Being connected is the norm not only for consumers but in the meantime for devices as well. Connectivity has become an integral part of the everyday life. With smart features growing in popularity there is increasing opportunity for voice controlled user interfaces based on big data and artificial intelligence. Through expanding its presence, the AI might become the missing dot within the smart home.

In the past, smart was offered as an overarching promise to turn everything in people’s homes smart. While the ‘smart’ promise in general resonated well with consumers, currently all indicates that well-crafted individual smart solutions are the way to commercialize it. Manufacturers of security cams or LED lamps first leveraged that trend and came up with handy to use, smartphone-controlled products.

APAC consumers are taking the lead in connectivity

Being smart and connected has found its place in both small and major home appliances and contributes to their increasing value turnover. The APAC consumers, are taking the lead in connectivity. Digitization is treated as a priority and consumers are openly taking on connectivity and integrated digital solutions. In the first half of 2018, China alone accounted for nearly 50 percent of all smart appliances sold, with growth rates still around 30 percent. In APAC, 23 percent of revenues came from smart appliances compared to only 10 percent in Western and Eastern Europe. Concrete use cases of smart home appliances are vacuum cleaner robots (more than +100%) and air cleaners.

Smart TVs have conquered the living room

Smart TVs have conquered the living room (85 percent value share in the first half of 2018), spurred by the on-demand revolution. Streaming music services also rely heavily on the connectivity and multi room devices (+11 percent Jan-Jun 2018), which allow to play different songs in different rooms are enriching the home entertainment experience.

Embedded AI assistants further facilitate the control of the devices and contain the huge promise to become the smart home hub and consolidate all smart devices on one platform. One of the previous barriers for smart technology in turning our homes really smart was fragmentation of the user interface. Each smart device was only compatible with other smart devices within the manufacturer’s dedicated web or smartphone app. Arguably, whether voice or display-controlled, AI assistants show a potential to consolidate all smart devices on one platform. Once a system is set up this way, AI would be able to create a common language between these devices without being hindered through network standards, protocols or proprietary systems. By creating a suite of home applications on this basis, the concept of smart home could become an even stronger commercial opportunity.

This blog has been written by the Strategic Insights team.

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