From a single smart speaker to a fully integrated home system wired with the latest IoT devices, the Smart Home is here to stay. Still feeling like the Smart Home revolution is just a gimmick? Check out these recent stats:
- *Revenue in the Smart Home market amounts to $23,556 million in 2018.
- *Revenue is expected to show an annual growth rate of 13.7%, resulting in a market volume of $44,791 million by 2023.
- *Household penetration is 27.6% in 2018 and is expected to hit 53.9% by 2023.
- *The average revenue per installed Smart Home currently amounts to $199.27.
- *A global comparison reveals that most revenue is generated in the United States ($23,556 million in 2018).
But while Smart Homes are gaining in popularity, the trend is moving in the same predictable fashion as any technology, and experts point out that a lot of kinks will need to be worked out along the way, including privacy, security and compatibility issues.
Not surprisingly, the most advanced Smart Homes currently belong to the uber rich. Oprah Winfrey’s $14 million winter home in Telluride, Colorado, features a smart radiant heat system designed to melt snow and ice from her driveway. And Mark Zuckerberg’s custom home system is powered by artificial intelligence, controlled with an app he created, and voiced by Morgan Freeman — which sounds like something straight out of a science fiction film. Of course, homes with this level of technology and integration are still far out of reach for the average home buyer, but as with any technology, the further it develops, the cheaper it will become. The first VCR cost $50,000 — $325,000 in today’s dollars — but eventually dropped in price to the point that they were ubiquitous in American households. It’s unclear how far away fully integrated Smart Homes are from that point, but given the pace at which technology moves in the 21st century, it might not be as far as we think.
At this point, however, the average Smart Home is still fairly primitive in comparison to the abodes of the wealthy and powerful. Most range from having a smart speaker — at this point the Amazon Echo and Google Home are the two most popular — to a more complete system that incorporates smart thermostats, smart appliances, smart security systems and smart entertainment hubs designed to work with those smart speakers as well as mobile apps of their own. Families use these systems to do everything from listening to music, watching movies and ordering groceries; to adjusting the temperature and lighting; to monitoring their kids, pets and front doors. But again, predictably, these systems are gaining the most favor with the typical “early adopter” demographic — young men. At this point, it’s the guys who love to play with toys and show off to their friends who are willing to spend the money and invest the time setting up and maintaining their Smart Home systems.
And while the benefits or Smart Homes are fairly obvious — what the authors of a recent Phys.org article dubbed “The Three P’s”: protection, productivity and pleasure — the technology is not without its problems at this point, some of them fairly serious. First, there’s the issue of privacy. Since smart speakers are listening to every word homeowners say by default, the examples of privacy violations are becoming increasingly common. But since devices such as smart security systems and thermostats document both the property location and when families are home and away and store it on cloud servers, the potential for something much more serious than unknowingly sharing a private conversation is there if — or, more likely when — that information is hacked. There’s also the issue of device integration, which still hasn’t reached the point one could confidently label “smooth.” That means while tech-savvy guys might feel confident setting up, using and maintaining it, it’s likely that other family members don’t. And while some smart devices are designed to help increase energy efficiency and lower utility bills, the amount of extra electricity a Smart Home uses could wipe out the financial and environmental benefits the devices are designed to provide.
So what does this all mean for independent home builders? As Smart Homes become more and more common, contractors need to be prepared to give buyers what they want and do what they can to make the technology easy to use. That means wiring their houses with ethernet and HDMI cables and installing outlets that make it easy for owners to install their gadgets. If they haven’t done so already, forward-thinking builders will also consider working with subcontractors who offer installation and setup and maintenance services for their less tech-savvy buyers who want a Smart Home but lack the confidence or know-how to handle those chores themselves. Among the many benefits CBUSA members enjoy is the strong collaboration our local builder networks provide, giving them ample opportunities to discuss, problem-solve and share references.
While it’s still in its infancy, the Smart Revolution is here, and it’s here to stay. Is your company ready for it…?
Interested in joining our nationwide network of premier independent home builders and enjoying all the benefits a CBUSA membership has to offer? Contact us today! And to keep up with our latest updates, join our group on LinkedIn.