Holiday Gifting to Impact the Smart Home Technology Ecosystem

Amazon Alexa and Google Assistant smart home devices have become great Christmas gifts since smart home devices were first introduced in 2014. This year, reduced pricing and starter smart home bundles will again draw millions of dollars in consumer spending. But these devices also help determine the kind of smart homes that will be built around them. Global tech market advisory firm, ABI Research finds that holiday spending will help convert over 128 million additional homes into smart homes by the end of 2020 and the impact of those devices will go even further. The connectivity embedded in voice control front end devices will, for millions of homes, determine the connectivity they will look for in devices such as door locks, lights, sensors, key fobs, wireless security cameras, and more as they build out integrated smart home systems.

For smart home device and service providers investing in embedding wireless connectivity in their offerings, the continuing competing and disparate landscape for smart home protocols remains an expensive and constricting block on smart home investment and ROI. With no clear standard and no interoperability between major smart home protocols means that each new smart home is a battleground for each connectivity protocol to gain a foothold, and, each additional device added cements a foundation that will underpin the adoption of more and more devices leveraging the same connectivity protocol/s.

Bluetooth, Z-Wave, ZigBee, Thread, Propriety, and Wi-Fi all compete to deliver connectivity in a host of smart home devices – often side-by-side in the same device. Each has features and ecosystem drivers that can appeal to specific OEMs, systems providers, and consumers requirements. So far, Amazon supports the ZigBee in one of its Alexa offerings while Google Nest leverages its own Thread protocol to communicate within the home to sensors and other devices, but both also rely on Wi-Fi and Bluetooth. For their primary functionality. However, in Asia, Bluetooth will increasingly provide connectivity from voice control front-end devices to an array of smart home sensors around the home, leveraging Bluetooth Mesh and fueling additional protocol complexity for an array of smart home sensors.

An array of new and reengineered wireless protocols will be available to players between 2020 and 2024, and a shift toward a more standardized approach is underway. Until then, chief among these protocols, in the near term, will be 802.15.4-based offerings. But, Bluetooth adoption will see strong growth from 177 million smart home devices to 418 million between 2019 and 2024. Adoption will continue to be primarily driven by the inclusion in voice control front-end devices.

The future potential for LPWA and the promise of 5G to deliver direct connectivity to appliances and high bandwidth smart home devices remains a further disruption point for connectivity in the smart home, encroaching into how Wan connectivity is delivered to devices and systems.

These findings are from ABI Research’s Smart Home Connectivity application analysis report. This report is part of the company’s Smart Home research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis on key market trends and factors for a specific technology.