Hardware will continue to drive the growth of the smart home market in the next 5 years

According to reports, the 2016 International Consumer Electronics Show showcased a large number of smart home devices, highlighting the growth and potential of this market. As the infrastructure and service products developed in the past few years have laid a solid foundation for the popularization of smart home devices, sales of smart home devices will nearly double in the next 12 months. Although hardware will continue to drive the growth of the smart home market in the next five years, the transition to regular services is already "in progress." According to market research company ABI Research predicts that by 2020, the proportion of recurring services in the smart home market revenue will increase from less than 20% at present to nearly 25%.

Promoting the transition to recurring services is the increasing popularity of manageable smart home systems from many manufacturers, including home security, telecommunications and cable television, and retailers. Manufacturers of such systems include ADT, Vivint, AT&T, Deutsche Telekom, Comcast, Lowes and Staples. In addition, a new generation of self-installation equipment and systems from startups and technology giants such as Google and Samsung have also promoted the growth of recurring services including data collection and storage.

ABI Research principal analyst Jonathan Collins (Jonathan Collins) said, “As smart home functions continue to enter new homes, manufacturers will benefit from the initial sales of equipment and systems, but their goal is to convert the sales of equipment and systems into Services that can generate recurring income. Similar to traditional home security services, the purpose of managing smart home system pricing is to win new customers with low-priced equipment, thereby bringing long-term recurring income."

DIGITIMES said that although security vendors are currently the leaders in the managed smart home system market, by 2020, telecommunications/cable TV companies and retailers will have a share of the market. The ability of these manageable service providers to smoothly transform DIY installation users into their users will become an important way for regular service growth.