2022 Trends to Watch:

Smart Home

Mariana Zamoszczyk
Principal Analyst, Smart Home Services
askananalyst@omdia.com © 2021 Omdia Brought to you by Informa Tech
“New value-added smart
home subscription
services will reinforce
the importance of the
smart home.” Mariana Zamoszczyk
Principal Analyst,
Smart Home Services

Page 2 © 2021 Omdia

 2022 Trends to Watch: Smart Home | October 2021

Contents

• Omdia view
• Key messages
• Recommendations
– Recommendations for service providers
– Recommendations for vendors

• Smart home vendors will push a greener agenda to win differentiation

• The convergence of physical and cybersecurity will be key for modern homes
• Elder care subscription services will gain importance among consumers
• Appendix

Page 3 © 2021 Omdia

Information Classification: General
 2022 Trends to Watch: Smart Home | October 2021

Omdia view: The smartest homes will The impact of COVID-19 on the global smart home market
has been minimal

be restricted to those willing to pay for

subscription services 248.5m
• While smart home penetration rates accelerate, key smart home vendors Global smart home
such as Amazon and Google are focusing more on the development of new households by 2022
subscription services designed to tie their respective smart home products to
new monthly revenue streams.
• Meanwhile, the increasing sophistication of cybersecurity threats at home is
pushing service providers to work more on the integration between home
security and network security to improve the smart home experience,
creating a more differentiated digital portfolio for the home as a result. 25.7%
• Omdia believes that the launch of new value-added smart home subscription Global smart home
services will strengthen the importance of the smart home but will also penetration rate in 2022
promote new levels of customer captivity. This means full access to advanced
smart home functionality will be limited to subscribers.
• This Trends to Watch report offers strategic insight for vendors and service
providers interested in taking advantage of the upcoming market The global smart home market is projected to exceed $178.5bn
transformations that will develop in the smart home industry next year. in 2025, at a CAGR of 24.1% from 2020 to 2025

Page 4 © 2021 Omdia

Information Classification: General

Key messages
1 2
Smart home vendors will push a greener
agenda to win differentiation
The need for competitors to differentiate
will promote the development of new
energy management tools and features
designed to improve energy efficiency at
home. All vendors will have to push the
envelop in terms of innovation and
functionality but remain affordable to win
the battle for supremacy.
Page 5 © 2021 Omdia
Information Classification: General
The convergence of physical security and
cybersecurity will be key for modern
homes
The need to ensure consumers are better
prepared to handle modern threats will
gain importance during 2022. As a result,
a tighter integration between home
security and network security will help
vendors and service providers to improve
the smart home experience.
2022 Trends to Watch: Smart Home | October 2021
3
Elder care subscription services will gain
importance among consumers
In 2022, consumers will increase
investment in technologies designed to
help them monitor the well-being of
loved ones aging at home. The
development of new AI-enabled elder
care subscription services will significantly
boost the market potential of assisted
living.

Key recommendations
Service providers
• Expand the smart home energy product portfolio. Offer customers
choice in terms of brands. Partner with renowned smart home energy
device manufacturers offering advanced energy management
functionality via products and services. Develop attractive bundle deals
with installation services.
• Develop attractive cyber-physical home security bundles. Partner with
trusted cyber and physical security providers with a track record in the
smart home space. Promote differentiated cybersecurity services for
smart home devices, going beyond traditional solutions that focus on
smartphones, laptops, and tablets.
• Look at elder care as a key element of the smart home. Partner with
trusted device makers and healthcare service providers, while taking
advantage of existing relationships in the B2B segment to create
compelling services for consumers. Adopt a consultative sales
approach, offering demos and expert advice for buyers and users.
Page 6 © 2021 Omdia
Information Classification: General
2022 Trends to Watch: Smart Home | October 2021
Vendors
• Develop a far-reaching energy management strategy. Expand beyond
smart thermostats, helping customers to monitor energy usage and
potential heating/cooling problems, while saving power across a wide
range of smart home devices. Also, design an attractive entry-level
product proposition with access to free basic functionality as well as
premium subscription services.
• Create an integrated cyber-physical security proposition for whole-
home protection. Cover the entire spectrum of cyber-physical risks at
home via multiple network and physical security devices and services.
Promote a unified mobile app approach, offering all network and
physical security features in one single app.
• Leverage the alert capabilities of smart home devices and voice
assistants for elder care. Develop multiple use case scenarios but
highlight existing product limitations to clearly set customer
expectations.
Smart home vendors
will push a greener
agenda to win
differentiation

