Report: Has Interest in the DIY Smart Home Market Waned?

Consumer interest in the smart home decreased in the first half of 2015, according to IoT research firm Argus Insights. Are we out of home automation early adopters?

A recent report from Argus Insights says that consumer demand for DIY connected home products, epitomized by the Nest thermostat, but also including wireless security cameras and lighting control systems, dropped dramatically in the first half of 2015. But that doesn’t mean that the promise of the smart home is dead-it just hasn’t arrived yet.

Argus made its home automation assessment not from random surveys or focus group questionnaires, but by monitoring consumer touchpoints such as user product reviews (on sites like Amazon) and social media mentions of key technologies.

“We’ve used our matrix to beat Wall Street estimates of things like iPhone sales every quarter for the past four years,” says John Feland, CEO of founder of Argus Insights. “I still think it [smart home] is going to be huge. What we’re seeing right now is a market in stagnation.”

Argus reports that by May 2015, interest in connected home products was 15 percent lower than where it was the same time last year, despite there being significantly more connected home products on the market, and correspondingly more information about the technology available.

Feland also suggests that wearables, such as activity trackers like Fitbit, have replaced the “connected home” in most Internet of Things (IoT) interest.

View charts from the Argus Insights report.

“For a long time smart home has either been the domain of the [DIY] enthusiasts or the folks with high income who can afford to have someone else come in and do it for them,” says Feland. “In order for it to move to the mainstream [consumer] it has to get to the point where people can do it for themselves, and it makes sense enough that they want to.”

Early adopter tech enthusiasts, he says, drove a lot of the excitement (thanks in part to a host of successful Kickstarter campaigns), but now mainstream consumers are finding that the reality of configuring and maintaining a smart home system is more work than they bargained for.

Essentially, the market is running out of early adopters.

A lot of the early enthusiasm was more over the novelty of the products than their practical use. Philips Hue lights are a good example of that, according to Feland.

“Novelty drives the first surge; utility drives the second,” says Feland.

The big buzz last year was over security cameras, he says. Dropcam was huge, and made even more news when it was acquired by Nest Labs, which had previously been acquired by Google. (The recent Nest camera has been more coolly received.) 

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