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Exploring the Smart Home Systems Market Opportunity

The notion of a Smart Home -- where technology is a central part of enabling new digital lifestyle advances -- has been discussed for more than a decade. It appears that the concept is finally gaining traction in 2014, even within Europe.

According to the latest market study by Strategy Analytics, 11 percent of UK households will have at least one smart system by the end of this year, rising to over 27 percent of households in five years.

The number of UK households with some form of smart home system -- automated entertainment, energy, appliance, security or healthcare systems typically controlled remotely through internet technology -- will increase 43 percent on last year to 3.1 million in 2014, spending a total of £715 million.

This is forecast to double to £1.4 billion across 7.7 million UK households by 2019.

"While telecom brands are leading the drive in Europe, energy companies are dominating the early take-up of smart homes in Britain," said Bill Ablondi, director at Strategy Analytics.

Market Development Progress in the UK

British Gas re-launched its smart home thrust in late 2013 under the "Hive" brand and now has almost 100,000 subscribers. In addition, Google subsidiary Nest struck a deal to offer its stylish thermostat through nPower while E.ON is actively preparing its launch after a trial in Milton Keynes.

Smart home systems adoption will be boosted by consumer electronics companies, such as Apple and Samsung, becoming key players as they develop their strategies to evolve wireless home networks.

The big CE companies will be joined by a steady stream of single-purpose devices from various other companies -- including Belkin, Dropcam, Piper and Tado -- making it easy and affordable for people to set up at least one smart home device.


How the UK Market Compares Globally

The global market study -- conducted across the U.S., China, France, Germany, Italy Spain and the United Kingdom -- shows the UK will be well ahead of the global average (5 percent of households) in smart home adoption this year.

However, that still places the UK considerably behind the U.S.  market (17 percent). Worldwide revenues in 2014 will reach £29.3 billion, with the U.S. market accounting for around 37 percent (£10.9 billion).

In contrast, UK smart homes will spend an average £234 each on the technology, that's estimated to be less than half that of U.S. homes (£517).

Ablondi concluded "Annual revenues from smart home related hardware, services and installation fees will grow by just under 20 percent each year to nearly £70 billion worldwide in 2019 when 224 million homes, or nearly 1 in every 8.5 globally, will have at least one type of smart system installed."

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