Will connected homes catch on? Reality doesn’t match the marketing.

Leland Teschler – Executive Editor
lteschler@wtwhmedia.com
On Twitter @DW_LeeTeschler

Many of the applications envisioned as part of the internet of things revolve around connecting everyday home appliances to the cloud. As more of this kind of connected gadgetry has come onto the market, we are getting a better idea of what an IoT-connected home looks like. Indications are the reality doesn’t match up with the marketing.

According to surveys and focus groups conducted by the research firm PriceWaterhouseCoopers (PWC), much of the motivation for installing connected devices is to get a home security system. The idea of smart thermostats and other home automation gear only resonates with consumers as a means of saving money on utility bills. The convenience aspect of such devices sounds appealing, but few consumers are willing to pay anything extra for more convenience, according to PWC’s data. That may be one reason why only about 26% of all internet users in the U.S. currently own a smart home device. Moreover, recent market projections anticipate the use of smart home devices slowly creeping up rather than growing exponentially, as optimists once believed.

It is easy to understand the reasons behind the slow growth: Working with smart home devices is a hassle. At our offices here, we have done teardowns of smart home devices such as smart LED bulbs. Our experience with them is that the commissioning process is not one most consumers would put up with.

For example, consider what’s required to get the third-generation Nest Thermostat going. Because of well-chronicled security problems, Nest added two-factor authentication to its smartphone app. Now, Nest thermostat users must open the app, go to an account security setting, activate ‘two-step verification,’ then sign in, enter a password, get a text with the verification code, tap in the code, and finally get into the app. To make matters slightly more complicated, everyone in a household can have their own separate Nest account and, of course, must be separately authenticated. All this just to set the temperature for your home.

Perhaps the complicated nature of smart home apps explains the attraction some people have for voice control – telling an Amazon Echo to turn the heat up sounds a lot simpler than punching in arduous key sequences on a smartphone. Consumer Intelligence Research Partners estimates that there are now 8.2 million Amazon Echoes in use. That would mean about 6.5% of all U.S. households have one. Research shows that the most popular use for voice controllers today is to change TV channels. Time will tell whether other uses will catch on.

It is interesting to note, however, that surveys of households already using voice controllers find that people don’t really worry about the privacy concerns. Cynics might say most conversations in their homes are boring anyway, so no one cares if an Amazon Echo overhears them.

But we suspect there might be a reason for the popularity of voice controllers that surveys don’t catch: Homeowners accustomed to having their kids and their spouse ignore what they say might see a voice control unit as a godsend. With a voice controller, finally there is something in the house that listens to them.