iot innovations & the smart home · •iot smart home - - early stages of connected home -...
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/ ©2016 NAVIGANT CONSULTING, INC. ALL RIGHTS RESERVED1 Confidential and ProprietaryConfidential and Proprietary
NAVIGANT RESEARCH
IoT INNOVATIONS & THE SMART HOME
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BUILDING
INNOVATIONS
Intelligent Building Management Systems
Residential Energy Innovations
Energy Efficient Buildings
Lighting Innovations
Smart Cities
NAVIGANT RESEARCH
TRANSPORTATION
EFFICIENCIES
UTILITY
TRANSFORMATIONS
ENERGY
TECHNOLOGIES
Wind Energy
Grid-Tied Energy Storage
Distributed Energy Storage
Advanced Battery Innovations
Microgrids
Distributed Natural Gas
Distributed Renewables
Electric Vehicles
Fuel Efficiency and Emerging Technologies
Mobility
Transportation Forecast
Internet of Things
Connected Grid
Digital Grid
Dynamic Grid
Demand-Side Management
Digital Utility Strategies
DER Strategies
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THE INTERNET OF THINGS
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IOT IS AN ENABLING TECHNOLOGY
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IOT SMART HOME VISION
• IoT Smart Home -
- Early stages of connected home
- Smart home moves beyond connected devices to
integrated system with intuition and intelligence
• What to expect
- Transition from point solutions to comprehensive
solutions
- More connected devices
- More automation, efficiency
- Smart home as a grid asset, a node in the Energy
Cloud
- IoT powering this transition
(Sources: ArchTen, NHTSA, liveworkstudio)
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IOT TREND IS HERE, AND ACCELERATING
NEWER PLATFORMSAmazon Alexa, Google Assistant,
IBM Watson
CONSUMERS READY
Smart thermostat penetration ~5%↑65% excited about smart tech (PwC)
MERGER AND ACQUISITION SPENDSoftBank buys ARM Holdings, Dialog Semiconductor buys Atmel,
Cisco acquires Jasper
1
2
3
The early hype of IoT is being replace by action
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WHAT IS DRIVING THIS MARKET?
Growing consumer awareness of devices, benefits (e.g., energy management)
Enhanced, affordable home security systems
Proliferation of mobile devices and apps
High penetration of in-home networks
Wide area connectivity
Falling IoT component costs
Easier installations
Insurance discounts
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IOT ADOPTION INCREASING
• Device shipments are
expected to grow
• Smart meters:
- 49.5 million to
106 million in 2026
- Compound annual growth
rate (CAGR) of 8%
• Smart thermostats:
- 5.7 million to 22.6 million
- CAGR of 14.7%
• Smart appliances:
- 2.8 million to 93 million
- CAGR of 41.8%
Residential IoT Device Shipments by Type,
World Markets: 2016-2026
-
50
100
150
200
250
300
350
400
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
(Millio
ns)
Smart Meters
Smart Thermostats
Lighting
Smart Appliances
Security-Home Management
Smart Plugs
EV Charger
Solar PV
Energy Storage
Other
(Source: Navigant Research)
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IOT: OPPORTUNITIES & CHALLENGES
• While the IoT market is here, it is still emerging
• Challenges:
- How to transition this market from “the chasm” to mainstream adoption?
- How to deploy IoT solutions and provide lasting value to connected devices through
services?
- How to monetize this market?
(Source: Navigant Research)
IoT Device Adoption Curve
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MARKET BARRIERS
• Barriers exist and need to be
overcome
- Numerous protocols
- Smart devices are still premium,
expensive, and not affordable to the
masses
- Overall smart home awareness still
lacking
- Fear over loss of privacy
- Security concerns
- Unclear value propositions
- Lacking in critical use cases
• How do stakeholders overcome
these challenges?
Sampling of Communications Protocols
and Standards
(Sources: Apple, Ayla Networks, Bluetooth SIG, Thread Group, Z-Wave Alliance, ZigBee
Alliance)
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BEST PRACTICES
• Interoperability
- The IoT is fragmented and the success of this market relies on interoperable platforms and open ecosystems
• Comprehensive solutions
- Transitions the market from point solutions to comprehensive platforms with on-going services
• Hybrid technologies
- The cloud is the future of IoT, but there are applications where analytics at the edge make more sense; combine solutions to
maximize efficiency of a system
• Data privacy and security
- Vendors must ensure security of solutions and inform customers about data privacy to foster trust in IoT market
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COMPETITIVE LANDSCAPE
Transition from point solutions to comprehensive platforms by
expanding through value chain or partnerships.
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IOT BUSINESS MODEL FRAMEWORK
Devices
Apps
Services
Product
Platform
Ecosystem
Transactional
Transactional
or Recurring
Recurring
Offering Revenue Value Capture
Set the right price
Provide personalization and
network effects
Create a solution
IoT Stack
Goal of the market is to transition from one-time transactions to recurring
revenue through value-added services.
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KEY TAKEAWAYS
The IoT trend is here and accelerating
Drivers:
- Device adoption, clarity around value propositions
- Early adopters
- Story of the consumer
Barriers:
- Real, especially security threats
- Can be overcome
Plenty of uncertainty at this early stage, similar to the Internet in 1995
Smart products and services go beyond just connected devices, toward
intelligence and comprehensive platforms through integration, which leads to
smart home that can be used as a dynamic grid asset
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PAIGE LEUSCHNERResearch Analyst
+44 (0) 738 702 3898
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