Despite recent economic headwinds, Australians still interested in smart home tech with 7.6 million households now having at least one smart home product
SYDNEY, AUSTRALIA – Despite recent economic headwinds, Australians still interested in smart home technologies with 7.6 million households now having adopted at least one smart home product, with nearly 24 connected devices per home as of 2023, according to new research from the Australian emerging technology analyst firm, Telsyte.
The Telsyte Australian Smart Home Market Study 2023 found that Australia’s smart home market is set to crack $2.5 billion in revenue, driven by demand for energy efficiency, security, price increases, and the anticipation of the smart home concept greatly benefit from the technological advancements in generative AI.
Smart homes becoming mainstream even with the cost
As more electrical devices arrive on the market with computer “smarts”, Australian consumers now have more choice to make their home smart, but must continue to balance the opportunity with the costs.
Almost half (48%) of invested adopters (consumers adopted 5 or more types of smart home devices) say the current smart home offerings are not yet ‘smart’ enough, according to the study.
Telsyte’s research found in 2023 cost of living pressures outweighed the benefits of a smarter home with over half (59%) under increasing financial pressure and less looking to adopt energy optimising solution for their home to combat rising energy costs.
However, the overall trend remains clear: Cost of living pressures will not stop the transition to smarter homes and nearly a third of households now have five or more smart devices.
Robots, EVs and renewables ramp up the smart home
Smart appliance vendors are now committed to enabling ‘connected’ living with aircon, washing machines and fridges taking the lead among appliances consumers see as important to be ‘smart’.
The study found nearly one in five (18%) households have a vacuum robot with more general-purpose robots on the way. iRobot is still the leading brand of vacuum robot despite increased competition.
Surging energy prices continues to add pressure to household budgets with 74 per cent of Australians seeing their electricity bills increase in 2023; however, a sustainable home is still important to Australians during turbulent economic times.
In addition to cost savings and better energy efficiency, the study found 28 per cent of households want to reduce environmental impact with smart energy solutions and more are considering smart batteries for a complete solar solution.
More than half (61%) of solar owners have expressed interested in joining a Virtual Power Plan (VPP) program to help the environment and support their communities.
In the garage, high fuel prices tipping over new car buyers to EVs. Tesla still leads in sales, but EV models priced closely aligned to buyers’ expectations are proven popular.
Telsyte expects demand for home EV chargers set to rise with continued shortages in public spaces.
In-home AI begins to take hold
The past 12 months has seen a lot of hype around generative AI and services like ChatGPT, and Telsyte found device product marketing is shifting from ‘connected home’ to AI-enabled smart living.
“Australians will increasingly look for AI-powered smart living solutions that offer convenience, personalisation, and enhanced functionality,” Telsyte Managing Director, Foad Fadaghi, says.
New Gen AI voice assistants bring superior cognitive understanding of user intentions with advanced natural language processing, and 60 per cent of consumers believe AI can manage a smart home better than themselves. In addition, 43 per cent of people are keen on a smart home with advanced AI capabilities that enable seamless natural language communication and automate complex tasks.
The study found there were an average of 23.8 connected devices in the home in 2023 with 16.1 non-smart devices, 7.1 smart home devices and 0.5 provisioning devices (e.g. modems).
The average number of Internet-connected devices in the home is expected to grow by nearly 10 in the next 4 years and the average number of smart home devices set to grow by nearly half by 2027, equivalent to more than 353 million Internet-connected devices in total.
Telsyte forecasts the smart home market to be worth over $5 billion by 2027 with high value smart home products such as smart batteries, smart appliances and services to drive smart home market value. Smart appliances could make up around a third of all appliance revenue by 2027.
While smart speaker adoption is stagnating, AI-powered experiences are poised to set off the next adoption wave. Google is adding generative AI capability to its Google Nest smart speakers, which are already the main smart speaker for over half of user households.
How will all these AI-powered, connected devices interact? The emerging Matter standard poised to help unify disparate ecosystem.
A joint effort of more than 120 companies, including Google, Apple, Amazon, and Samsung, Matter is a smart home protocol aimed at unifying industry standards and allowing devices with different communication protocols across multiple platforms to communicate with each other.
Smart spaces hot with hybrid work here to stay
Being able to work from home or the office thanks to the pandemic has had a measurable impact on the spaces Australians are looking to improve, with the living room and study now the top smart spaces.