Page 7 © 2021 Omdia

 2022 Trends to Watch: Smart Home | October 2021

Offering proactive energy efficiency monitoring will be key to

standing out in the smart home energy market
• Consumers are increasingly seeking new ways to make their homes more
energy efficient, especially if it helps them to cut down on their heating
and electricity bills. With the price of gas and electricity on the rise,
solutions such as smart thermostats and lights have gained a key role at
home as they help reduce energy usage. Omdia estimates that more than
360 million households worldwide will use these smart solutions by 2022.
• Amazon’s decision to enter the smart thermostat market to compete with
Google will heat up the competitive landscape. The new Amazon Smart
Thermostat is affordable at $60, but not self-learning as Google Nest
thermostats, relying instead on Alexa Hunches to control the heating
whether the user is at home or not. Amazon’s success in this market will
depend on its ability to develop a robust smart energy proposition and
provide real energy savings, while competing with Google’s Nest Renew
program for clean energy.
• In 2022, Omdia expects the need for competitors to stand out will promote
the development of new energy management tools designed to improve
energy efficiency at home via free functionality (i.e., Nest HVAC
monitoring)/subscription services (i.e., Nest Renew Premium, Hive Heating Air condi oners ans linds shades Air uality
Plus). The next step in market evolution will be to create a more holistic Radiator valves hermostats igh ng lugs switches
ource mdia mdia
approach to smart home energy, instead of focusing on smart thermostats.

Page 8 © 2021 Omdia

Information Classification: General

Smart thermostat vendors will need to push the envelop in terms of
innovation and functionality, but remain affordable to win the battle
Player What will the impact be?
type
Service Smart energy is a popular use case among proactive telcos in
providers the smart home space. 79% currently offer solutions such as
smart thermostats and smart plugs as part of their smart
home product portfolio. However, advances in product and
service functionality won’t have any significant impact for
service providers as resell margins remain low.
Vendors The high costs of products and services will remain a major
challenge for market growth. Furthermore, the competitive
pressure will intensify, making it harder for companies to win
differentiation. Offering energy-tracking capabilities in
addition to potential savings won’t be enough to stand out in
the crowded market. Vendors’ pledge to climate change and
ability to work with energy companies to promote the use of
clean energy will also be important to attract customers.
Page 9 © 2021 Omdia
Information Classification: General
2022 Trends to Watch: Smart Home | October 2021
Impact rating How should players respond?
Expand the smart energy product portfolio beyond smart
thermostats, plugs, and lights, including other popular
solutions such as air purifiers and radiator valves. Offer
customers choice in terms of brands, partnering with vendors
offering advanced energy management functionality. Develop
attractive bundle deals with installation services.
Develop a far-reaching approach to energy management,
helping customers to monitor energy usage and save power
across a wide range of smart home devices, not just smart
thermostats. Create an attractive entry-level product
proposition and make access to free basic functionality
worthwhile to reduce entry barriers. Promote commercial and
contractual flexibility for premium subscription services.
The convergence of physical
and cybersecurity will be key
for modern homes

Page 10 © 2021 Omdia

 2022 Trends to Watch: Smart Home | October 2021

Physical and cybersecurity at home must converge to better mitigate

hybrid threats
• Increasingly, consumers are facing physical and digital threats at home. As Q: Which of the following smart home services do you currently use
a result, home security services have become a key investment driver for and pay a monthly subscription fee for?
the smart home, according to mdia’s Digital Consumer Insights 2020:
Smart Home survey. 24/7 professional security and video storage currently
24/7 professional home security monitoring
lead in terms of investment, but consumers have also placed more value services (e.g., ADT)
16% 36% 48%
on cybersecurity as the threat of being targeted by hackers intensifies.
Home security camera recording and storage
• Few telcos with physical and cybersecurity smart home propositions are
subscription services (e.g., Nest Aware, Ring 15% 34% 51%
currently going to market with a unified offering (i.e., Xfinity Home with Protect Plans)
Advanced Security). This disconnection is present even when being a
broadband customer is a prerequisite for smart home services. Cybersecurity for all connected devices 14% 44% 41%
• Amazon has recently launched the Ring Alarm Pro, a home security system
with an Eero Wi-Fi 6 mesh router built in that provides physical home Home insurance tied to use of smart devices (e.g.,
14% 40% 46%
security as well as whole-home Wi-Fi and network security. More vendors water leak detector, smoke alarm)
in the smart home industry are expected to follow this approach next year.
Premium technical support service (e.g. technical
• Omdia believes physical and cybersecurity can no longer operate in silos. In support service for all connected devices)
12% 38% 49%
2022, the need to ensure consumers are better prepared to handle
modern threats will accentuate, pushing all market participants to rethink
Already have Don't use but would be interested Don't use and am not interested
their current strategies for the smart home and create a more unified
approach. n=12,226
Source: Omdia © 2021 Omdia

