Just How Far Did Smart Homes Take Off In 2017?

The highly successful launches of smart speakers like Amazon’s Echo and Google Home provide one harbinger of growth

By GLENN RENNER

The term the “Internet of Things” was coined in the last century (in 1999), and “connected devices” started appearing at the end of the last decade (roughly 2009). Every year since, it seems, media, analysts and experts have suggested that this was the year smart home technology would take off.

Despite the hype, the majority of our homes stayed “dumb,” and sales never met the market’s expectations. Why? For starters, expectations were always misunderstood. Second, and more importantly, a disconnect has remained between many products’ promises and their realities.

Smart homes purport to change the way we live, but the change has always been in the hands of homeowners. Until now, homeowners have remained relatively uneducated about the cost benefit of particular technologies. The most stable solutions are still wired for bandwidth or lowvoltage wiring in the home. Homeowners, as a group, balk at cost, refuse to read directions and recoil from the friction caused by the paradigm shift.

This is all about to change. At HomeSphere, we have a unique vantage point as the point of connection for homebuilders, building product manufacturers and homeowners. As we look back at 2017, we are optimistic about technology growth in 2018. The highly successful launches of smart speakers like Amazon’s Echo and Google Home provide one harbinger of growth. Forrester predicts that 22 million smart speakers will be sold in 2017, and, according to a recent Houzz study, “Once you buy one, you want to buy more.”

Parks Associates, a market research and consulting company specializing in emerging consumer technology products, agrees, citing the advent of “natural language control,” as well as “analytics-based automation,” as catalysts for the smart home market, because the two work together to simplify the user experience. As a result, “the smart home market is experiencing strong growth and is preparing the transition from early adopters to the early majority,” said Tom Kerber, director of IoT Strategy for the company, in a press release.

The industry is getting smarter, too, as companies cross the digital divide and create interconnectivity of devices. Two examples in the HomeSphere family of brands are Legrand and Nest. Legrand leveraged its long-standing expertise devising power, light and data infrastructures to create and develop On-Q®. The brand offers a complete line of enabling infrastructure, streaming multi-room audio, connected lighting control systems and home automation. All of this is supported by Legrand’s global Eliot program, which focused on IoT in the built environment.

Through a partnership with another connected home industry leader and HomeSphere partner, Nest, homebuilders can build a seamless interface that allows homeowners to control indoor temperature from anywhere through On-Q’s Intuity app or directly through the Nest app.

We’re not alone in our optimism. Research giant Gartner is also bullish on technology adoption in 2018. Its report “Top 10 Strategic Technology Trends for 2018” ranks “Intelligent Things” among the top three trends. Different than the broad Internet of Things, Intelligent Things “operate semi-autonomously or autonomously in an unsupervised environment for a set amount of time to complete a particular task.” Two great examples of this jargon-y language realized are Nest’s Learning Thermostat and Thermostat E. These products can automatically turn off lights if the Works with Nest API tells them the homeowner is away.

These developments are good news for homebuilders looking to build “green.” As industry leaders like Legrand and Nest form partnerships in the industry, builders can more easily design homes that start smart – delivering comfort and energy savings to buyers through home automation. A connected industry will also support consumer adoption. Today, almost half (45 percent) of homeowners have added one smart system or device during the course of a renovation. As the benefits of technology become more tangible and the ease of use more palatable, 2018 may be the year the industry meets its longawaited tipping point.

We also foresee a tipping point related to adopting technology to drive operations, primarily in data analysis. Our company was among the first in the industry to gather what we now call “big data” on home closings and product usage. Well before our time, we made it our life’s work to close the gap between technology and construction.

When HomeSphere launched a new solution earlier this year, we saw rapid adoption among our network of local production builders. After just a few months, more than 600 builders now use the application monthly. While the adoption reflects the application’s benefits, it also foretells changing attitudes among formerly technology-resistant builders.

The environment outside our network also indicates a willingness for the industry to use the business potential at hand. As we move into the future, we not only have the capacity to gather staggering amounts of data, but also the ability to capture, process and act on that data.

Glenn Renner is chief executive officer of HomeSphere, the country’s largest digital marketplace connecting major building product manufacturers and local builders. He can be reached at grenner@ homesphere.com.