1.5 million developers are working on Smart Home solutions. And yet, the Smart Home market is struggling to move beyond early adopters into a mainstream market. Data from our new Smart Home Landscape 2015 report sheds light on this conundrum, and much more.
The Smart Home is on fire. At least, IoT developers think it is. [tweetable]A third of them (32%) are currently working on Smart Home projects, according to our Q2 2015 Developer Economics survey. That’s close to 1.5 million developers.[/tweetable]
Does this mean that the Smart Home market is going to take off, fueled by thousands of clever solutions? Maybe not.
The number of smart connected homes could hit up to 700 million homes by 2020, rising from somewhere between 100 million and 200 million homes now, according to Gartner. But others are not so sure. In fact, [tweetable]the Smart Home market is struggling to move beyond early adopters into a mainstream market[/tweetable]. Gartner itself hints at a “lack of a good business model or the immaturity of home IoT products”, which “has not stopped gateway makers from trying to develop the market”. Fortune magazine puts it this way: “Early adopters, venture capitalists, and entrepreneurs have bought into the idea of a smart home, but mainstream consumers haven’t.” And according to Argus Insights: “Early adopters have gotten what they need, and now products are not compelling typical consumers to create a connected home. Acquisitions by Google and Samsung have done little to spark consumer interest.”
It will be up to developers to lift the Smart Home into the mainstream. It’s up to them to experiment and discover new, better, use cases for the Smart Home. And therein lies the catch.
Hobbyists rule
While today’s Smart Home developers are plentiful, the vast majority of them are not pushing to develop the market.
Out of all Smart Home developers, 70% are involved in the Internet of Things as a hobby or a side project. Only 30% are doing IoT in a professional capacity. When we look at the goals and motivations of Smart Home developers, this picture becomes even clearer. More than a third of Smart Home developers (36%) are Hobbyists, primarily interested in building solutions for themselves. Another third (32%) are Explorers who are learning the ins and outs of IoT.
For Hobbyists in particular, Smart Home is an attractive choice: 57% of Hobbyists choose Smart Home, versus only 37% of non-Hobbyist IoT developers, a 20 percentage point (pp) difference. On the other hand, professional Guns for Hire working on commission (-10 pp), Gold Seekers hoping to strike VC money (-11 pp), Optimizers aiming for efficiency gains (-18pp) and Data Brokers selling repackaged data (-18 pp) seem to shun the Smart Home.
In short, [tweetable]7 in 10 developers, significantly more than in other IoT verticals, are building solutions for their own benefit first, not yours or mine[/tweetable].
Many of the solutions that they build are in a sense reinventing the wheel, reimplementing obvious use cases (e.g. access control, lighting controls) that don’t push the envelope. They’re certainly not building the comprehensive, ecosystem-driven systems that might make Smart Home technology worthwhile for the average consumer.
The next wave of Smart Home developer ecosystems
Several shifts need to happen for the Smart Home to reach mainstream. Smart Home Hobbyists and Explorers need to graduate into Smart Home entrepreneurs. Those innovators need to discover new, more compelling use cases. Thirdly, a new generation of Smart Home platforms must empower entrepreneurs to bring those solutions to market.
The good news is that these shifts are already in motion.
In our newly released Smart Home Landscape 2015 report, we investigate which platforms are best positioned to fuel the next wave of Smart Home solutions. We also investigate how developers can break free of devices, morph smart home tech to fit tomorrow’s smart office, and move beyond the Smart Home’s walls into Smart Life applications to create tomorrow’s killer apps.