Page 11 © 2021 Omdia

Information Classification: General

Tighter integration between home security and network security will
help improve the smart home experience
Player What will the impact be?
type
Service Many broadband service providers have developed their
providers cybersecurity capabilities over the past few years, but more
focus is needed on consumer IoT devices. Investment in this
area will help telcos have better visibility of all devices at
home. When combined with self-monitoring and
professional security services, this approach will enable
telcos to meet current security demands and offer a more
comprehensive whole-home security proposition.
Vendors Many companies in the residential security market have
focused on safeguarding the home from physical threats, not
paying enough attention to cybersecurity. Omdia expects
this to change during 2022 as more smart home vendors
introduce new hybrid cyber-physical security solutions for
the home.
Page 12 © 2021 Omdia
Information Classification: General
2022 Trends to Watch: Smart Home | October 2021
Impact rating How should players respond?
Partner with cybersecurity solution providers that have a track
record in the smart home space. Promote differentiated
cybersecurity services for smart home devices, going beyond
traditional solutions that focus on smartphones, laptops, and
tablets. Develop attractive cyber-physical home security
bundles. Via customer education, help users understand the
value of cybersecurity.
Develop an integrated digital-physical home security product
proposition. Focus on whole-home protection, covering the
entire spectrum of cyber-physical risks at home. Create a
unified mobile app approach, offering all network and physical
security features in one single app. Also, include on-device
storage capabilities (SD card) for backups as an extra security
layer.
Elder care subscription
services will gain
importance among
consumers

Page 13 © 2021 Omdia

 2022 Trends to Watch: Smart Home | October 2021

Consumers will prioritize investment in technologies that can help

them monitor the well-being of loved ones aging at home
• As health-consciousness intensifies, consumers want smart home devices
to help them when they need it the most. According to mdia’s Digital
Consumer Insights 2020: Smart Home survey, 49% of consumers are
interested in smart solutions designed to monitor health emergencies,
while 48% want solutions to monitor the well-being of a family member.
• Similarly, many consumers value the support of AI assistants when there is
an emergency. At present, 47% of consumers want AI assistants to provide
emergency support (e.g., calling an ambulance), while 31% would like AI
assistants to monitor their health/fitness and provide advice.
• Amazon has begun to capitalize on this trend in the US market with the
new Alexa Together elder care subscription service ($20 a month) that
combines Amazon’s existing device portfolio with enhanced Alexa services
to provide support for aging family members living independently. The
service includes hands-free 24/7 access to a professional emergency
helpline and other alerts and monitoring tools for relatives and caregivers.
evice that evice that evice that evices to ompanionship evice that evice that helps
• In 2022, consumers will increase investment in smart devices and monitors your monitors monitors your monitor loca on devices e.g., monitors a you monitor
level of tness sleep helps you health and alerts or well being of a robo c animals speci c medical medica on
subscription services that can alert them in case of an emergency and help ac vity sleep be er for emergencies family member condi on e.g.,
them monitor the well-being of loved ones. Omdia expects consumers to e.g., heart diabetes
a ack
focus on easy-to-use solutions with varied functionality such as smart n , Already have on t have but would be interested
speakers/displays, rather than single-use solutions for elderly care. ource mdia mdia

Page 14 © 2021 Omdia

Information Classification: General

New AI-enabled elder care subscription services will boost the
market potential of assisted living
Player What will the impact be?
type
Service Assisted living is a niche market that has been hard to crack.
providers Only 14% of telcos currently offer emergency response
services for seniors and disabled people as part of their
smart home portfolio. However, growing consumer interest
will have a positive impact, especially for proactive telcos
offering services directly or via partnerships with specialized
healthcare providers. Moreover, competition from large OTT
players is expected to remain limited to the US market.
Vendors Increasing health-consciousness among consumers and the
threats COVID-19 poses on older generations will promote
the adoption of more advanced elder care solutions. Those
vendors that have the capacity to integrate multiple device
functionality, instead of promoting single-use products such
as panic buttons, will be better positioned to take advantage
of this trend.
Page 15 © 2021 Omdia
Information Classification: General
2022 Trends to Watch: Smart Home | October 2021
Impact rating How should players respond?
Look at assisted living as an integral part of the smart home
proposition. Partner with trusted device makers and healthcare
service providers. Also, take advantage of the unique role of
telcos in the delivery of GPS tracking services. Adopt a
consultative sales approach, offering demos and expert advice
for buyers and users. Provide full product details and
specifications, focusing on sensitive device features such as
battery life and service reach.
Draw attention to the emergency alert capabilities of smart
home devices and voice assistants. Develop multiple use case
scenarios but highlight existing product limitations to clearly
set customer expectations. Mitigate all potential product
vulnerabilities and promote data transparency from the start.
Appendix

