-certified devices hit the market in 2015 from brands such as ecobee, August, INSTEON and Lutron.

The initial success of the Amazon Echo led to integration of its Alexa natural language processing platform with several smart home control platforms and stand-alone devices, including SmartThings, Wink, INSTEON, and Philips Hue.

Facebook has announced its intent to help developers build IoT apps that power smart devices using the social network's Parse software, which could ultimately be controlled by consumers through the Facebook platform.

"Adoption of the connected lifestyle continues to expand as the supporting technologies mature and the value propositions of smart, connected devices and streaming services are better understood by consumers," said Brad Russell, Parks research analyst. "The groundwork is laid for continued growth in 2016 and beyond by increased access to fixed and mobile broadband and improved resolution of interoperability challenges by more collaborative, though fragmented, communications networks."