INTERNET OF THINGS IN THE HOME

May 2018
INTRODUCTION
IOT IN THE KITCHEN
IOT IN THE BATHROOM
IOT IN THE LIVING ROOM
IOT CASE STUDIES
INTRODUCTION

Scope

 IoT refers to the network of physical objects (devices, vehicles, Disclaimer

equipment, homes, buildings) that are connected to the internet through Much of the information in this
briefing is of a statistical nature and,
embedded devices and software, which allows these physical objects to while every attempt has been made
collect, analyse and exchange data. to ensure accuracy and reliability,
Euromonitor International cannot be
held responsible for omissions or
errors.
Figures in tables and analyses are
calculated from unrounded data and
Analytics may not sum. Analyses found in the
briefings may not totally reflect the
companies’ opinions, reader
discretion is advised.

The Internet of Things (IoT) in

Automation the home is already a multi-
billion-dollar global industry, as
premiumisation, efficiency and
Internet of Things technology adoption have
encouraged households to
embrace smart solutions. This
E-commerce briefing will analyse the current
market opportunities and
prospects of IoT for individual
areas of the home – the kitchen,
bathroom and living room – and
provide relevant case studies
that reflect current trends in
Security smart-home solutions.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 3

INTRODUCTION

Key findings

Kitchen: most lucrative IoT is driving the kitchen space beyond simple connectivity and apps to
for appliances platforms that connect the cooking, storage, commerce, planning and every
other aspect of the kitchen into a holistic system. The sheer range of appliances
and actions performed by homeowners in the kitchen make this household
space the most lucrative and innovative spot for manufacturers.
Bathroom: nascent The bathroom remains a fairly underdeveloped space for IoT devices. This is
market partly due to the limited number of appliances there and a lack of awareness
among consumers of actual available products. Toilets, showerheads, washing
machines and toothbrushes are the most commonly purchased IoT goods.
Living room as an As consumers and devices become more and more connected, the possibilities
e-commerce hub in terms of what could be leveraged as a vehicle for enabling commerce are
endless. The living room has become the focal point for this.
Ready audience A typical household in an advanced economy today already possesses several
IoT-enabled devices, such as multiple smartphones, a video game console, a
smart TV and a desktop computer or laptop. While some of these devices may
be dormant in terms of IoT usage, they represent a ready and capable smart
infrastructure that can be applied to run a smart-home ecosystem.
Partnerships drive uptake Service providers and smart devices are partnering up to deliver greater
convenience to consumers, encouraging more users to expand their IoT
experience. This has been the case particularly with Amazon’s Alexa hub.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 4

INTRODUCTION

What is IoT in the home?

 IoT refers to the expanding network

of connected appliances and
objects that you can control from
your smartphone, tablet and other
digital devices. These objects can
almost be anything: from domestic
appliances through to vehicles. The
segment is growing rapidly because
the internet enabling even small
inexpensive objects is a relatively
low-cost process.
 In a home setting, IoT is all about
comfort, convenience and ease.
IoT-enabled devices strive to
deliver analytics and access, in
order to save time, save costs or
just help users understand the
digital world around them better.
The sky is the limit in terms of
innovation, which is why the IoT
market has so much hype around it,
attracting almost all big-name
brands in the household space.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 5

INTRODUCTION

IoT market size estimates

Bain predicts that business-to-business IoT segments will generate more than
US$300 billion annually by 2020, including about US$85.0 bilion in the industrial
sector.

PwC believes that IoT investments by businesses will grow from US$215 billion in
2015 to US$832 billion in 2020, while consumer spending on IoT solutions will rise
from US$72.0 billion to US$236 billion.

Accenture estimates that the industrial IoT market could add US$14.2 trillion to the
economy by 2020. The global market for industrial IoT is projected to grow at a 7.3%
CAGR through to 2020.

BCG predicts that by 2020, 50.0% of IoT spending will be driven by discrete
manufacturing, transportation and logistics, and utilities.

