What smart home systems are customers buying?
Smart Home Device Shipments by Product Type – World Market 2017 to 2022
- Smart home Device Shipments by Product Type
- World Market, 2017 to 2022
It is clearly established that consumers are putting the smarts in certain aspects of their home and lifestyle, preferring the ones that can have immediate impact like security, energy saving and one-touch or zero touch light controls.
Why the sudden uptake?
EASE OF DEPLOYMENT & INSTALLATION – While traditional smart home solutions were marred by the need for large scale rewiring of the space, most modern day solutions are plug and play, thus dramatically bringing down installation costs
EASE OF USE AND INTERACTION – While earlier smart home devices require proprietary control surfaces with no interoperability, the advent of IoT with traditional internet and LAN/WAN protocol set completely changed this. Anyone with a smartphone can now easily control all their smart devices at the touch of a button or through a voice command
How is the industry reacting to this demand?
The industry is witnessing a major consolidation play with 64 Acquisitions in the last 5 Years
Major Acquisitions by Strategic Players in the space are driven by the need to digitize their existing services & products to a household.
STRATEGIC PLAY – It is interesting to note that many of the strategic acquirers in the smart home space are traditional utility/connectivity service and household electrical system/ appliance providers. Examples include the following acquisitions:
- AlertMe by British Gas (2015) Utility Provider acquires Energy Analytics
- iControl by Comcast (2016) Connectivity Provider acquires Cloud Home Security
- ANOVA by Electrolux (2017) Appliance Manufacturer acquires Smart Kitchen Appliance
- August by Assa Abloy (2017) Lock Manufacturer acquires Smart Lock
- Netatmo by Legrand (2018) Electrical Component Manufacturer acquires Home Monitoring
Companies operating in the energy management, home monitoring, and home automation space are expected to witness an acquisition spree in the future
Kognetics, machine intelligence platform for M&A, predicts that exit likelihood for “Home Energy Management” and “Home Security Alarms” will remain very high in 2019. Furthermore, segments like Home Monitoring Cameras, Smart Thermostats, Home Environment Monitoring, Smart Switches & Plugs, Smart Locks, Smart Lights, Smart Gardening and Smart Home Actuators are likely to witness major acquisitions in the year, as companies consolidate capabilities and offerings across space.
What companies in the industry are ripe for acquisition?
According to Kognetics, companies in the aforementioned spaces like Tendril (Home Energy Management), Soraa (Smart Lights), EcoFactor (Home Energy Management) are highly attractive for acquisition play. The suggested companies have significant overall funding, positive growth signals and long term presence in an investor’s portfolio.
Which segments in the Smart Home space are likely to see funding?
As companies and investors look to pinpoint the next big product/technology/feature-set across the smart home segments, Kognetics predicts that the segments of Home Monitoring Camera, Smart Switches & Plugs, Smart Locks, Home Energy Management etc. are likely to attract the most funding, carrying forward the funding momentum that was witnessed in 2018 by the industry.
Furthermore, heavy duty appliances like garage doors, water pumps, air-conditioners, are not directly swappable for the homeowner. Devices that enable the homeowner to have IoT based control of these appliances (Smart Home Actuators, AC Controller etc.) are predicted to see an increase in funding activity
What companies are ripe for funding?
Companies like Encored, Orvibo, Oasys, Tantalus etc. that have had successful early funding rounds and demonstrated growth signals are primed for their next funding rounds. Companies operating in the highlighted spaces of Home Monitoring Camera, Smart Locks, Smart Lights, Smart Switches & Plugs etc. are working with the challenges of bringing an Emerging Product segment into the mainstream and if initial numbers are anything to go by, these product categories should graduate to mainstream in the coming years.
How are startups differentiating themselves from the pack?
Start-ups in the space are mostly geared towards providing next-generation feature sets utilizing AI, cheap SoC proliferation and widespread support for short-range wireless radios on chipsets. Examples of such startups include Lighthouse (Home Monitoring Camera), Smartfrog(Home Monitoring Camera), Latch(Smart Locks), Brilliant(Smart Switches & Plugs, Smart Lights) and Brava (Smart Kitchen Appliances)
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