European Consumer Confidence in Connected Home Services Grows
Good news is coming for all products related to the Connected Living market; or so we can conclude in light of some recently published data. A report by Parks Associates states that European homeowners demonstrate a high level of trust in their broadband service providers to be the ones to also offer them Connected Home services. More specifically, this study shows that 15% of homeowners from the UK, France, Germany and Spain already trust their broadband service provider for connected home products or services. This is a similar degree of confidence they have in other important channels, such as security dealers and retailers.
Moreover, Strategy Analytics predicts that by 2019 nearly 30 percent of homes in Western Europe will have some type of connected home system. They also estimate that revenues from smart devices related hardware, services and installation will reach nearly €15.46 billion. On the other hand, more than half of consumers prefer to purchase from companies specializing in a specific type of device—especially for wearable fitness, health devices and smartwatches .
There is more data that reinforces the idea that consumer confidence is growing in the Connected Living market. A KRC research found that 27% of technology enthusiasts in Germany, 24% in the US and UK, and 16% in Japan already own a connected health monitor. Asked about the features and benefits of connected healthcare devices, 69% of the current owners said peace of mind is very important, while 64% said overall life improvement is very important for them. Of the current owners, 83% reported their connected healthcare device has improved their sense of well-being.
These figures reinforce the belief that, with this degree of confidence among their customers, telcos are in an enviable position to mobilize and even lead the European Connected Home market and increasing the penetration rate of these systems . Erik Overbeeke, European Research Associate at Parks Associates is of the same opinion: “a number of smart home products are capturing the attention of the public, and telcos must integrate those ‘hero’ devices into their offerings to capitalize on their popularity”. In addition, there are also a number of factors that are helping this optimism grow, which is essential for the market to take off: “entry of formidable players such as Google, Amazon, and Apple into entertainment, content, and smart home services raises the bar for telcos, driving them to present leading-edge technologies to their customers. European telcos are uniquely qualified to surround their offerings with aggressive marketing, testing, installation, and technical support– elements required for reaching untapped markets.”
Some of the numbers we mention in this post belong to a yet emerging market, such as the European one. These same percentages grow dramatically when applied to the US market: 65% of U.S. broadband households trust the retail channel —including local and national retailers—, when purchasing a smart home product. Security dealers are the second most trusted channel with 57% of U.S. broadband households.
Of course, we are talking about big differences between two markets that differ in character from one another. Even within Europe, there are regional market differences among the individual countries that may not favor a rapid expansion.
Despite this, as we have already mentioned in this blog, the North American Connected Home market is set to become, for the European one, a test case from which to learn. Europe will benefit by imitating successful strategies that are already functioning in the much more mature market that is the US. This will help accelerate the final market takeoff in Europe, where the time is ripe and the circumstances are fast becoming right.
Other consumer trends also support the prediction that the European Connected Living market is on the verge of a breakthrough. The number of broadband households worldwide is predicted to reach 972 million by 2019, comparing to 721 million in 2014. The prevalence of high-speed connections is driving the expansion of the Internet of Things in the European connected home.
The soundness of these and other published reports, together with other factors, such as the relevance that the Connected Home Market is acquiring in some international events to which we have attended, such as the recent CES or the upcoming Mobile World Congress, show us that we are currently moving through a critical moment towards the definitive takeoff of this market.
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