4m Connected Homes in the UK

British Gas has attracted close to 300,000 customers to its Hive system

The number of UK households with some form of smart home system has increased 30 per cent in the past 12 months to 4m, which equates to 4 per cent of homes in the UK. Meanwhile, the average smart home will spend £256 on the technology, equating to a market size of £940m. In comparison, US homes average £541.

The figures come from Strategy Analytics, which undertook a major research project across Europe and the US into smart home take-up and behaviour, including the most popular types of smart technology.

The analysis identified six distinct consumer segments – three of which are realistic for purchasing smart home systems and services. In order of likelihood they are:

Impressers (11 per cent of the population) – these skew towards slightly younger females in higher income, connected device households. They also exhibit a big skew in interest in motion-sensing camera technology.

The second group is Millennial Males (9 per cent) – these are under 35, more likely not to have children and live in flats. Again, they show a spike in interest in motion-sensing camera technology.

The third group is Green Nesters (8 per cent) – these are married families owning multiple smartphones and tablets. They show a much greater interest in smart home technology around occupancy-sensing systems for lights and heating.

“After the initial hype, there seems to be a degree of negativity about the genuine opportunity for smart home technology, particularly around how many households are likely to use it,” said Bill Ablondi, Strategy Analytics’ director, Smart Home Strategies. “However, take-up rates are increasing very well and will continue if smart home manufacturers and marketers focus on the most viable potential customers. Of course, it’s not for everyone but nearly 30 per cent of the population are ripe for it, which is a pretty good start.

“British Gas Connected Homes is poised to reach 300,000 customers for its Hive service which is focused on energy management. We believe that home monitoring is a bigger draw if priced right. Service providers could spur the market with free basic monitoring and notification services bundled with their other services and then offer several levels of premium capabilities for additional fees. Insurance firms could do the same. Security service providers are well-positioned to offer self-monitoring and automation capabilities on top of their current services.”
UK consumers are most willing to pay for notifications about potential hazards and emergencies in their home (10 per cent to 11 per cent) followed by a system that can automatically shut off the water in case of a leak and remote video monitoring (both 9 per cent).

Ablondi noted also that firms such as Amazon, Apple, Google and Samsung are building awareness for smart home technologies through their various initiatives. “Technology advancements in enhanced visual and voice recognition coupled with cognitive computing on a chip will introduce new value propositions, stimulating consumer demand,” he said. “Google’s Nest will leap beyond the thermostat, smoke detector and camera to door bells and locks and virtually every control point in the home. Data analytics for predicting failure in heating systems and major appliances will become an extension of the maintenance contracts retailers, energy providers and manufacturers offer. We are on the cusp of the next big thing in consumer adoption of digital technology.”