Parks Associates consumer trends from its Smart Home Dashboard research suggest we are in cooling period:

  • Adoption has leveled off for smart home device ownership
  • Video doorbells, which have seen slow but steady YoY growth for almost a decade have dropped in adoption, and other categories such as smart cameras have also seen lower adoption.
  • Prices have seen small but steady increases across many of the devices Parks Associates tracks.

Currently 45% of all households reporting ownership of one device:

  • Thermostats
  • Door Locks
  • Video Doorbells
  • Smart cameras
  • Smart Lights
  • Lighting control systems
  • Outdoor light fixtures with video camera
  • Outlets/switches/dimmers
  • Smart plugs/adapters
  • Sprinkler systems
  • Garage door openers
  • Smoke/CO detectors
  • Water leak detectors
  • Water shut off valve
  • Robotic Vacuum Cleaner
  • Smart Appliances, such as smart refrigerator, smart oven, etc.
  • Smart Home Control Hub

The number of devices in the average smart home device-owning household peaked at 8 during the pandemic era and has dropped to 6.2, due to new users. Tech enthusiasts and power users still remain important to the smart home landscape. Yet growth has occurred since the pandemic, going beyond these early tech adopters, and their needs are far different than the first-time user. While power users may look for the full home automation, integrations, and use cases that are more comprehensive such as lighting and irrigation, first-time users gravitate towards basic entry-level use cases, such as front-door security. These users may trial the smart home through a video doorbell or smart thermostat, eventually moving into Player status. When all segments are taken as a whole, this means that the average has dropped. Smart home manufacturers should not assume these segments will migrate towards Super Power User status. To increase this average, smart home companies must consider how to attract the mainstream user through ease of setup/install, features, routines, and integrations.

Key trends include:

Innovative Product Launches and Features: The smart home market remains a slow-and-steady growth category, but specific device subcategories are highly competitive, with many brands for consumers to choose from. Companies are pushing boundaries in product innovation to meet diverse consumer needs and differentiate themselves from competitors. This is especially reflected in releases for smart cameras, video doorbells, smart lighting, and robot vacuums. Some of these features can be introduced to previously released products, such Roku’s integration of security feeds into smart TVs. Beyond offering features to attract new users, they can also introduce recurring monthly revenue on a subscription basis or enhance the value and price of those subscriptions, as in the case of Ring’s new 24/7 continuous recording feature for the Stick-Up Cam and Indoor Camera and AI video search tool.

Enhanced Interoperability and Standards: The adoption of the Matter standard by various companies like Kwikset, Ecobee, and Samsung illustrates the industry's move towards creating more interconnected and user-friendly smart home ecosystems. Additionally, the release of Matter 1.4 provides real value to the consumer in device setup, interoperable device control, security, and energy management features. The onus is still on the device and software manufacturers themselves to take advantage of the benefits, but making the consumer experience better and easier will increase end user satisfaction and likely reduce returns.

Strategic Partnerships and Integrations: Partnerships are playing a crucial role in expanding market reach and enhancing product capabilities. Notable collaborations include Ashley and Samsung's connected home experience (demonstrating the use of smart home technology in context can drive customer adoption), and the team-up between OliverIQ and Centrale D’Alarme De Bromont to deliver integrated smart home solutions.

Smart Home Integrations for Health Monitoring: The integration of smart home technology with health monitoring tools is becoming increasingly prominent. Samsung and Electronic Caregiver’s development of a virtual health assistant is an example of how smart homes are evolving to include wellness and health management as core features, with special use cases such as aging-in-place or care for chronic conditions. The technology can be as simple as a sensor plugged into a wall outlet, such as Threshold’s Wi-Fi sensing plug. This trend is likely to grow as solutions for seniors and the chronically ill that live alone.

AI and Data Analytics in Smart Device Management: AI is significantly transforming how smart devices operate and interact. Google's Gemini update and Samsung’s introduction of AI features in SmartThings are examples of how AI is being leveraged to enhance device intelligence and operational efficiency. These advancements are not only improving user interaction through more intuitive interfaces but are also optimizing energy usage and system performance through smarter analytics. However, there are challenges, such as concerns about data privacy and accuracy of the AI models.

Join our team in May to learn more about the latest trends in the connected home. Parks Associates' 29th annual CONNECTIONS™: The Premier Connected Home Conference is hosted May 13-15 at Renaissance Dallas at Plano Legacy in Plano, Texas, and brings industry leaders together to provide insights and business forecasting about the adoption of technology including broadband, smart home, security, connected health, energy, and home automation.

CONNECTIONS™ provides ongoing insights throughout the year with virtual and in-person conference sessions. Parks Associates' analyst team leads the conference sessions, which are focused on technology innovations, consumer adoption and trends, product and service forecasts, and the evaluation of new business strategies, partnerships, monetization opportunities, and value-added service design.

CONNECTIONS™ is a pivotal platform for partnerships and exploring the future of technology adoption and its impact on consumers and businesses. www.connectionsus.com