McKinsey estimates that IoT could have an annual economic impact of US$3.9 trillion
to US$11.1 trillion by 2025.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 6

INTRODUCTION
IOT IN THE KITCHEN
IOT IN THE BATHROOM
IOT IN THE LIVING ROOM
IOT CASE STUDIES
IOT IN THE KITCHEN
The kitchen is the most lucrative domestic area for IoT
The widest range of
appliances and uses
• IoT is driving the kitchen
space beyond simple
connectivity and apps to
platforms that connect the
cooking, storage,
commerce, planning and
every other aspect of the
kitchen into a holistic
system. The sheer range
of appliances and various
actions performed by
homeowners in the kitchen
make this household
space the most lucrative
and innovative spot for
manufacturers and IoT
specialists.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
High mark-ups on
smart appliances
• While voice-recognition
smart hubs like Amazon’s
Echo have delivered
mainstream innovation at a
low cost, IoT-enabled
kitchen appliances carry a
high premium. This is
particularly the case with
big-ticket items like ovens,
fridges and dishwashers.
The high prices demanded
for connectivity are yet to
be justified in terms of
practical usage, making
IoT-based kitchen
appliances still a relatively
niche range of products.
Plenty of room for
energy-saving
initiatives
• The kitchen is the most
energy-consuming area of
the house in most
countries, creating clear
opportunities for
appliances and
technologies that are able
to deliver cost-savings on
utilities. However, brands
have struggled to market
these benefits in a clear
and understandable way to
consumers. Doing this
without complicated jargon
and in a simplified
message will be key to
winning over audiences.
PASSPORT 8
IOT IN THE KITCHEN

Areas of current innovation and disruption

Sensors
Disruptive tech includes food image recognition tech, infrared spectrometry, digital noses, and water
sensors. Expect the concept of a sensing kitchen to become more prevalent in 2018.

Wireless
Cordless kitchen technology, which focuses on wireless power for small countertop appliances,
is being led by Philips and Haier. Wireless is always an easy sell to consumers, and brands are
keen to make this jump.

Food waste
Startup Ovie has been showing off its food tracking/management system, while Whirlpool and
Samsung have been showcasing how their fridges can help to manage food inventory.

For the elderly

IoT innovations aimed at seniors offer major opportunities and kitchen appliances are beginning
to address this. Safety is a big concern for kitchen/cooking scenarios, but smart assistants,
robotics and augmented reality could be applied to attract the grey dollar.

Robotics
Robots and process automation is a big trend, ranging from cute social robots like LG’s Cloi to delivery
robots and laundry-folding robots. Some brands see the robot as a natural pairing with the kitchen,
while others view them as general purpose assistants for the household.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 9

IOT IN THE KITCHEN

IoT and premiumisation to drive value of kitchen products

Retail Value of Global Cookware Market Retail Value of Global Kitchen Market
2012-2022 2012-2022
2022 2022
2020 2020
2018 2018
2016 2016
2014 2014
2012 2012
0 5 10 15 20 25 30 35 0 10 20 30 40 50 60
US$ billion, real terms US$ billion, real terms

Retail Value of Global Microwaves Retail Value of Global Dishwashers

Market 2012-2022 Market 2012-2022
2022 2022
2020 2020
2018 2018
2016 2016
2014 2014
2012 2012
0 2 4 6 8 10 12 0 3 6 9 12 15 18
US$ billion, real terms US$ billion, real terms

 IoT will play a major role in advancing the value of kitchen products globally, particularly as consumers
increasingly look to upgrade older domestic appliances and move up the product food chain.
Premiumisation will play a pivotal role in this, particularly in advanced economies where consumers are
more willing to pay a premium on high-tech features and newer models.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 10

IOT IN THE KITCHEN

Market for IoT kitchen appliances is expanding

 Penetration of basic Global Household Possession of Selected

kitchen appliances is Appliances and Facilities 2017 and 2030
increasing globally. This is
on the back of rising Electricity
incomes, falling prices of
appliances, and improved
household facilities like Cooker
electricity. In particular, the
expansion of the middle
class in developing Refrigerator

countries like China, India

and Brazil will drive
Microwave Oven
demand for IoT-enabled
appliances. However, the
kitchen is an expensive
Freezer
household space and
connected products must
demonstrate better value Dishwasher
and practicality, in order to
convince consumers to pay 0 25 50 75 100
the premium. % of households

2017 2030
Sources: Euromonitor from national statistics Note: 2030 figures are forecast.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 11

