Networked cameras are a leading smart home device category, providing peace of mind and security as part of a security system or as a standalone product. A fiercely competitive landscape provides consumers with a broad mix of product and service options. AI capabilities are becoming increasingly important and key differentiators for networked camera manufacturers. Video and audio analytics unleash powerful features. Furthermore, by offering high-value cameras to the market at a low price, networked camera manufacturers aim to drive-mass market adoption.

DRIVERS to Adoption

Self-installation (DIY) is on the rise, with companies entering the market with low cost, wireless solutions.

Networked cameras are available from online retailers, brick and mortar retailers, and security providers. Retail serves as the leading channel for smart home devices and DIY products. Networked cameras historically were only available through the security dealer channel. Retail channel expansion enables accessibility and raises awareness of these devices. Consumers continue to illustrate an affinity toward self-installing their networked camera – 71% reported doing so in 4Q 2021. Additionally, 71% of device owners purchased their networked cameras from a retailer in 2020.

The rise in single-family residential construction, second-home sales, and the shift toward greater suburban living fuels demand.

The U.S. Department of Housing and Urban Development and the Census Bureau indicate a 10.1% year-to-date increase in single-family construction. Additionally, it reports that the pace of single-family new starts in November was “the highest production rate since the spring of 2007”. The pandemic spurred massive growth in the housing market, even despite some slowdowns recently. All of these factors, paired with the trend toward de-urbanization, has fueled the demand for new video doorbells. Parks Associates research of 10,000 internet households shows that 56% of networked camera owners are first-time purchasers of the device.

A rise in crime across the US drives consumers to seek security-related solutions.

Crime, fear, and general unrest drive consumers to seek deterrence. Smart home devices such as networked cameras can serve that purpose.Parks Associates research shows consumers have a growing concern about safety.  

• 31% of internet households report General unrest has increased my anxiety about staying safe
• 27% say they are far more concerned about the physical safety of my home than I was 5 years ago

Many networked camera intenders report experiencing some form of crime or property damage to their home or belongings. This may be a driver for networked camera purchases and the desire to keep loved ones and property monitored to mitigate such incidences.

BARRIERS to Adoption

Security and privacy concerns are strong, especially for video-related smart home devices. The combination of an increased number of connected devices in the home and rising awareness of high-profile security breaches causes consumer concerns of unauthorized access. Data privacy and security rank as a leading purchase consideration among smart home device purchase intenders. Given that manufacturers’ data security and privacy claims tend to be similar, attention can be given to truly making data security and privacy a core brand attribute. In 2021, Parks Associates data shows

• 62% of consumers feel that it is impossible to keep data completely private
• Only 37% of consumers trust the companies that have access to their personal data 
• Only 26% feel that they get value in return for sharing access to their personal data

Poor product design and user experience inhibit growth. Networked camera owners still report experiencing a technical problem with their devices; on average, two problems. Poor image quality and loss of wireless connectivity are the most commonly experienced technical problems. These are further exacerbated by the lifestyle change brought on by COVID-19. Work from home and remote learning is putting a strain on home networks. An additional frustration consumers experience is in the initial set up process of the device. Given that the majority of these devices are self-installed, manufacturers will need to address installation and setup issues to improve the user experience and adoption.

Networked camera owners seek to protect multiple access points and locations of their homes. Manufacturers have succeeded in bundling multiple cameras in an offering at a discounted rate to push further adoption. Manufacturers seek to reach green-field buyers, but across the smart home market, device-owning households continue to purchase additional devices, driving growth. Companies will continue to develop and market features and use cases that benefit from multi-camera ownership.

AI will drive business value by enabling enhanced capabilities and differentiated products and services. Just as connected products will supplant non-connected models, AI has the potential to create premium solutions that will allow manufacturers to demand higher prices for hardware and services.

This is an excerpt from Parks Associates library of research. If you are in the consumer technology industry, please reach out to me or our team for a briefing so we can better understand your offering. For more information on our research, visit www.parksassociates.com
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