The lounge room, study and front entrance are the spaces where internet-connected devices were installed most in 2023, with the gaming room rising fast.
The study found more than a million (1.2M or 12%) Australian homes now have a dedicated workspace and another 500,000 (5%) households are interested in setting up a space dedicated to their hobbies and DIY.
Connectivity and convenience have joined security and energy efficiency as the top reasons for improving spaces in 2023 and Telsyte forecasts more investments will be made making the home office smarter.
Security and home care putting smart devices to work
In a positive step for the smart home trend, smart security surveillance and smart home care are putting smart devices to work helping with disability and aged care, and not just entertaining people.
Telsyte found 1.6 million (16%) households claim they have seniors or members with a disability that require special assistance or care, and among those households 1 in 3 (32%) are seeking additional help looking after these household members.
A further 37 per cent believe they will significantly benefit from the support provided by voice commands and more intelligent smart assistants.
This signals a new opportunity to implement assistive smart home tech in NDIS households.
The study also found 31 per cent of households have security surveillance systems, and self-monitored online security systems are on the rise with about half of the installed base.
Smart video cameras remained popular in 2023 with increased availability of AI features and more affordable products with the market now worth over $330 million.
Telsyte also found more people are acquiring security cameras from hardware stores and electricians, and more are relying on professional installation for smart security devices leading to boost in mixed mode installations.
Subscriptions are gaining some appeal as appliances get smarter
With most appliance vendors committed to enabling ‘connected’ living and aircon, washing machines and fridges are taking the lead among appliances consumers see as important to be ‘smart’. Smart lightbulb adoption has slowed during the economic downturn, but is expected to grow with more competitively priced units.
To pay for it all, the study found Australians remain moderately interested (16%) in hardware subscription services, but more potential adopters are interested in this model.
Those interested are willing to pay from $26 to $44 per month for each service. Home automation services, utility and insurance providers increasingly considered for subscription services.
The taxonomy of Telsyte's Australian Smart Home Market Study 2023:
IoT@Home segments covered:
For further information on the study or media enquiries contact:
Foad Fadaghi
Managing Director
Tel: 1800 313 142
Email: ffadaghi@telsyte.com.au
Alvin Lee
Senior Analyst
Tel: 1800 313 142
Email: alee@telsyte.com.au
The Telsyte Australian Smart Home Market Study 2023 is a comprehensive study which provides subscribers with:
Market sizing and forecasts of the Australian smart home market by detailed segments including services and installation revenues
Insights into consumer attitudes and technology adoption trends
Analysis of vendor strategies and key growth segments
Smart home user profiles, including adopters, those on the verge of adopting and those not yet to be interested.
Analysis of the smart home ecosystems
Analysis of retail and online channels and their importance to smart home products
Insights into where consumers begin with smart home journey and key market drivers expected to drive rapid adoption in different segments.
In preparing this study, Telsyte used:
An online survey conducted in August 2023 with a representative sample of 1,109 respondents, 16 years and older.
An online survey conducted in December 2022 with a representative sample of 1,036 respondents, 16 years and older.
Interviews conducted with executives from service providers, network operators, manufacturers, retailers, financial analysts and channel partners.
Financial reports released by service providers and manufacturers.
On-going monitoring of local and global market and vendor trends.
Editor’s note:
Telsyte measures sales of devices (“sell out”), not shipments or sales to retailers or carriers (sometimes called “sell-in”). Telsyte believes this is a more accurate measure of performance of products in a marketplace. Telsyte does not rely on disclosure from vendors or general assumptions made for large multinational companies that do not release local market data. Telsyte uses a comprehensive methodology that includes surveys of consumers, discussions with vendors, carriers and their partners, retailers, and financial analysts. In addition, public financial results from manufacturers and carriers are used. Telsyte tests a wide range of products in real life usage scenarios and conducts satisfaction and repeat purchase surveys with large and representative samples of Australian smart device users. Telsyte is a pioneer in measuring and reporting smartphone sales in Australia and has been providing insights on mobile technologies since 2006.
About Telsyte
Telsyte is Australia’s leading emerging technology analyst firm. Telsyte analysts deliver market research, insights and advisory into enterprise and consumer technologies. Telsyte is an independent business unit of DXC Technology. For more information visit www.telsyte.com.au
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