The cost of setting up a smart home with Internet of Things (IoT) devices is an expensive endeavor, even with recent increased adoption among consumers. Average selling prices for basic IoT devices are steep; in North America, smart thermostats cost about $220, smart lighting networks cost $103, security-home management systems cost $300, and smart plugs cost about $53, according to Navigant Research’s Market Data: Internet of Things for Residential Customers report. These devices are expensive on an individual basis compared to their dumb counterparts, let alone when purchased together as a connected home bundle.
However, there is recent evidence of increasing affordability, as seen from the launch of the new ecobee3 lite smart thermostat. The company has ditched room sensor support and dropped $80 from the price tag of its flagship product. This makes ecobee’s newest offering a more affordable option compared to those from competitors such as Nest, which sells its smart thermostat for $249, and Honeywell’s second generation Lyric thermostat, which runs $199. This recent trend of undercutting the competition on price is not exclusive to the smart thermostat market. Google recently announced that its Home offering, a voice-activated Wi-Fi speaker hub, will be released to the market at a price $50 cheaper than Amazon’s Echo.
Competition Breeds Accessibility
Undercutting competing smart devices may not be the case across the board, as Google also recently announced its Pixel smartphone at a price equivalent to the new iPhone 7 from Apple, surprising industry specialists who expected the Pixel to be priced lower than both Apple and Samsung offerings. Nonetheless, the decline in prices of connected home hardware is expected to perpetuate as industry players try to grasp hold of market share and become leaders in this space. This level of competition is making the smart home concept more accessible and affordable to consumers. Price cuts are pushing the market that much closer to a mainstream reality instead of a futuristic dream.
What this means for the energy industry is increased adoption of energy management devices and greater engagement among consumers. Devices such as smart thermostats are increasingly being bundled as connected home solutions, and as these solutions become more affordable and mainstream, energy management is expected to see increased uptake. Consumers are now finding energy management devices available through connected home solutions framed as security, entertainment, automation, or telecommunications offerings. Utilities can take advantage of this shift in the market by partnering with vendors incorporating energy devices into their connected home solutions, and by using these devices to better engage customers with energy efficiency and demand response programs.
See Navigant Research’s recently published Market Data: Home Energy Management report for more information on the nexus of energy management and the connected home.
Tags: Energy Management Devices, Internet of Things, Residential Energy Innovations, Smart Home, Utility Transformations
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