Home Internet of Things Smart speakers make big noise in Aussie IoT market, but privacy worries persist

Privacy and security worries still abound with smart speakers, but even so, the Australian IoT home market grew 55% in 2017, reaching $583 million, with the market set to accelerate beyond 2020.

The research and analytical gurus at Telsyte have released their latest "Australian IoT@Home Market Study 2018", which found "rapid uptake in smart speakers, as well as increasing internet connectivity of appliances such as air conditioners and security cameras, is creating the foundation for an Internet-connected device explosion expected to accelerate beyond 2020".

The Telsyte research showed that "the average Australian household has 17.1 connected devices in 2018, up from 13.7 in 2017. Telsyte forecasts this number to grow to 37 by 2022 or 381 million Internet-connected devices nationally.

Most of this growth is expected to come from IoT@Home devices and associated services, which Telsyte categorises into smart energy, smart security, smart lifestyle and smart hubs – see coverage figure below.

 

Telsyte then tells us it "believes the smart lifestyle sector, which consists of whitegoods, appliances and house & garden products, will be the largest sector by 2022, as manufacturers bring to market products that have Internet connectivity as a standard feature. This contrasts with today’s market where smart appliances can command a significant premium".

Telsyte managing director Foad Fadaghi said: "Building connectivity into consumer products will allow manufacturers to develop new business models and provide intelligent services that not only change consumers’ lifestyles, but disrupt a number of traditional industries".

Telsyte's research "also shows a clear shift in where consumers start their IoT@Home journey. More consumers are now interested in enhancing their kitchen with smart speakers and smart appliances.

However, despite the potential growth of the IoT@Home market, challenges such as privacy and cyber security concerns are impacting consumer appetite. Some 41% of Australians are “more concerned about cybersecurity than last year” and 61% are concerned about their private information being exposed online, up 5% from the previous year.

Smart speaker sales boom, laying the foundation for an IoT@Home explosion

Telsyte then notes it "estimates around half a million Australian households currently own a smart speaker, up from less than 10,000 in 2016. Telsyte forecasts around three million Australian households will have a smart speaker by 2022.

"The smart speaker category was the fastest growing IoT@Home product in 2017, with Google Home and Google Home mini being the market leaders driven by holiday season sales, free giveaways with Pixel 2 smartphones, and multipack offers. Telsyte expects Apple and Amazon to catch up as their products became more widely available in 2018.

"This surge in smart speaker adoption is expected to lay the foundation for demand for other IoT@Home products. Telsyte research shows smart speaker users are twice as likely to purchase other IoT@Home products compared to non-users.

"The study also found that around 87% of smart speaker users are seeking advanced IoT@Home functions based on AI and machine learning, compared to 68% for those without smart speakers. Some examples include alerting if strangers are repeatedly appearing around the home, or air conditioners that adjust based on knowing a change in schedule through access to an online calendar.

"The most important factor for consumers purchasing IoT@Home products are that they are easy to use or 'just work'. This includes being easy to set up, and not requiring active human monitoring."

Google sets the pace, but Apple users present an untapped opportunity

Despite Google’s early lead in the smart speaker market, Telsyte believes "Apple’s loyal users base presents strong opportunities for third-party manufactures".

"At the end of 2017, Telsyte estimated there were 2.2 million Australians who use five or more Apple products and services compared to 1.2 million using Google products (using a similar methodology)."

Telsyte senior analyst Alvin Lee concluded: “The lock-in and ripple effects of Apple’s ecosystem amongst Australian families are too big for IoT@Home manufacturers to ignore."

 

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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

 

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