INTRODUCTION
IOT IN THE KITCHEN
IOT IN THE BATHROOM
IOT IN THE LIVING ROOM
IOT CASE STUDIES
IOT IN THE BATHROOM
Still underdeveloped, but big boost to water waste
Nascent segment
• The bathroom remains a
fairly underdeveloped
space for IoT devices.
This is partly due to the
limited number of
appliances there and a
lack of awareness
among consumers of
actual available
products. Toilets,
showerheads, washing
machines and
toothbrushes are the
most commonly
purchased IoT-enabled
bathroom products.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
Water waste
• Countries that suffer
from severe water
shortages provide major
markets for consumer-
based IoT systems that
limit water waste.
Countries impacted by
this are located primarily
in Africa and the Middle
East. Relevant products
include timed sprinklers,
water-efficient
showerheads, and
general products that
collect data to stem
water loss.
Challenges
• A major challenge for IoT
in the bathroom is
installation. It is not as
simple as buying an
appliance for the kitchen.
Installers need to be as
comfortable with network
architecture and
connectivity as they are
with drainage and soil
pipes. Repairs and
troubleshooting will be
much more complex, as
each interconnected
device has the potential
to fail and disable the
entire system with it.
PASSPORT 13
IOT IN THE BATHROOM
Areas of current innovation and disruption
Voice
 Kitchen and bath specialist Kohler now allows its
toilets and shower devices to connect to Amazon's
voice smart hub Alexa for assistance, while fellow
kitchen and bath firm Moen also added Alexa
support to its smart shower line, promising Siri
compatibility soon.
 Smart mirrors that can show your daily schedule
while assessing your complexion are already
widely available.
Sensors
 Sensor-based devices are among the most simple
and straightforward gadgets for the bathroom.
These include touchless automatic soap
dispensers, touchless digital faucets with digital
temperature control settings and programmable
flow configuration, and smart lighting and fans.
 Smart toilets, like Kohler’s Numi Intelligent Toilet,
have touchless flushing and a touchless lid and
seat.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
Automation
 Kohler’s PerfectFill technology can automatically fill
a bath to a consumer’s desired depth and
temperature – allowing the user to simply climb in. It
reduces the amount of time spent physically
monitoring the filling of the bath water.
 Humidity sensors like Aeotec Multisensor 6 alert
users to pre-set humidity levels during showers or
bath times. Similarly, smart switches (like those
from Belkin) can programme heat railings to pre-
heat towels at a specific time each morning.
Efficiency
 A major role of IoT in the bathroom is set to be
focused on preventing water waste. One device
doing this is Amphiro, a smart showerhead that
keeps track of water consumption and temperature.
 Smart electric water heaters with built-in app
support and wireless connectivity are also a
growing niche. They can be powered by solar
energy and remotely controlled, meaning savings
on water-heating bills and more efficient usage.
PASSPORT 14
IOT IN THE BATHROOM

Connectivity a major factor in growth of bathroom products

Retail Value of Global Bathroom and Retail Value of Global Automatic

Sanitaryware Market 2012-2022 Washing Machine Market: 2012-2022
2022 2022
2020 2020
2018 2018
2016 2016
2014 2014
2012 2012
0 5 10 15 20 25 30 0 10 20 30 40 50
US$ billion, real terms US$ billion, real terms

Retail Value of Electric Toothbrushes

Market 2012-2022
2022
2020
2018
2016
2014
2012
0 1 2 3 4
US$ billion, real terms

 IoT is the next step of evolution across numerous bathroom product categories. For example, several oral
care appliances manufacturers, namely Procter & Gamble, Koninklijke Philips NV as well as Kolibree, have
launched a range of connected electric toothbrushes, which will be pivotal to driving sales in the premium
segment.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 15

IOT IN THE BATHROOM

Adoption of water supply key to global growth

 The primary driver of Global Household Possession of Selected

bathroom IoT growth will be Appliances and Facilities 2017 and 2030
advanced economies,
particularly millennials and Water Supply
tech-savvy households in
the USA, Japan and the UK.
These consumers have the
infrastructure, the Flush Toilet

purchasing power and the

desire to experiment with
smart devices. However, Bath or Shower
global adoption will depend
on improved access to
water and higher
Washing Machine
penetration of facilities in
emerging markets. For
example, in 2017 only
55.0% of households in Tumble Drier
developing countries had a
bath or shower, severely 0 25 50 75 100
limiting demand for basic
% of households
bathroom goods, let alone
2017 2030
upmarket smart devices.
Sources: Euromonitor from national statistics Note: 2030 figures are forecast.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 16

