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The Connected Home - UK - June 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Connected home growth largely reliant on desire for voice commands
Figure 1: Use of new technology in the last three months, April 2017-December 2018
Potential insurance savings drive interest in smart security
Figure 2: Ownership of smart devices for the home, October 2018
Companies and brands
Amazon dominates three quarters of voice-controlled speaker market
Figure 3: Brand of voice-controlled speakers in household, March 2019
Total connected home advertising spend falls in 2018
Figure 4: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by category, 2016-18
The consumer
Over four in 10 people have a connected home device
Figure 5: Household ownership of smart Wi-fi-connected devices, April 2018 and March 2019
The expense of smart home devices is the main limit to growth
Figure 6: Reasons for not buying smart home devices, March 2019
Security and safety devices are the most likely to attract new smart home customers
Figure 7: Interest in smart home devices, March 2019
Video doorbells top the smart home security wish list
Figure 8: Smart home security devices buying intention, March 2019
Online-only retailers the first port of call for smart security
Figure 9: Smart home security purchase location, March 2019
Six in 10 people keen to use smart security for parcel deliveries
Figure 10: Attitudes towards the connected home, March 2019
What we think
ISSUES AND INSIGHTS
The success of voice-controlled smart speakers must be used to drive the wider connected home
The facts
The implications
Maximising the potential of the smart security market
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Connected home growth largely reliant on desire for voice commands
Proportion of people renting could limit connected home investment
Amazon investing heavily in the connected home
Smart speakers becoming a key part of major sale events
Potential insurance savings drive interest in smart security
MARKET DRIVERS
Connected home growth largely reliant on desire for voice commands
Figure 11: Use of new technology in the last three months, April 2017-December 2018
Proportion of people renting could limit connected home investment
Figure 12: Home ownership, by age, March 2019
Amazon investing heavily in the connected home
Smart speakers becoming a key part of major sale events
Potential insurance savings drive interest in smart security
Figure 13: Ownership of smart devices for the home, October 2018
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Amazon dominates three quarters of voice-controlled speaker market
Apple’s late entry to the market has limited HomePod take-up
Google rebrands Home Hub and launches Nest Hub Max
Amazon upgrades Echo range and launches Echo Sub
Total connected home advertising spend falls in 2018
BRAND OWNERSHIP – VOICE-CONTROLLED SPEAKERS
Amazon dominates three quarters of voice-controlled speaker market
Google continues to expand range to challenge Amazon
Apple’s late entry to the market has limited HomePod take-up
Figure 14: Brand of voice-controlled speakers in household, March 2019
LAUNCH ACTIVITY AND INNOVATION
Google rebrands Home Hub and launches Nest Hub Max
Figure 15: Google’s Nest Hub Max
Amazon upgrades Echo range and launches Echo Sub…
…alongside its first smart plug
Figure 16: Amazon Smart Plug
Samsung set to enter voice-controlled speaker market with Galaxy Home
Figure 17: Samsung’s Galaxy Home smart speaker
Apple expected to release second-generation HomePod in 2019
Echo devices begin supporting Apple Music
Amazon rolls out Alexa Guard security in the US
Bang & Olufsen brings Google Assistant to the luxury speaker market
Figure 18: Bang & Olufsen’s Beosound 1 and 2 speakers
ADVERTISING AND MARKETING ACTIVITY
Total connected home advertising spend falls in 2018
Amazon remains by far the largest smart home advertiser
Figure 19: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by category, 2016-18
Figure 20: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by advertiser, 2018
Nearly two thirds of connected home advertising budgets focused on TV
Figure 21: Total above-the-line, online display and direct mail advertising expenditure on connected home devices, by advertising medium, 2018
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Over four in 10 people have a connected home device
Voice-controlled speakers now lead the connected speaker market
The expense of smart home devices is the main limit to growth
Security and safety devices are the most likely to attract new smart home customers
Video doorbells top the smart home security wish list
Twice as many would pay for professional installation than would do it themselves
Six in 10 people keen to use smart security for parcel deliveries
OWNERSHIP OF CONNECTED HOME DEVICES
Over four in 10 people have a connected home device
Voice-controlled speakers now lead the connected speaker market
Smart domestic appliances struggling for growth…
…while connected security shows promise
Figure 22: Household ownership of smart Wi-fi-connected devices, April 2018 and March 2019
The expense of smart home devices is the main limit to growth
Convenience and function must overcome technological overload
Privacy remains an issue with concerns over device hacking
Whole-home cybersecurity potential
Figure 23: Reasons for not buying smart home devices, March 2019
INTEREST IN CONNECTED HOME DEVICES
Security and safety devices are the most likely to attract new smart home customers
Control of heating and lights is key market for the connected home
Interest in connected speakers points to further market growth
Long lifecycle of domestic appliances limits upgrades to smart devices
Figure 24: Interest in smart home devices, March 2019
Men showing more interest in the connected home…
…while high interest among younger demographics points to long-term growth
Figure 25: Interest in smart home devices, by age, March 2019
Half of parents of under-18s interested in voice-controlled speakers
Figure 26: Interest in buying a smart voice-controlled speaker, by parental status, March 2019
SECURITY AND THE CONNECTED HOME
Video doorbells top the smart home security wish list
Far greater interest in house alarms than damage prevention sensors
Half of those interested in connected security considering smart locks
Figure 27: Smart home security devices buying intention, March 2019
Online-only retailers the first port of call for smart security
Figure 28: Smart home security purchase location, March 2019
Twice as many would pay for professional installation than would do it themselves
Figure 29: Smart home security installation, March 2019
Security subscriptions find favour with the under-45s
Figure 30: Smart home security subscriptions, by age, March 2019
ATTITUDES TOWARDS THE CONNECTED HOME
Six in 10 people keen to use smart security for parcel deliveries
Figure 31: Attitudes towards the connected home, March 2019
Automated household orders could drive the connected home
Figure 32: The connected home – CHAID – Tree output, March 2019
Over half of 16-34s keen to use voice commands to shop online
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
CHAID analysis – Methodology
Figure 33: The connected home – CHAID – Table output, March 2019

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