The smart home represents a huge investment opportunity, Barclays has claimed.
In a note to investors, Barclays analyst Manav Patnaik said that the connected home “could represent one of the most significant investment opportunities over the next several years”.
Patnaik argued that the connected home industry could be worth more than $300 billion (£225bn) by 2020, with hardware estimated to contribute $130bn and software and advertising $170bn.
It claimed that voice control had helped to spur a new interest in the smart home, which will be the driving force behind growth in this space.
“We believe a final major driver for overall adoption rates will be the ability of consumers to save money on their electric bills,” said a spokesperson for Barclays. “We estimate that the full opportunity of converting to a smart home, with a fully electric vehicle replacing a conventional vehicle, would save consumers 46.6% on their annual energy bills, while also increasing overall household usage by 14% in our base case.”
However, despite these recommendations from Barclays, new research from the bank, as well as from comparison website MoneySuperMarket revealed that consumers still didn’t fully understand the smart home.
The latest research from Barclays Mortgages found that 22% of homeowners in 2017 claimed to have heard of smart-home technology, but didn’t really understand what it meant, compared with 33% in 2015.
Adoption among the general population was still relatively low, with just over one-in-10 homeowners (13%) currently claiming to use smart-home technology in their home.
Barclays suggested that the main reason behind this was security concerns, with 63% of UK adults expressing concerns over cyber-crime related to smart-home technologies.
MoneySuperMarket painted a slightly bleaker picture, with 76% of 2,000 Brits it surveyed admitting they were “fearful” of the smart-home concept, with unapproved data collection cited as the greatest worry.
Other concerns given included technology being hacked by criminals (51%), being made unusable by a virus (43%) and recording you without your knowledge (42%).
According to the report, the most popular gadget was a smart TV with almost a third (30%) of Brits owning one, followed by a smart energy meter at 16%.
On a more positive note, 58% of Brits said they would buy a smart device if it helped to save them money on their home insurance, according to MoneySuperMarket.
Renters who were looking to buy in the next five years said they would be interested in installing a smart security system (35%), which suggested that the future success of smart-home technology rested with manufacturers understanding the needs and concerns of the younger generation, argued Barclays.
Craig Calder, director of Barclays Mortgages, said: “Our previous 2015 Smart Home report stated that, on average, UK homeowners who would spend more would be willing to pay an extra £3,310 for a new home that comes fully equipped with the latest technology, such as smart heating systems and appliances. Some stated they are willing to spend more than £10,000 extra to own a property that is ahead of the curve. When it comes to choosing technology to invest in, homeowners are putting practicality first.”
MoneySuperMarket suggested that the benefits of investing in the smart home were likely to outweigh fears posed by consumers as convenience, security and cost-saving elements of owning a connected home could be advantageous.
MoneySuperMarket editor-in-chief Dan Plant commented: “Smart technology promises to transform our homes by enhancing security, improving energy efficiency and generally making our domestic lives smoother and more efficient. However, many people are understandably anxious that the benefits will be countered by threats, such as hacking and loss of privacy.
“It’s up to the makers of smart devices and applications to reassure consumers that they are not putting themselves at risk. And it’s also vital that any cost savings that flow from adopting connected technology, such as reduced payouts for burglary claims, are passed on to customers in the form of lower home insurance premiums.”