Page 16 © 2021 Omdia

 2022 Trends to Watch: Smart Home | October 2021

Appendix

Methodology
This report is based on Omdia data, forecasts, surveys, and research reports about the smart home market and on input from the industry and general media.

Further reading
Smart Home Broadband Service Provider Benchmark: 2021 (September 2021)
Smart Home Device Penetration Report – 2021 (September 2021)
Digital Consumer Insights 2020: Smart Home (March 2021)

Author
Mariana Zamoszczyk, Principal Analyst, Smart Home Services
askananalyst@omdia.com

Omdia Consulting
We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, mdia’s consulting team may be able to help you. For more
information about mdia’s consulting capabilities, please contact us directly at consulting@omdia.com.

Citation Policy
Request external citation and usage of Omdia research and data via citations@omdia.com.

Page 17 © 2021 Omdia

Information Classification: General
Disclaimer

he mdia research, data and information referenced herein the “ mdia Materials” are the copyrighted property of
Informa ech and its subsidiaries or affiliates together “Informa ech” or its third party data providers and represent data,
research, opinions, or viewpoints published by Informa Tech, and are not representations of fact.

The Omdia Materials reflect information and opinions from the original publication date and not from the date of this
document. The information and opinions expressed in the Omdia Materials are subject to change without notice and
Informa Tech does not have any duty or responsibility to update the Omdia Materials or this publication as a result.

mdia Materials are delivered on an “as-is” and “as-available” basis. No representation or warranty, express or implied, is
made as to the fairness, accuracy, completeness, or correctness of the information, opinions, and conclusions contained in
Omdia Materials.

To the maximum extent permitted by law, Informa Tech and its affiliates, officers, directors, employees, agents, and third
party data providers disclaim any liability (including, without limitation, any liability arising from fault or negligence) as to
the accuracy or completeness or use of the Omdia Materials. Informa Tech will not, under any circumstance whatsoever, be
liable for any trading, investment, commercial, or other decisions based on or made in reliance of the Omdia Materials.

Get in touch
Americas
E: customersuccess@omdia.com
08:00 – 18:00 GMT -5

Europe, Middle East & Africa

E: customersuccess@omdia.com
8:00 – 18:00 GMT

Asia Pacific
E: customersuccess@omdia.com
08:00 – 18:00 GMT + 8 © 2021 Omdia Brought to you by Informa Tech
DISCOVER THE
LIGHT READING
NETWORK
Light Reading is an independent B2B digital media platform
providing daily news, analysis and insight for the global
communications networking and services industry. Our broad
readership and solid reputation make us the leading resource
for telecom, mobile and cable network operators; cloud services
players; and all the companies that develop and supply them with
technology, applications and professional services.

VISIT LIGHT READING

Want to stay up-to-date with the

latest, breaking telco news?
Receive all the latest, breaking telco news, direct to SIGN UP
your inbox with the Light Reading Newsletter. Get FOR THE
telecom, cable and media news, webinars, podcasts, LIGHT READING
interviews and more direct to your inbox every NEWSLETTER
business day, with the Light Reading Newsletter.
Sign up for free now

Telecoms.com is a news and analysis website

dedicated to covering all the breaking
SIGN UP
developments in the telecoms industry, with a
focus on the key business and technology issues FOR THE
facing the industry today. TELECOMS.COM
NEWSLETTER
We provide daily news, in-depth analysis, and
expert commentary across a comprehensive
range of hot topics, including Digital
Transformation, 5G, Broadband, AI, IoT,
virtualization, Security, VR/AR and much more.

Our impartial investigation of the global industry
is supplemented by regular in-depth features,
executive interviews, and opinion pieces.
DISCOVER TELECOMS.COM
Receive our Editor’s top picks for
the latest news, opinion and
analysis in the world of Telecoms
Never have to look for Telecoms news again.
We will bring it directly to you with the
Telecoms.com newsletter. Sign up is fast and
free, and gets you access to all the latest
content every day.