INTRODUCTION
IOT IN THE KITCHEN
IOT IN THE BATHROOM
IOT IN THE LIVING ROOM
IOT CASE STUDIES
IOT IN THE LIVING ROOM

The IoT living room is all about e-commerce

 As consumers and devices Frequency of Commerce- Digital Purchases as Share

become more and more Related Smartphone of Consumer Payments in
connected, the possibilities in Activities: 2016 Select Markets: 2016
terms of what could be
Buy an item or UK
leveraged as a vehicle for service
enabling commerce are USA
endless. The living room has Read reviews
become the focal point for this, UAE

with consumers able to connect Compare prices S. Africa

their computers, tablets, while in store
smartphones and smartwatches Brazil
Order foodservice
to other appliances and buy online
goods and services. Products Russia

like Amazon Dash let Make an in-store

mobile payment Australia
consumers order items with a
click of a button. The same Order ride-sharing Japan
experience is feasible through service
voice, courtesy of tools such as India
0% 50% 100%
Amazon’s Alexa. In time, IoT Share of online respondents China
appliances will automatically Almost every day
complete purchases based on 1-2 Times a Week 0% 50% 100%
preferences and consumption 1-2 Times a Month Digital purchases Consumer payments
Less Than Once a Month Source: 2016 Global Consumer Trends
patterns. Never Survey/trade sources

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 18

IOT IN THE LIVING ROOM
Trends driving IoT adoption in the living room
Multi-platform commerce
 A large and growing proportion of households are
equipped with multiple platforms capable of
interconnectivity and digital purchases, creating an
entire IoT ecosystem. Although only a small
proportion of homes are utilising this network to its
full potential, they still have access to several retail
and payment channels. Widely adopted platforms
include smart TVs, video game consoles,
satellite/cable boxes, and Amazon/Google smart
hubs.
IoT service partnerships
 Service providers and smart devices are partnering
up to deliver greater convenience to consumers,
encouraging more users to expand their IoT
experience. For example, US satellite TV service
Dish announced in early 2017 that its Hopper DVR
will be fully compatible with Amazon Alexa; like
Ford, Volkswagen plans to build Alexa into its
vehicle; start-up Ringly offers jewellery that syncs
with social media apps and email accounts.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
First "cocooning" and now "bunkering"
 Today's consumers are spending more time in the
home and are willing to spend more for products
that will help enhance their home lifestyle. This was
originally termed as “cocooning”, but as the trend
has strengthened, a more defined word has been
coined – “bunkering”. IoT is a key ingredient of this
domestic lifestyle, bringing the outside world to the
home via remote working capabilities, retail
channels, and communication platforms.
AI and ML shifting the goalposts of possibilities
 Machine learning (ML) and artificial intelligence
(AI) are the main innovation drivers in IoT, enabling
devices to learn from and adapt to user behaviour.
Areas where this will be seen include blockchain
(easier transfer of data and payments), security
(safety and privacy), smart cities (tech-based urban
centers that utilise IoT to fulfill the demands and
needs of their citizens), and data analytics (to
understand consumers and improve services).
PASSPORT 19
IOT IN THE LIVING ROOM

Rapidly growing segments with IoT possibilities

Retail Value of Global Internet Retail Value of Global Mobile

Retailing Market 2012-2022 Retailing Market 2012-2022
2022 2022
2020 2020
2018 2018
2016 2016
2014 2014
2012 2012
0 700 1,400 2,100 2,800 0 350 700 1,050 1,400
US$ billion, real terms US$ billion, real terms

Retail Value of Global LED Lamps Retail Value of Global Robotic Vacuum
Market 2012-2022 Cleaners Market 2012-2022
2022 2022
2020 2020
2018 2018
2016 2016
2014 2014
2012 2012
0 5 10 15 20 0 1 2 3 4
US$ billion, real terms US$ billion, real terms

