Tuesday, 11 August 2015 14:55

Australian Internet of Things market growth explodes Featured

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The Internet of Things (IoT) home market is exploding across Australia, with adoption and spending on IoT home products and services forecast to grow eleven-fold over the next four years.

The latest report from technology analyst firm Telsyte puts the IoT market in Australia currently at just $289 million this year but set to soar to $3.2 billion in spending by 2019.

According to Telsyte, IoT in Australia is climbing a technology adoption s-curve like the Internet and smartphones did before it.

The analyst firm now estimates that by 2019, the average household will have 24 Internet-connected devices, up from nine this year.

Telsyte also says believes a number of factors will drive market growth including the arrival of new products and services, “but importantly the market is set to naturally evolve as Internet connectivity is baked into many existing products and services.”

Telsyte says its research indicates the IoT boom @ Home will be evolutionary at first as vendors will quickly move to integrate connectivity into existing products and services including whitegoods, gardening, security and energy management.

“While long mooted, the Internet-enabled ‘whitegood’ will finally become the norm, as most manufacturers — aided by the lower cost of micro-processing  — build wireless Internet connectivity into most of their products,” Telsyte senior analyst Steven Noble says.

“Consumers will find themselves buying IoT-enabled devices by default.”

According to Noble, staking their claim on this emerging market will be vendors from every point in the value chain, including:

•    Manufacturers: Samsung, for example, has committed to connecting 90 per cent of its new products to the Internet by 2017 and all of them by 2020. Furthermore, companies not traditionally in the technology market ranging from Ikea to Breville are starting to unveil their IoT plans.

•    Retailers: Telstra is just one of the brands that has already added a Connected Home section its local e-commerce Web sites, while Target in the US is experimenting with IoT demonstration homes in its stores. Retailers will be critical to the rise of the IoT @ home as they will expose consumers to new product experiences.

•    ISPs: For ISPs, smart home automation is an opportunity to create high-value bundles. Telsyte research shows that Australians that bundle VoIP with their broadband plans anticipate budgeting seven times as much for a smart home system, compared to broadband non-bundlers. However over the longer term, ISPs will face increasing competition from Over The Top (OTT) cloud service providers such as Google and Apple and will seek to partner with multinational service providers.

•    Cloud software providers: Services like Google’s new US$10 per month Nest camera monitoring solution will disrupt traditional smart home service providers — increasing adoption of smart home services while lowering unit prices.

•    Utilities: Utilities are expanding their product mix to include energy-saving devices and services that are controllable via the Internet.

•    Electricians and security consultants: Currently, 34 per cent of Australians prefer to have a specialist consultant install their system. While plug-and-play IoT devices and wireless smart home systems will be the norm, specialists will still play an important role in the installation of high-end equipment such as smart locks for keyless entry.

Telsyte measures the IoT @ home market as five key segments:

 

Expected market size in 2019

Smart lifestyle (appliances, gardening)

$1.2B

Smart home services (installation, management, cloud services)

$812M

Smart security (security alarms, cameras, sensors, smart locks)

$416M

Smart energy (sensors, outlets, light bulbs)

$658M

Smart hubs (dedicated hubs)

$64M

Total

$3.2B


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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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