People have been talking about smart homes since Isaac Asimov started writing about science fiction novels. Since the dawn of the Internet of Things (IoT) a few years ago, people believed that every American would be living in a smart home within a few years. According to 2013 research from Markets and Markets, the smart home market would be worth over $50 billion by 2020.
Unfortunately, those predictions appear to have been overly optimistic. Despite all the advantages of owning a smart home, few people have taken the leap.
Here are some of the reasons the IoT hasn’t created strong demand for smart homes yet.
1. Liquidity Concerns
Many people want to own a home where they can use their voice to turn lights on or do other impressive things with IoT technology. However, these benefits are luxuries for most people.
Other people may feel these features are too frivolous. This can be a problem for homeowners that intend to sell their home down the line. Since smart homes tend to cost more, they may be too expensive for some buyers. This can hurt liquidity, unless you are willing to sell for less than market value.
2. Security Technology is Still a Serious Concern
Smart homes may offer many wonderful conveniences, but they have one major pitfall – they are a ripe target for hackers.
Hackers can bypass your virtual locks or take control of the equipment in your house. This can be a frightening scenario. Unfortunately, IoT security is still not nearly advanced enough to address these risks.
3. Maintenance and Obsolescence Costs
Obsolescence is another major concern with smart homes. According to Epsilon, most smart home devices need to be replaced within 10 years.
This isn’t a big deal for people that only invested in a few smart home devices, such as a $250 smart lock for their front door. However, if families invest thousands of dollars in smart home technology, replacement costs will be very expensive over the lifetime of their home.
Maintenance costs are another concern. Homeowners can rely on firms like Attitude Comfort to handle certain smart cooling system repairs, but other smart home devices are more complex and require more expertise.
4. Resistance to Change
Technology and cost aren’t the only factors that are impeding change. Humans by nature are reluctant to change.
Many people are skeptical of smart homes. Some of their concerns are perfectly rational, while others are not. Regardless, it will take time for the concept to catch on.
Unfortunately, this creates a dilemma for the market. Reducing technology costs depends on economies of scale. Without stronger demand, smart home technology will remain expensive, which further makes people reluctant to make the change.
5. Adapting Uniform Standards
Yuping Tseng, Chief Technology Officer, ThroughTek Co. states that implementing uniform standards is essential before smart homes can be mainstream.
“In many cases, the data from the imaging system is uploaded onto the cloud. A standard protocol is needed for the data – it is more convenient if the standard is already in use, because the required infrastructure will already be in place. If new technologies are used, then the cost of deployment will go up significantly. Compliance with standards is very important – companies should try to avoid using their own formats. If the standard is an open source one, it can be used by many more customers.”
Smart Home Market is Still in its Infancy
Smart homes may be the future, but they still haven’t caught on yet. A lot of issues still need to be addressed. When they are more secure and affordable, people may be much more willing to invest in them.
This post is part of our contributor series. It is written and published independently of TNW.