Google Inc (NASDAQ:GOOG) is all set to monopolize the smart home space. But it may be an exercise in futility. Google’s Nest introduced its brand new line of smartphone devices recently. However, while the device updates made a powerful impact, the company is faced with a significant obstacle. There doesn’t seem to be enough demand for a connected home.
As per a report from Argus Insights consumer demand for connected home, products decreased considerably in the first half of this year and is still plunging. The report revealed that consumer appetite for smart home goods in the month of May this year waned by 15% as compared to the same month last year. While Argus’s data is sourced from the various consumer reviews of a plethora of different retailers and does not hinge on sales numbers other statistics indicate that American customers have yet not fully bought the concept of home automation.
Just around 13% of American households having broadband own minimum one smart home product as per a report by Park Associates and the Consumer Electronic Association in 2014. Additionally, the report says that 62% were unacquainted with smart home goods.
Frank Gillett, a technology analyst at Forrester Research, says that just about 10% of American adults possess and utilize smart home devices. Also, the number is experiencing a steady rise in the last two years. He predicts slow, but steady growth of the sector in the future interspersed with fluctuations.
Consumers are slow to adopt the smart home paradigm partly as they want to be sure it’s worth the price charged.
In spite of Nest’s products being competitively priced, there is much persuasion Nest has to do to draw in the masses. According to Gillette, many people are skeptical about the value proposition of smart home goods; hence, the lukewarm response.
People currently prefer small incremental acquisitions instead of going the whole hog. Interestingly, Google Trends reports that an increasing number of people are using keywords such as “smart home”, “connected home” and other similar terms in their searches.