The popularity of every invention, product and idea in history can be roughly described by one shape – the product life cycle curve. The smart home as a concept and each of the products and innovations that are part of it are gradually describing their own bell curve as they mature.
The World Connected Home Markets Report is one of a significant number of industry agencies predicting that in the next two to five years, smart homes will move on from the introductory stage to the serious growth stage. This may sound like an abstract development, but it has a lot of serious real-world implications for the smart home industry.
Normalising the smart home
Like every product or idea in its introduction stage, the smart home has been seen as something exciting, futuristic, unusual and high-end. Very gradual take up by trailblazers and those with the resources to indulge in avant-garde luxuries is represented by a shallow rise on the unit sales graph. Shallow, that is, compared to what is to come.
A quick look at the history of Google Searches for 'smart home' on a graph shows this gradual, upward-curving rise in popularity clearly.
Behind the sales, searches and maths, smart homes have spent the last decade or so being normalised and popularised by sellers and the consumers who might buy them. Meanwhile, more companies have established ways to create and sell smart home tech effectively at a lower cost, competing to make the products and services involved available to more people.
This has set the stage for the industry to explode into its growth stage with sales and popularity rising at rates not seen before. This has several implications for those in the industry, as well as the professionals on the periphery, like the housing developers, architects, and interior designers Baker Stone works with.
Time is running out to get in early
Architects and developers that offer or accommodate smart tech in their practices still stand out as groundbreakers, becoming the first choice for those looking for automated homes. Small but innovative smart-friendly businesses can out-compete slower, bigger ones and win high-tech contracts ahead of them.
The same has been true of every new technology in its growth stage. It’s how, in creating Facebook, Mark Zuckerberg overcame industry heavyweights Myspace and Friendster – remember them?
As the introduction stage gives way to the growth stage though, large, weighty businesses will begin to follow where the smaller, more dynamic ones have led and the small, early entrants will grow to dominate the new space. Time is running out for small and agile SMEs to enter the space in a competition-trumping way. However, it has not run out yet.
Rapid growth now, settling later
The market is still accelerating. Worldwide business income from smart homes is forecast to increase by almost twice as much over the next year as it did over the last, according to figures from Statista. Indeed, since 2021, the global market has grown by $11.3 billion; a jump that is set to be dwarfed by a $20.5 billion increase between 2022 and 2023. This is a rapidly growing market with much space for new entrants and many rewards for those who enter successfully.
Looking beyond 2023, market growth settles down remarkably quickly, adding around £20 billion per year reliably for the next three years until the end of the assessment period. Going back to our product life cycle curve, this looks like the very definition of introduction giving way to linear growth.
Why we’re hitting the old sales cliché and saying now is the best time to get involved
Economically, those who invested in smart homes early benefited from the lack of competition and exponential growth, but they had to face the same issues as any groundbreaker. After all, it’s not called breaking new ground because it is easy. The early-days smart tech market was hard to navigate and easy to fall foul of due to bad luck and lack of specific knowledge.
Part of the reason why markets in the growth stage expand so reliably is that these problems have been sorted out. Pitfalls and unlucky incidents are much less likely to consume resources and whole companies.
That means the short stage when introduction becomes growth is the ideal point at which to enter the market. Begin now to reap maximum benefit from growth that is still accelerating and will soon take hold, while avoiding the pratfalls of an early-days introductory market. There’s still room for relatively small businesses to become established, yet they are much less likely to be damaged.
Market entry options for developers, designers and architects
For those who agree that now is a good time to get into the smart homes market, there are three options for entry.
1. The all-in option
Specialising in innovative smart homes is a great way to hit a niche in the competitive home design and construction market. A number of architecture and design companies, as well as developers like Trivselhus have done this successfully. However, it is a big leap that takes huge commitment and adaptability on the part of the company in question. More established and mainstream businesses may want to consider the other options...
2. The smart home partnership
Partnering with a smart home provision specialist is a viable option for architects, developers and interior designers alike. With careful consideration and adaptation on both sides, businesses across the home development spectrum can benefit hugely from this. If you want to explore the prospect of partnering with Baker Stone, you can book a call to discuss your position with us.
3. Train to add smart home competency
Keep it in the company and offer valuable professional development opportunities to your staff by training your employees to adapt their practice to the unique needs of the smart home. These competencies will become more and more applicable as smart homes become more mainstream. Gaining them is a choice that can be taken out in isolation or together with a partner. Again, we offer such training. As with partnerships, it is worth shopping around to find the right training provider for you. If you wish to consider Baker Stone, you can find out more here and book a call with us here.