 E-commerce, whether mobile or desktop, will be massively shaped by IoT in the coming decades. Almost
all major payment companies and pure online players are preparing for this stage of consumption evolution,
which will emanate largely from within households. Segments like LED lamps and robotic vacuum cleaners
are already major offshots of smart tech and will continue to reap the benefits of growing IoT adoption.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 20

IOT IN THE LIVING ROOM

Future households will possess multiple IoT-enabled devices

 A typical household in an Global Household Possession of Selected

advanced economy today Appliances and Facilities 2017 and 2030
already possesses several
IoT-enabled devices, such Smartphone

as multiple smartphones, a
Colour TV Set
video game console, a
smart TV and a desktop
Laptop
computer or laptop. While
some of these devices may
Broadband Internet
be dormant in terms of IoT
usage, they represent a
Tablet
ready and capable smart
infrastructure that can be Air Conditioner
applied to run a smart-
home ecosystem. This Cable TV
form of IoT penetration will
only accelerate and Satellite TV System
improve, as users
recognise palpable benefits Video Game Console
and convenience in
0 25 50 75 100
managing their home with
% of households
additional layers of data
2017 2030
and smart solutions.
Sources: Euromonitor from national statistics Note: 2030 figures are forecast.

© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME PASSPORT 21

INTRODUCTION
IOT IN THE KITCHEN
IOT IN THE BATHROOM
IOT IN THE LIVING ROOM
IOT CASE STUDIES
IOT CASE STUDIES
Akita: the antivirus protecting homes from digital threats
By 2030, 70.0% of the world’s households will
be connected to the internet.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
 Akita is a new product from Israeli company
HighIoT that claims to use military-grade security
protection that has been retrofitted for smart
homes. Essentially, it is an antivirus for the
household.
 The company recognised growing demand for
security among increasingly digitalised households,
which are becoming more vulnerable to hacks and
data breaches. The device plugs into a LAN port
on the home router and listens in for compromised
devices. When it detects one, it kicks it off the
network.
Key takeaways:
 Security is a major concern for IoT-enabled
households and solutions that help alleviate some
of the risks (at an affordable price) will find a ready
audience.
 Many IoT devices do not receive security updates
and have insecure default settings. In-built security
is likely to become a key feature for connected
appliances.
PASSPORT 23
IOT CASE STUDIES
Android things: Google’s operating system for the home
Android is the most popular operating system for
tablets in the world, with a 62.0% share of the
market in 2017.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
 Android Things is a new operating system for
IoT-enabled appliances released by Google in
May 2018. It is the digital giant’s latest attempt
to break into the smart-home market.
 If the home is gradually turning into a computer,
then the operating system that will run it
becomes an extremely lucrative proposition.
This is the end goal behind Android Things,
which will earn money not by charging hardware
makers for using it, but from consumers using
the operating system for Google search,
YouTube and to buy content from its Play Store.
Key takeaways:
 Early-mover advantage will be crucial in the
smart-home operating market. Presently, there
are numerous systems for devices, but the field
is wide open for a leading brand.
 The OS could be the most lucrative IoT
opportunity of all, as it would provide the
platform for IoT consumer transactions.
PASSPORT 24
IOT CASE STUDIES
Microsoft: investing US$5.0 billion in IoT
In 2016, Microsoft Corp. saw global sales of US$8.7
billion, with 84.6% of this coming from developed
markets.
© Euromonitor International STRATEGY BRIEFING: INTERNET OF THINGS IN THE HOME
 Microsoft announced in early 2018 that it
will invest US$5.0 billion into IoT over the
next five years. The company has seen its
market share in cloud computing grow, as
more customers turn to its Azure platform
for IoT and connected solutions.
 Like its fellow digital giants, Microsoft is
going into IoT in a big way, recognising the
importance of predicting the next disruptions
in household AI and analytics. The
company’s IoT Edge product, which is a
collection of tools that brings AI, Azure
services and custom apps to IoT devices, is
a major move in this direction.
Key takeaways:
 While only a few years ago small brands
dominated the IoT space, today the world’s
largest digital firms are investing billions into
smart-home solutions.
 The household space is set to become a
major battleground for IoT devices and
systems.
PASSPORT 25
FOR FURTHER INSIGHT PLEASE CONTACT
Pavel Marceux
Households Specialist
pavel.marceux@research.euromonitor.com

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