It is driven by security solutions, smart speakers and home appliances and reached a value of €530 million in 2019, an increase of 40% compared to 2018. The growth trend is similar to that of the main European countries, but the gap to close is still large compared to countries like Germany and the UK.
According to the research of theInternet of Things Observatory of the School of Management of Politecnico di Milano, the Smart Home, that is the "intelligent house" where every device is connected to the network and interfaces with the smartphone, allowing us to monitor and manage its status even remotely, seems to be a reality in Italy, despite the gap with other countries.
"The market for smart home solutions is growing rapidly and showing more maturity today, with offerings increasingly focusing on the services and needs that connected objects can fulfill"
Angela Tumino,
Director of the Internet of Things Observatory of the Politecnico di Milano
Smart Home services stimulate the market
Many data emerge from the research that analyzes the market, sales channels, consumer preferences and technologies. Among the most interesting insights are those related to sales channels: the online and multichannel retailer turns out to be the main sales channel for connected objects for the home (47%), while the traditional supply chain (manufacturers, architects, builders, electrical material distributors and installers) maintains a relevant role (39%) but loses market share. Net the increase of telcos (10%, +140% compared to 2018) and still limited the weight of utilities and insurances (4%).
As far as companies are concerned, more and more of them are working on the launch of new services for the Smart Home: the examples are numerous and range from emergency intervention guaranteed by security companies in case of attempted infringement, to support for the reduction of energy consumption, to the automatic reordering of products whose stocks are running out, up to the possibility of improving assistance to the elderly.
Along with the market, consumer awareness and the diffusion of smart objects in homes are also growing: 68% of Italians have heard of a smart home at least once and 40% own at least one smart object, with security solutions and smart home speakers topping buyers' preferences. However, citizens' fears about cyber security risks and privacy breaches are also growing: 54% are reluctant to share their personal data (+3% compared to 2018).
A decisive push comes from the expansion of voice assistants and the landing of the top players, who now aim to extend the functionality of their smart speakers by integrating them into devices developed by third parties and supporting typical e-commerce activities, such as home deliveries and stock monitoring.
Security solutions and smart speakers dominate the market
As we said, the Italian Smart Home market grew at a fast pace in 2019, but looking at the absolute value, Italy is superior only to Spain (420 million euros, +40%), while the gap with Germany (2.5 billion euros, +38%), the United Kingdom (2.5 billion, +47%) and France (1.1 billion, +37%) remains high.
Security solutions are confirmed in first place in terms of market share, with a value of 150 million euros or 28% of spending (+15%). In second position, smart home speakers, 95 million euros or 18% of the market (+58%), which in 2019 continued to drive sales of other IoT devices for the connected home. Home appliances are also growing, worth 85 million euros and 16% of the market (+55%), of which more and more users are using smart features (35%, +10% on 2018). Immediately behind are boilers, thermostats and connected air conditioners for the management of heating and air conditioning, which benefit from the progressive integration with voice assistants, the offer of services related to maintenance and the possibility of increasing energy savings and convenience, with a total value of 65 million euros (12% of the market, +44%). They are followed by audio speakers (€50 million, 9%) and connected light bulbs (€35 million, 7%), driven by offers that include their sale together with smart home speakers.
New channels overtaking
2019 marks the overtaking of new sales channels over the traditional supply chain, which continues to lose ground in terms of market share, going from 50% in 2018 to 39% this year, penalised by a still conservative attitude on the part of installers. On the other hand, the first interesting cases of distributors who have set up real showrooms dedicated to the Smart Home, which can be used to provide training on the subject to these figures, are being reported, with manufacturers increasingly exploiting the online channel to reach the end consumer directly.
Driving the market in the last twelve months are eRetailers (150 million euros, +90%) and multichannel retailers (100 million, +39%), which, driven by sales of voice assistants, have reached a total value of 250 million euros, equal to 47% of the market.
The year just ended was also very positive for telcos, which, thanks to their efforts in terms of simplifying the offer (solutions manageable by App and monthly payments), opening up new services (such as devices to locate pets and wearables to monitor the elderly) and integrating the traditional offer with the new smart objects, grew by 140% compared to 2018, touching 50 million euros (10% of the market). Utilities and insurances, on the other hand, did not make the quantum leap that was expected last year, maintaining a marginal weight in the market (just 4% overall).
Consumer inclinations
The Smart Home is known to Italian consumers: 68% of the sample surveyed by the Observatory, in collaboration with Doxa, has heard of smart home at least once (+9% on 2018), 63% know the term home automation, with percentages that rise to 77% and 65% respectively among users under 35 years old.
The spread of smart objects in the homes of Italians is stable compared to 2018 (just over 40%), but the number of devices owned increases, with sensors for doors and windows (present in the homes of 16% of the sample), cameras (15%), speakers and audio speakers (14%) at the top, followed by video intercoms and locks (12%), heating solutions (9%), voice assistants (8%), light bulbs (8%), large appliances (7%) and boilers (6%).
The number of consumers able to install purchased smart objects themselves, without the help of a professional, is also growing (64% of respondents, +10% compared to 2018), as is the use of smart features by users (65%, +7%). The most desired features are heating solutions (23%) and large appliances (21%), followed by light bulbs (15%), cameras (15%) and boilers (12%).
Technologies with AI in the foreground
The entry of top players into the Smart Home sector has brought new use cases and new technologies. Amazon, for example, has released a new protocol with the aim of offering reduced consumption, cost and bandwidth connections over distances where Wi-Fi and Bluetooth do not guarantee coverage, to provide applications suitable for open spaces such as outdoor lighting, motion detection and pet tracking. Apple, on the other hand, plans to include an Ultra Wide Band chip within the iPhone 11, with applications in terms of access control (using the smartphone as a passkey) within the home.
"In order to accelerate the development of the Smart Home market, characterized by very different and often non-interoperable protocols, some big hi-tech players such as Amazon, Google, Apple and ZigBee Alliance have designed an open-source structure called Chip (Connected Home over IP) capable of integrating the technologies already developed and facilitating the creation of products interoperable with each other and with voice assistants " - comments Antonio Capone, Scientific Director of the Internet of Things Observatory. "Previous joint initiatives have not been as successful as hoped, but this project relies on the open-source approach and the strength of the Over-The-Top to impose itself on the market".
Artificial Intelligence is an increasingly important factor within the Smart Home ecosystem, with applications in the fields of security, elderly care and comfort. "AI enables new functionalities and new services," says Giovanni Miragliotta, Scientific Director of the Internet of Things Observatory. "In addition to smart home speakers, in which the AI component of language understanding is fundamental, there are numerous examples of application in security, with facial recognition algorithms that enhance surveillance cameras. In comfort, with solutions for the regulation of the light, sound and temperature environment based on people's habits and weather conditions. And in the assistance to the elderly and frail persons, with sensors that can collect data in various rooms of the house to understand the habits of the occupants and send alarm signals in case of abnormal behavior".
