Smart Home Finally Begins to Move Into the Mainstream

Seattle -- According to a new report from NextMarket Insights, the worldwide smart home systems and services market will grow from a $3.6 billion to $14.7 billion by 2017, driven by growing acceptance of smart home technology into the mainstream and a fast-growing managed home automation systems and services market.

While the smart home has been an alien concept to many, more and more consumers understand how home automation technology can be used to better their lives through control and automation of their home subsystems. This increased awareness is in large part due to the entrance of a growing number of service providers into the market. Companies such as ADT Security Services, Comcast and Verizon are establishing themselves in the managed smart home market, in large part due to large marketing budgets and existing customer bases that far exceed traditional home automation vendors.

“The home automation market has finally started to fulfil its promise,” says Michael Wolf, Chief Analyst for NextMarket Insights. “After decades of being touted as a ‘next-big-thing’ technology, the maturation of hardware, software and the entrance of large managed service providers is helping the market opportunity transition from promise to reality.”

The development of extensible smart home software platforms is also helping to drive overall market momentum. Available from the likes of Alarm.com, iControl and AlertMe, these inherently extensible offerings allow new services to be gradually introduced to end customers over time. Emerging providers such as SmartThings are offering open APIs to foster growth of a partner device and services ecosystem.

“Today, end-users can now build a smart home automation system over time, rather than absorb the cost of a whole-home system at the time of purchase,” says report’s lead analyst, Craig Foster. “The maturation of wireless communications technologies such as Wi-Fi, ZigBee and Z-Wave has means that many home automation kits now available from retail outlets are essentially ‘plug n play’, so that even those with little technical knowledge can install a basic system.”

However, despite the growing promise of the smart home market, the home automation market has seen a number of false dawns. Managed smart home service providers will need to continue raising market awareness and deliver high value to end users in order ensure continued momentum in the market.

“While there will always be a segment of the market that will not see enough value in a home automation system, we believe the entrance of managed smart home services providers will increase awareness and help drive the market forward,” says Foster. “Because of this, we expect managed home automation subscribers to go from 2.7 million today to close to 35 million subscribers by 2017.”

The new report from NextMarket Insights, "Smart Home and Home Automation: Analysis & Market Forecast 2012-2017" is available today. 

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