How does the Home Appliances Industry catch the Internet Age?

Attributed By: Gurumukh Uttamchandani, Executive Director, SYSKA Group

Technologies and Growth Trends

“It's going to be interesting to see how society deals with artificial intelligence, but it will definitely be cool.” —Colin Angle

With the advent IoT, smart appliances are set to disrupt the market in the coming years. According to Boston Consulting Group, the global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a CAGR of 28.5%. These figures indicate the breakneck speed at which the IoT industry is growing.

Gartner believes that the data gathered from users in cloud-based neural networks will power 40% of mobile interactions between virtual personal assistants and people by 2020. This means that the data you voluntarily feed to Facebook, Google, and Amazon will be used to create a complex cloud-based profile that cloud-based "smart agents" can use to predict your needs and desires, and thus help in further growth and development of smart appliances.

The above graph shows the number of connected devices (Internet of Things; IoT) worldwide from 2015 to 2025. For 2020, the Internet of Things devices are forecast to grow to almost 31 billion worldwide. Further, the overall Internet of Things market is projected to be worth more than one billion U.S. dollars annually from 2017 onwards. These figures evidently project the high growth in the IoT realm.

The Age of Smart Appliances

Speaking of AI and IoT, it is hard to ignore the fact that these technologies have become an integral part of our day-to-day lives in the form of smart home appliances. According to statisca, the global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a Compound Annual Growth Rate (CAGR) of 28.5%. 

According to GrowthEnabler & MarketsandMarkets analysis, the global IoT market share will be dominated by three sub-sectors; Smart Cities (26%), Industrial IoT (24%) and Connected Health (20%), followed by Smart Homes (14%), Connected Cars (7%), Smart Utilities (4%) and Wearables (3%).

What with smart airconditioner occupying pride of place in our kitchens, smart lighting solutions adorning our homes and smart cooling appliances taking care of the temperature of our abodes, I can feel the “smart” wave of Internet of Things (IoT) and Artificial Intelligence (AI) taking over for good. There are also smart solutions where curtains are synced with the alarm clock to automatically slide open when the alarm rings.

With everyone using a smartphone these days, home appliance companies are jumping onto the “smart home appliances” bandwagon. In case you do not want to buy a whole air conditioner, research is underway where an intelligent air conditioner module can convert an existing air conditioner into a smart one using AI. This type of air conditioner analyses the contents of the air conditioner finds the age of the contents therein and sends an SMS regarding the same.

With such smart solutions around, it becomes convenient to take care of ourselves and our loved ones. According to Cees Links, CEO of GreenPeak Technologies, the evolution towards the smart home and the day when sensors truly integrate intelligence with your house and your smart phone is well on its way. This process has been in progress for many years and can be broken down into three phases: The Connected Home, The Smart Home, and The Really Smart and Intelligent Home.

We are currently in the “Smart Home” phase as trifurcated by Mr.Links. A variety of service providers are focusing on integrating the various appliances via an Internet connection and a smart phone. Amazon’s Alexa is a good example of this. Google and Apple are also not far behind in the race.

The solutions are across realms like home security, health monitoring, lighting, energy and environmental management like heating and cooling solutions, among many others. Sensors play a major role here and enable seamless conversation between the various connected devices.

Another factor that would attract the masses towards this space is the convenience, ease of access, and usage of these products on a daily basis. Voice control is the best thing that could ever happen to smart home appliances wherein one would not even need their smartphone to control their appliances; just a voice command would do the required task.

So be it checking the contents of their refrigerator or dimming the lamp before going to bed, a voice command is enough. “More and more traditional manufacturers have to embrace the AI revolution,” says Yang, President of Tuya Smart. “The new age is coming, and those that don’t develop may find themselves kicked out of the market in a year or two.”

However, it is not easy for traditional manufacturers to upgrade to smarter version of their appliances. It required a great deal of understanding of the technicalities, the new emerging IoT and AI driven market and a lot of budgeting. Converting from a traditional home appliances manufacturing to smart home appliances required a long development cycle that typically lasts six months to one year and R&D costs that can reach several hundreds of thousands of dollars.

The manufacturers will also have a lot of difficulty in being able guarantee product compatibility as they need to work with several suppliers to move into an internet driven interface. They may also face substantially higher level of complexity in the development process and product incompatibility.

Another major obstacle for manufacturers while converting into IoT and AI driven interface is market penetration. With so many brands already establishing themselves as top names in the sector of smart home appliances it is not easy to gain the trust of consumers that reputation in the market.

Another major difficulty arises when the manufacturers are trying to gain a spot in the international market. They can miss the opportunity to expand outside of their domestic market if their suppliers fail to provide cloud services with worldwide reach.

However, it is necessary for these manufacturers to give their utmost best to upgrading their home appliances if they want to stay in the market in a long run. These manufacturers would soon have no place in the market if they are not willing to embrace the change and move forward with the technology.

The reason I foresee a huge demand in the market for such solutions is that they give a new perspective to living. A new frame where mundane matters do not require human attention and humans can actually concentrate on making their lives more meaningful. The entire lifestyle of human race would undergo a massive change with these smart solutions around, where just a tap on their smartphone would enable humans to control a majority of their tasks and how they can be executed.

The Future of IoT

With the demand for ‘SMART’ home and smart home appliances increasing; most home appliances are turning to IoT and AI to develop their appliances into a smart model in order to match the global standards. Therefore, the demands of IoT and AI operating platforms have also increased to facilitate the efficient production of smart appliances to meet the consumer demand.

Services provided by these AI and IoT providers include hardware access, cloud services and App software development, forming a service closed-loop of AI manufacturing. According to Boston Consulting Group, IoT market will reach up to $267 billion by 2020. Therefore, it is high time that even the traditional manufacturers of home appliances buckle up and take necessary steps to make their mark in the smart home market, if they want to thrive.