1. What is  Smart Home

 

Smart Homes use electronic networking technology to integrate the various devices and appliances found in almost all homes, plus building environment systems more common in factories and offices, so that an entire home can be controlled centrally – or remotely – as a single machine.

1.1 Key benefits

remote access– ‘Being able to control devices in the home when I was out would be really useful to me’

safety and security– ‘I would really value the safety and security features a Smart Home could offer’

centralised control– ‘I like the idea of one remote control that could control everything in the home’

convenience– ‘A Smart Home appeals to me because it would save me time and effort’

However, these benefits can only be realised if the technology becomes affordable and accessible to those who most need it. This is only likely if a broader consumer market develops – thus pushing down prices and increasing availability.

2. The market potential of Smart home

In a large context, there are 3 major aspects of markets we should consider , which would tremendously affect the future development of smart home market.

2.1 Market Supply

There remains a general lack of enthusiasm on the part of construction and property industries, manufacturers and suppliers to push – or even properly promote – this technology. The lack of common standards, an inappropriately skilled workforce and concerns that ‘it’s just a fad’ has limited its development in the past years.

There are, though, changes on the horizon that could stimulate more activity from potential suppliers:

Scale economies from the American market.

The growing use of Smart Home technology in the USA could deliver the economies of scale necessary to reduce average costs and, hence, prices.

Although it may take time to feed through, this could reduce prices here.

New technologies.

There are up-coming technologies that will add to the functionality, ease of use and convenience of Smart Home systems, while improving their cost-effectiveness. Moreover, the development of new communications technologies – such as ‘Bluetooth’, ‘Zigbee’, ‘WIFI ‘and the ‘XML’ language – offer the not-too-distant prospect of common standards for

electronic dialogue between Smart Home devices .

Interest from the consumer electronics industry.

With an ever increasing range of home and personal electronic gadgets available, many major corporations in the consumer electronics industry consider the user-friendly integration and combined control of multiple devices as crucial to their future success. As such, the addition of Smart Home devices and functionality to home entertainment systems is a realistic medium-term prospect.


2.2 Market Demand
2.2.1  Consumer’s attitudes towards smart home

The survey of consumers’ attitudes indicates that there is underlying public interest in Smart Home technology that could be unleashed if the market develops – and prices fall –appropriately.

•”The interested”– those interested in living in a Smart Home (45 per cent of respondents). Most likely to be: people aged 15–34; family households; those with pay TV and home entertainment systems (i.e. DVDs and video games consoles); those with PCs and/or Internet access; those on higher incomes; those who hold positive attitudes about new technology.

• “The ambivalent”– those who were neither interested nor uninterested in the idea (19 per cent). These respondents were well represented across all groups in the population, though marginally more likely to be older and on medium/low incomes.

• “The uninterested” – those not interested in living in a Smart Home (37 per cent). Most likely to be: aged 55 and over; households without children; households without PCs, pay TV or home entertainment systems; those who hold negative attitudes towards new technology. The results also indicate what characteristics attract interest in Smart Homes.

2.2.2 What are the most demanding features in smart home

In addition, the Smart Home appealed to a broader range of consumers because of its potential safety and security benefits. The high level of interest in the safety and security features suggests this might be a powerful driver to attract less technology-literate purchasers into the Smart Home market. The benefits of remote control also had wide appeal.

 

remote access– ‘Being able to control devices in the home when I was out would be really useful to me’

safety and security– ‘I would really value the safety and security features a Smart Home could offer’

centralised control– ‘I like the idea of one remote control that could control everything in the home’

convenience– ‘A Smart Home appeals to me because it would save me time and effort’

Of the four features, security and safety aspects were the most popular with over twothirds (70 per cent) agreeing with the statement ‘I would really value the safety and security aspects a smart could offer’ (Figure 4). The benefits of remote access also had wide appeal.

2.2.3  What are the concerns for the smart home

Concerns about Smart Homes

Three specific areas of concern were tested out with respondents:

system failure – ‘I would be concerned about technical hitches and things going wrong’

lack of control – ‘I would worry about the system being difficult to override’

complexity– ‘I would worry that the system would be too complex’.

People were most concerned about the system failing and around two-thirds (65 percent) agreed with the statement ‘I would be concerned about technical hitches and things going wrong’  Around half (51 per cent) were worried that the system would be too complex and a similar number (55 per cent) said they would worry about the system being difficult to override.

2.3 Government policy and social factors
2.3.1 Green issue and global warming

Green issues and global warming concerns are bringing a new focus to energy conservation to reduce CO2 emission and energy consumption. And with the development of more structured ways to assess green building techniques. For example, the LEED (Leadership in Energy and Environmental Design) program for green building certification run by the U.S. Green Building Council, contractors and real estate developers in the U.S. will have more incentive for implementing these technologies.

2.3.2 Economic crisis

The economic situation will brutally force the industry to focus on existing buildings and on the efficiency, operating costs and the prudent use of technology to improve the operation of those buildings, resulting in higher performing buildings. Innovative approaches that have yet to be widely adopted will become the norm, and existing companies will give way to innovative startup companies by the time the recession ends and the recovery is in place. Integrated building systems and smart buildings will be one of the trends to benefit.

History informs us, any economic crisis is also a tremendous opportunity for a new emerging market to take up, bringing more focus on the innovation.

3. Speed of take-up of new technology

Although every new innovation is unique and its adoption by consumers different, there are lessons that can be learnt from looking at how quickly other technologies managed to reach a mass market, and what factors influenced the pace.

Figure 1 Adoption of new technologies over time

Figure 1 demonstrates how ownership of different consumer technologies has changed over time. The graph illustrates that most technologies appear to follow an ‘S-curve’ pattern of technology adoption. This is characterised by slow take-up in the early years, followed a more rapid increase in adoption which moves the product into the mass market arena. Finally, as the market matures and takeup slows, the gradient of the S-curve become more shallow as it approaches a maximum level of market penetration (or ‘saturation’).

4. Conclusion:

In combination, The technologies are now well prepared for the smart home, however the standards might be not so clear for a initial market. These – and other – upcoming technologies will add to the functionality, ease of use and convenience of Smart Home systems, while potentially improving their cost-effectiveness.

In a large context, public opinion and governmental policies towards green issue and global  warming will be key to getting developers to invest in integrated building systems, smart home, as a part of internet of things, could be the first few market to take up.

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