Connected Home Products Command a Significant Price Premium Over Non-Connected Alternatives
In a recent analysis by Parks Associates, a significant disparity in pricing has been unveiled between consumer IoT (Internet of Things) products and traditional, non-connected counterparts. The study, conducted among over 100 executives in the connected home industry, uncovered that IoT products are priced between 21% and 70% higher on average, leading to a striking overall average price increase of 44%. This finding sheds light on the evolving landscape of consumer technology and the factors driving these price trends.
Jennifer Kent, the Vice President of Research at Parks Associates, emphasizes that the smart home and security sectors are experiencing this price stability for several reasons. With increasing consumer demand for safety and security solutions, particularly in uncertain times, these sectors are well-positioned to meet the evolving needs of consumers. Additionally, the dual pressures of electrification and data center growth are fostering a supportive environment for smart home technology.
The report further reveals that 90% of consumer IoT businesses are now utilizing artificial intelligence (AI) within their organizations, while 79% are employing AI to enhance their end-user products and services. This strategic trend indicates a growing reliance on data analytics to refine marketing approaches, streamline product development, and improve customer experiences.
One of the critical insights from the research highlights the intent of 51% of businesses in the consumer IoT space to expand their market reach through new channels by 2025, with a particular focus on builders and multifamily properties. This shift suggests that these businesses are recognizing the importance of partnerships to enhance their service offerings and reach broader audiences. Importantly, 86% of the connected product units in the market are now integrated with internet connectivity, which is becoming essential for real-time data sharing and enhanced user engagement.
Moreover, the study points to a growing trend where 58% of smart product lines are linked with a paid service feature, although the uptake varies based on product category. This signifies a move towards subscription or service-based models, allowing businesses to generate recurring revenue streams.
Kent also identifies integration with existing home devices as a major factor influencing consumer engagement. Unlike gamification strategies, which have had mixed results, effective interoperability among smart devices appears to provide more significant value, simplifying the user experience.
In conclusion, while technological innovation remains crucial in the consumer IoT sector, the study highlights the importance of comprehensive strategies encompassing marketing, pricing, and logistical operations. Establishing a competitive edge in this market requires companies to adapt quickly to shifting consumer expectations and technological advancements—ensuring they can profitably maintain their positions in a landscape that is rapidly changing. For those looking to delve deeper into this emerging field, the full report offers a wealth of insights, including smart technology adoption trends, service models, and revenue opportunities, serving as an invaluable resource for stakeholders in the connected living ecosystem.
Jennifer Kent, the Vice President of Research at Parks Associates, emphasizes that the smart home and security sectors are experiencing this price stability for several reasons. With increasing consumer demand for safety and security solutions, particularly in uncertain times, these sectors are well-positioned to meet the evolving needs of consumers. Additionally, the dual pressures of electrification and data center growth are fostering a supportive environment for smart home technology.
The report further reveals that 90% of consumer IoT businesses are now utilizing artificial intelligence (AI) within their organizations, while 79% are employing AI to enhance their end-user products and services. This strategic trend indicates a growing reliance on data analytics to refine marketing approaches, streamline product development, and improve customer experiences.
One of the critical insights from the research highlights the intent of 51% of businesses in the consumer IoT space to expand their market reach through new channels by 2025, with a particular focus on builders and multifamily properties. This shift suggests that these businesses are recognizing the importance of partnerships to enhance their service offerings and reach broader audiences. Importantly, 86% of the connected product units in the market are now integrated with internet connectivity, which is becoming essential for real-time data sharing and enhanced user engagement.
Moreover, the study points to a growing trend where 58% of smart product lines are linked with a paid service feature, although the uptake varies based on product category. This signifies a move towards subscription or service-based models, allowing businesses to generate recurring revenue streams.
Kent also identifies integration with existing home devices as a major factor influencing consumer engagement. Unlike gamification strategies, which have had mixed results, effective interoperability among smart devices appears to provide more significant value, simplifying the user experience.
In conclusion, while technological innovation remains crucial in the consumer IoT sector, the study highlights the importance of comprehensive strategies encompassing marketing, pricing, and logistical operations. Establishing a competitive edge in this market requires companies to adapt quickly to shifting consumer expectations and technological advancements—ensuring they can profitably maintain their positions in a landscape that is rapidly changing. For those looking to delve deeper into this emerging field, the full report offers a wealth of insights, including smart technology adoption trends, service models, and revenue opportunities, serving as an invaluable resource for stakeholders in the connected living ecosystem.
Topics Consumer Technology）
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