The trend of automating home activities by using intelligent terminals to control appliances and equipment has started gaining popularity in India. Here we consider the business opportunities and constraints.
By Sudeshna Das
Home automation is today a growing market globally, bringing new and exciting opportunities for technology companies.
According to industry experts, the market will be driven by the trend towards energy efficient, safe, luxurious and convenient homes or smart homes. According to a report published by MarketsandMarkets, ‘APAC Smart Homes Market–By Products, Services and Geography – Analysis & Forecast (2013-2020),’ the total market for smart homes in the Asia Pacific region will be worth US$9.28 billion by 2020. And this is just the tip of the iceberg.
Going forward, in the era of 4G deployments, mobile service providers will boost these figures further, taking smart home automation from being a privilege of the few rich to a truly mass scale opportunity.
Although home automation in India is still a nascent market, in sync with the global trend, the domestic home automation sector is also going to see phenomenal growth in the next few years.
A research report published by Researchbeam in February 2016, forecasts that the home automation market in India is expected to grow at a CAGR of 23.63 per cent in the coming six years.
Metro cities like Delhi, Mumbai, and Hyderabad are those with the most potential, where penetration is expected to increase further. This trend is being followed in cities like Bengaluru and Ahmedabad, too.
Growth drivers
The growth opportunities of the home automation market are due to increasing adoption of automated services, and government incentives for green initiatives.
The market will also be driven by the increasing demand for energy efficient solutions and rising security concerns. The ‘smart home’ concept has undergone a significant shift. Just a few years ago, smart homes were expensive and appealed only to early adopters of a high net worth.
However, as technology moves ahead and smart products become affordable, there is a growing interest among general consumers also.
Factors such as growing employment opportunities, steady economic development, easy availability of housing finance, increasing urbanisation, rising standards of living, and increased consumer spending on lifestyle products, are also driving the growth of home automation.
The key trends driving the adoption of smart homes can be listed under three broad categories:
Accessibility and affordability of smart homes: Rapid strides in technology made smart homes affordable to the middle class, largely due to innovations that allowed for the development of smaller and lower-cost sensors and actuators that gather information from devices in real-time. In addition to sensors and hardware, the digital home has become accessible because of the further development of inexpensive, cloud-based hub services through which those automated devices are able to communicate in a seamless manner.
This is driving a host of new digital home services such as remote monitoring, lighting and ambient temperature control, and the automated turning on/off of devices.
Rapid growth of connected consumer electronics: A new era of connectivity is rapidly becoming a reality with the development of smart technologies allowing devices to connect and talk with one another.
A large number of Internet-enabled but physically unconnected devices in India will be connected to the Web and the country could become very relevant in the M2M communications landscape in the near future.
This in turn would enable the IoT ecosystem for the connected home. As all the elements essential for creating smart homes come together, the concept of home automation is on the verge of taking off in a big way.
Increasing demand for new services in the home: Over the years, the evolving needs of home buyers have translated into a whole new set of consumer preferences and expectations from real estate developers.
What was earlier considered luxury has now become the standard. Not to forget the rise of a financially powerful consumer class that demands a standard of living and luxury at par with the western world.
The market at a glance
The home automation market in India includes but is not limited to centralised controls for lighting, security checks/locks for home access, HVAC (heating, ventilation and air conditioning) controls and others. The market can be segregated as follows:
- On the basis of application: From the applications perspective, the market is classified into segments such as lighting, safety and security, entertainment and energy management. About a year ago, the market share of safety and security applications exceeded that of entertainment applications. This is due to the rising concerns related to security among the general public. With increased consumer spending on luxury items, the adoption of HVAC and energy management services is expected to increase.
- Technology: This market is sub-divided based on the type of technology such as wired, power-line, wireless and computing networks. The wireless market is further classified into Wi-Fi, Zigbee, Z-Wave, KNX and others. Wireless technology is expected to continue driving the market in the future due to low setting-up costs. Among available wireless technologies, Zigbee, Z-wave and KNX are driving the market.
