Despite pressure of cost-of-living, Australians still want to invest in smart home technologies, with 7.6 million households adopting at least one smart home product.
According to a recent Telsyte Australian Smart Home Market Study, there are around 24 connected devices per home.
It found the smart home market in Australia is set to reach $2.5 billion in revenue, which has been driven by demand for energy efficiency, security, price increases, and generative AI anticipation.
With more electrical devices arriving on the market with computer “smarts,” Australians have more of a choice when it comes to making their home smart, but most are still balancing this with costs.
48% of invested adopters (those who purchase 5 or more types of smart home devices), have said the current offerings are not yet “smart enough.”
The research found that last year, the cost of living pressures outweighed benefits of a smart home, with 59% of consumers falling under increasing financial pressure.
The overall trend however, is that cost of living pressures won’t stop consumers from transitioning to smarter homes, and almost a third of households now have five or more smart devices.
Air conditioners, washing machines, and refrigerators have taken the lead among appliances consumers see as ‘smart.’
Research found 18% of households have a vacuum robot, and iRobot is still the leading brand despite increased competition.
Energy prices rising also added pressure to budgets, with 74% of households seeing electricity bills increasing.
Additionally, the study found 28% of households plan to reduce their environmental impact with smart energy solutions, with more considering smart batteries for a complete solar solution. 61% of solar owners are also interested in joining a Virtual Power Plan (VPP) program.
High fuel prices are causing new car buyers to choose EVs, with Tesla leading in sales.
Telsyte believes demand for home EV chargers will rise with continued shortages in public spaces.
The last year has seen a rise in generative AI and services like ChatGPT. The study found device product marketing is shifting from ‘connected home’ to AI-enabled smart living.
Telsyte Managing Director, Foad Fadaghi said, “Australians will increasingly look for AI-powered smart living solutions that offer convenience, personalisation, and enhanced functionality.”
60% of consumers believe AI can manage a smart home better than they can, and 43% are interested in a smart home with AI capabilities.
The study revealed an average of 23.8 connected devices in homes in 2023, with 16.1 non-smart devices, 7.1 smart home devices, and 0.5 modems.
The average of internet connected devices is tipped to rise by almost 10 in the next 4 years, and the average of smart home devices is tipped to grow by almost half by 2027, which results in over 353 million internet connected devices total.
The company believes the smart home market will be worth more than $5 billion by 2027, driven by smart home products like smart batteries and appliances. Smart appliances are expected to make up about a third of all appliance revenue by 2027.
AI powered smart experience is tipped to lead the next wave of smart speakers, with Google adding AI capabilities to Google Nest speakers, which have become the main smart speaker for over half of user households.
Over 120 companies, including Google, Apple, Amazon, and Samsung, use Matter as a smart home protocol, which allows devices with different communication protocols across multiple platforms to communicate with each other.
The average number of people working from home has increased, meaning the lounge room and study have become the top smart spaces in homes.
The lounge room, study and front entrance are where internet-connected devices were installed most in 2023. The gaming room is rising.
Research found over 12% of Australian homes have a dedicated workspace and another 5% of households are interested in setting up one.
16% of households claim they have seniors or members with a disability that require special assistance or care. 32% want additional help looking after these members.
37% believe they will significantly benefit from support provided by voice commands and smart assistants.
The study also found 31% of households have security surveillance systems, and self-monitored online security systems are rising.
Smart video cameras were popular in 2023 with increased availability of AI features. The market is now worth over $330 million. Subscriptions are also gaining appeal.
Smart lightbulb adoption has slowed, but is tipped to grow with more competitively priced units.
The research found that 16% of Australians remain interested in hardware subscription services.
Australians are willing to pay between $26 and $44 per month for each service. Subscription services for home automation services, utility and insurance providers are increasing.