Research firm Telsyte is forecasting that annual Australian household spending on IoT home products and services will reach $3.2b in 2019, an eleven-fold increase from $289m in 2015, and that does not include personal IoT devices and services like Fitbits.
There are about 10 million households in Australia today and the ABS estimates there will be maybe another million by 2019, so Telsyte’s projection mean average household spending on IoT devices and services today is about $29 and will be close to $300 by 2019.
However much of this spending won’t be by choice and may or may not involve the household partaking of IoT services. According to Telsyte, a huge range of traditional domestic applications will come with sensors and connectivity built in. It estimates that, by 2019, the average Australian household will have 24 Internet connected devices, up from nine in 2015.
Consumers will by IoT by default
Telsyte senior analyst Steven Noble says: “While long mooted, the Internet-enabled ‘whitegoods’ will finally become the norm, as most manufacturers — aided by the lower cost of micro-processing — build wireless Internet connectivity into most of their products,”. Consumers will find themselves buying IoT-enabled devices by default.”
So if you buy a new washing machine or fridge in 2019, you’ll be contributing to that $3.9b spending on household IoT.
In support of this argument Telsyte points out that Samsung has committed to connecting 90 percent of its new products to the Internet by 2017 and all of them by 2020.
And, says Noble, Australian manufacturer Breville has also commited to IoT-enabling many of its products. “Breville recently hired a new CEO and part of the mandate the board gave that CEO was to reconfigure the company for the Internet of Things. So that might provide a local case study of how a manufacturer can go about repositioning its products for this space.”
Today the domestic IoT market is in its infancy with few mainstream IoT enabled products available, says Noble. “The market today is not dominated by appliances, it’s dominated by specialist things purchased by people who have an awareness of smart homes and who go down to Dick Smiths and buy a smart home hub.”
Here comes the Trojan Horse hub
As the domestic IoT industry matures, Noble says these dedicated devices will largely be supplanted by hub functionality built into mainstream products. “We call these ‘Trojan Horse hubs’. They will connect all your appliances to each other and to you via your phone etc. In our research people predominantly said they want to control things from their phone or their computer, but a laptop and phone won’t be in the house 24 hours a day So what people will need will be a smart home hub that is on 24 hours a day.
“They will go and buy an Apple TV or a games console and discover it incorporates a simple hub. There is a new apple TV coming out soon that will have a simple home hub built in that will allow you to control devices from your TV or your phone.
“The best example today would be the Google Nest controller. You buy it because you want to control your heating and cooling but you discover that it con communicate to other devices in your home and it can control them.”
Noble sees the Appel HomeKit and Google Next protocols as dominating the market for controlling IoT devices in the home, and he expects other manufacturers to support both of these.
“There is a certification program for HomeKit, Google has a Nest certification program and you would expect most devices to be certified to both of them.”