- Type of service: Based on the types of services, the market is classified into luxury, do it yourself (DIY), mainstream and managed services. As of now, the market is dominated by luxury services due to the high expense of deploying technology. Eventually, this market is expected to grow through the adoption of mainstream and managed services, due to the entry of telecom operators.
Opportunities galore
The home automation market offers exciting revenue opportunities for pure-play consumer electronics companies as well as semiconductor companies dealing with embedded automation components and kits.
However, to grow in this market, the industry must create innovative products that widen the appeal of connected home technology for the mass market.
Security is one of the critical aspects that needs to be addressed. Therefore, security solutions vendors need to develop their own high-tech products for automated home security, opening a wider market for growth and the adoption of these solutions.
Connectivity is poised to grow to such an extent that every household device and equipment will be connected through a home network. This in turn will require, on an average, around 25 to 30 connected sensors and devices linked via a home area network to the Internet as well as the service provider’s back-end systems.
Increasing demand for enhanced and round-the-clock connectivity is also paving the way for Pay TV and ISP Gateway technologies, which are expected to further propel demand for home automation products in the medium to long term.
The rapid proliferation of smart mobile devices, coupled with technological advancements, is also promoting the adoption of home automation products that are capable of operating at the push of a button.
According to industry experts, products like security cameras, video doorbells, smart plugs, HVAC controls, lighting controllers, monitoring for gas leakage, smart home entertainment systems, automated audio/video systems, as well as garage and other door/window blinds controls are in demand in the Indian market.
Besides, companies are bundling offers and offering holistic solutions to consumers, i.e., adding UPS systems, services-on-demand options, etc.
At the component level, the integration of multiple and diverse sensors for monitoring and the corresponding actuators for control, will gain importance in the home automation sector.
Advanced analytics will be required to capture sensor inputs and to drive controllers based on these inputs, as per user convenience/preferences.
Further, well-deployed smart sensors can also reduce energy wastage. Nowadays, not just homes but an entire gated community can become smart. Therefore, app based smart services for common areas like community halls, gyms, etc, are much in demand.
The hurdles to be overcome
With high-speed Wi-Fi now becoming the norm, powerful smartphones ubiquitous and a host of Internet-connectable gadgets appearing on the market, many of the obstacles to adoption have been overcome but clearly not all of them. The market still faces limitations to some extent due to the high cost of automated homes.
Research advancements in electronic devices and control equipment can further solve this problem by reducing the cost of manufacturing and of installing smart devices
However, according to industry experts, widespread adoption of home automation in India depends largely on how quickly the industry can overcome the following barriers:
- Cyber security concerns: While smart home security solutions ensure protection against physical crime, lack of protection for data could make the home more vulnerable to crime through cyberspace.
- Lack of interoperability: In the absence of common, interoperable technical standards, smart devices are not interconnected, nor can they be operated in sync with each other.
- Unreliable performance of gadgets: The smart home market in the country is still in the nascent stage and many devices malfunction too often.
However, the hope is that these problems are not insurmountable; particularly if industry players are willing to play an active role in solving them.
New trends for smart home buying
|
“Increasing affordability and awareness of home buyers as well as the advantages that home automation brings in terms of convenience, energy savings, safety/security will drive this sector in India. Moreover, the construction segment sees it as a differentiator to attract home buyers.”
Praveen Ganapathy, director, embedded processing, India sales and applications, Texas Instruments India
“The key technology trends in the Indian home automation sector will be cloud computing, the Internet of Things (IoT) and virtual/augmented reality.”
Altaf Ansari, country head (India and SAARC), Linksys.
“Less awareness about the associated costs and benefits hinders the growth of the home automation sector in India. It’s still perceived as an expensive solution that only people with deep pockets can afford. Companies need to educate and inform consumers on the ease of use and post installation services, apart from the potential for being adopted by specific age groups like senior citizens and kids.”
Thanik B, director, strategy and business development, buildings business, Schneider Electric, India
