The smart home market is stable, but why are those who have been selling more and more bad?


The prosperity of the smart home market is being recognized by more and more people. On June 25, research firm IDC released the latest estimates for the smart home market. The smart home market is said to continue to grow at a compound annual growth rate of 14.9% in the next few years. This includes the “required hub” of smart speakers, as well as smart light bulbs, smart sockets and other devices. However, while the market is expected to be optimistic, we can also see in the European and American markets that some smart home brands that have been selling well in the past are continuing to fall. Data shows that Philips Hue smart bulbs, Nest thermostats acquired by Google, Samsung SmartThings, which has launched smart hubs, and so on, have seen sales decline on Amazon. Among them, Philips Hue smart light bulb once ranked second in Amazon’s merchandise sales, and now ranks in the top 100. Nest, once ranked 30 to 40, has now fallen to more than 80. As for Samsung SmartThings, after a short sales climax during Christmas last year, it immediately fell out of Amazon’s 100 list. As the basics of smart homes continue to develop positively, what can we find out from these failed “single sample”? Spears and shields of smart homes: Explosive models and large-scale optimism for smart homes, but specific products but lack of sales, this seemingly contradictory situation, we can find some specific problems on the smart home brand . First of all, it is difficult for smart home prices to remain in a stable state. Just like Philips Hue is the first to introduce a smart light bulb that can be controlled by voice, once with a low sales volume. But soon IKEA also launched a product with similar functions, and at the same time the price is far lower than Philips Hue, the user’s purchase demand will be immediately dispersed to different brands. In other words, smart technology does not bring a premium to home products, especially on products with a wide range of applications such as light bulbs and sockets. At the same time, in terms of experience, smart home products are not perfect. Speaking of the experience of smart homes, our first reaction is likely to be that the voice interaction is not sensitive, or the response is slow. Many consumers have already been persuaded by the complicated startup and installation process before actually testing the “smart ability”. Some consumers said that when he tried to control the smart bulbs in his home with six smart plugs, he found that he needed 11 steps for each bulb, and it was even hard to find a staff who could help him. Moreover, in the past two years, there have been many rumors about privacy issues caused by smart homes, which makes it easy for people to lose security to related products. Finally, it is worth noting that the household products themselves are not fast-moving products, and the replacement cycle is long. There may also be situations in which the market has become saturated because the user has already purchased the product and there is no replacement demand. Overall, due to frequent price changes and the imperfect product experience, smart homes are likely to fall into a “wait and see period”. The first batch of early adopters did not give good feedback, making it difficult to expand more sales in the future. More users are still waiting for smart home products to become cheaper, or smart home products to make new changes in technology. The smart home has more than one area: the smart speakers that are played by iron, and the ecological partners of the running water. Under the sluggish sales of the subdivided categories, why is there an overall growth of the smart home market? The reason for this contradiction lies in the extension of individual items and the expansion of multi-category in smart homes. The so-called single-category category extension refers to the continuous sales force of one category, and the expansion of multi-category is the emergence of new categories to stimulate consumer purchase. In the current smart home field, it is clear that there is a stronger multi-category expansion capability than the latter. This is particularly evident in the Chinese market. IDC’s 2018 China smart home equipment market quarterly tracking report shows that the Chinese market’s smart speakers, smart light bulbs and smart door locks are leading the growth rate. Among them, the shipment of smart speakers has reached more than 20 million units, the shipment of smart bulbs has reached 560,000, and the annual shipment of smart door locks has reached about 850,000. Moreover, an obvious overlap curve can be found in the growth of different categories. For example, the growth of smart door locks is evident in the second half of the year, and the growth of smart bulbs is concentrated in the first half of the year.By the time Q1 in 2019, the data showed that the sales of smart cameras, smart cat eyes and other home monitoring devices began to show an upward trend. The sales increase of this different category is of course not a natural situation, but the manufacturers collectively push the market to promote marketing. The so-called manufacturing has made it possible for the overall market share of smart homes to rise. And it can only achieve a continuous change in a single category, almost only a smart speaker. Perhaps the reason for this is that since the birth of Amazon’s Echo, the shape of smart speakers has been constantly changing. For example, the price drop brought by Chinese manufacturers, as well as the trend of screened smart speakers that began to appear at the beginning of this year. The product update iteration speed is fast, and it has always shaken the curiosity of consumers. At the same time, smart speakers are also a kind of “rarely wrong” products. Even if there are not many devices controlled by IoT eco-capacity, or the voice interaction technology is not sensitive, at least the functions of smart speakers in audio-visual entertainment will not be affected. In addition, the technology of the smart speaker itself is relatively mature, and the word-of-mouth is relatively stronger than other smart home products, so it can maintain a continuous sales driving force. How far is the idealized future? However, in order to maintain a healthy growth of the smart home market as a whole, relying on the current sales of such smart speakers, the “One Belt and More” model of relay sales of other products is obviously insufficient, and the continuous sales growth of as many categories as possible is maintained. Is the ideal state. However, from this ideal state, the smart home market still needs to go through several stages. Among them, there is a stage in which technology is constantly updated and developed. At present, the important problem facing smart home products is the time period when the current AI and 5G technologies continue to advance. The software algorithms behind the smart home include connection protocols, which are all likely to be updated in a short period of time. Faster data transfer speeds and more powerful data processing capabilities may bring new demands to smart homes and even change the shape of smart home products. At the same time, there is also a period of cost fluctuations. The rapid development of technology means that technology investment is continuously leveled and the technology premium is continuously broken. Therefore, smart home products are also likely to fall into the same price-performance warfare as the smart phones (in fact, this can be seen in the smart speaker category). This stage is very difficult for some small manufacturers. Finally, it is also the natural fluctuation phase of the frequency of replacement of household products mentioned above. Specifically, it is a smart home product with strong independence and rich functions. For example, the past smart speakers and this year’s smart alarm clock with screen and smart cat eyes will be more advantageous in sales; others need to rely on products such as speakers/mobile phones as interactive hubs. Products, such as light bulbs, etc., are still difficult to break through the replacement frequency of the original home product “bad and then change”. Conclusion With the help of Philips Hue and Samsung SmartThings in the European and American markets, what measures can Chinese manufacturers take to better survive these stages? First of all, from a technical point of view, manufacturers not only need to maintain their own investment in technology research and development, but also “remaining” on the product, and continuously update the software on products that have already been introduced to the market. At the same time, avoid the mistakes made by other manufacturers, and try to streamline the time spent on installation, connection and resetting of smart home products. At the same time, in the industrial ecology, the fluctuation of technology and cost will bring about the integration of the entire ecological chain. Most small-scale manufacturers must cooperate strategically with home equipment and technology giants, and even be invested and acquired, in order to be able to bear the future competitive risks. In addition to the C-end market, for China’s densely populated areas, cooperation with property developers, rental service agencies, property and other B-side partners is also a good way to maintain sales momentum. In general, the sales growth of smart homes currently “one year’s explosion” will always pass. With the end of the drumming and flowering, the manufacturers who have deep technical layout and cost pressure on the smart home can stand in the market better. .

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