Purchases of a broad range of smart home devices are expected to surge 12% each year into 2025, according to IDC, but security and privacy concerns are still holding some people back.
“Security and privacy concerns are one of the leading responses when we asked why consumers are not buying or using smart home devices broadly,” said Adam Wright, senior research analyst for smart home technology at IDC.
“A high portion of them say they are still at least somewhat concerned about security and privacy of their devices,” he added via email to Fierce Electronics. “We find that in most instances such concerns are readily pushed to the back of mind in favor of the benefits…chiefly convenience.” Other benefits include greater safety and security, entertainment, and reductions in household costs and energy consumption.
“On the one hand, many consumers are still avoiding the smart home because of privacy concerns, but that’s not enough of people to have a net negative effect on the broad market growth,” Wright said.
“Even though stories about video doorbells and nefarious actors hacking cameras are always in the news cycle, consumers are still buying these devices,” he said.
IDC analyst Jitesh Urbrani also told Fierce Electronics that the privacy concerns IDC hears are mostly about data being shared with third parties that originated with the smart home devices. “We don’t necessarily know if those concerns are related to facial recognition, racial profiling, police matters or anything else, although I’m sure each plays a role,” he said.
Some smart home device critics have said the technology is generally nice to have, but not a necessity. “For some categories such as lights or speakers, that might hold true,” Ubrani said. “But for things like thermostats, it goes beyond a luxury or entertainment value and there can be actual energy savings.”
Many smart home products like thermostats have very long replacement cycles, which limits their market growth, Ubrani added. However, he said, “global household penetration of these products is quite low and so there’s still plenty of potential.”
IDC reported that shipments of all home monitoring and security gear along with video entertainment and smart speakers are expected to surge to to 1.4 billion device by 2025, up from 801 million in 2020.
Home monitoring and security is the second biggest category so far, comprising about 20% of the total and will grow by 13% a year into 2025, IDC added.
The biggest category is video entertainment, about 37% of the total, with smart speakers ranked third with 16%.
The market’s growth could be inhibited with ongoing concerns about security and privacy, which were acute starting in 2019 with worries that doorbell cameras could spy on owners or be used improperly by police for racial profiling in certain neighborhoods.
RELATED: Amazon Ring-police links attacked over facial recognition
In 2019, a group of civil rights and religious groups signed an open letter calling on elected officials to end partnerships with Amazon and police over the potential use of facial recognition with Amazon Ring doorbell surveillance.
Subsequent to the open letter, Ring officials said Ring and Amazon employees don’t have access to live feeds of Ring devices and added its central mission is to make neighborhoods safer through its Neighbors app, which has been used by some police.
More recently, in early 2020, Ring unveiled a new Control Center in the Ring App to allow users to control privacy and security settings. It also allows users to opt out of receiving video requests where local police have joined the Neighbors App. It was also designed to give more visibility to users in how their data is kept secure and private.
In an article updated on Feb. 17, Safety.com endorsed the Ring Control Center dashboard and credited Ring for fixing a security vulnerability that had led to multiple incidents of Ring cameras being hacked.
IDC noted smart home devices remained fairly resilient during 2020 despite the pandemic and showed year-over-year growth across all device categories. Of all the categories, growth is expected to slow for smart speakers and displays over the next few years as the installed base reaches maturation.
In coming years, the U.S. will dominate the market, with China in second place. However, China is expected to overtake the U.S. by the end of 2024, IDC said. The global market thus far is dominated by Amazon and Google, which owns the former Nest brand, now called Google Nest.