Will 5G Boost the Adoption of Smart Living?

Gartner analyst Jessica Ekholm on what Mobile World Congress 2018 attendees can expect to see and hear about smart living.

In less than a week’s time, the big players of the mobile communications sector will gather at Mobile World Congress in Barcelona. Smart living is at the top of the agenda, with several vendors onsite to present new creations fueled by the emergence of virtual assistants and artificial intelligence.

Consumer spending on connected home devices will total $189 million in 2018, an 18% increase from 2017

Gartner research vice president Jessica Ekholm shares what attendees can expect to see and hear and provides insight into the current state of smart living — and its future in light of the growing accessibility of the Internet of Things (IoT) devices and technologies and the launch of 5G.

Will smart living (home and entertainment) become a major priority for apps, media and mobile device vendors?

While the connected home is a much discussed topic, we’ve also witnessed an increase in the services and devices and, more generally, solutions used in the connected home over the last five years. Gartner predicts that consumer spending on connected home devices will total $189 million in 2018, an 18% increase from 2017.

That means providers need to make sure that they are part of this rising trend of connecting people’s homes and lives.

The adoption rate remains, however, very slow. According to Gartner’s latest personal tech survey, 12% of users in the U.K., U.S. and Germany use some form of smart energy controls such as thermostats or lighting. Another 7% use some type of smart home access device, such as smart door locks, with a slightly higher usage in the U.S. and U.K. than in Germany.

What is the main challenge providers of connected home products are facing?

Although the uptake of connected home services recorded slow growth over the past few years, we have witnessed a small boost fueled by the emergence of virtual personal assistants (VPAs) such as Amazon Echo and Google Home. They are encouraging VPA users to try out additional connected home services, such as smart lighting, through their VPA-enabled device.

 Conquering new buyer markets is a key challenge

Currently, the main issue for providers of connected home products is conquering new buyer markets. Providers want to appeal to larger majority of consumers overall, not only a few early adopters. It is a challenging endeavor as there are several barriers that prevent consumers from purchasing a smart home product or service. They need know what’s in it for them as a consumer and ask, Why spend my hard-earned cash on something that may, or may not, create value for me and my family?

What is missing to fuel the appetite of consumers?

There is no definitive solution for stimulating appetite among mainstream users. But the fact is that more and more devices and appliances are gradually becoming IoT-connected. Therefore, users are increasingly becoming aware of the ability to connect and receive constant insights about themselves and how their day is progressing through the plethora of connected devices and technologies, from wearables to connected cars.

The ability to get insights about you or your daily activity across multiple devices —and control and monitor your home — will slowly but surely attract a more mainstream consumer base. Our household is increasingly becoming connected, and undoubtedly, providers in this space are in it for the long haul, not the short haul.

Will 5G boost the connection of a larger number of devices with each other?

Several global leading communications service providers (CSPs) have begun testing 5G. It is expected that the first commercial services will launch in 2019.

Gartner forecasts that 3% of network-based mobile CSPs (20 to 30 mobile network operators) will launch 5G networks commercially by 2020, including CSPs in the U.S., South Korea, Japan, China, Australia, Singapore, Russia, Sweden, Middle East countries, European Union countries.

The current trials are focused on fixed wireless access, enhancing mobile broadband capabilities to support video access — both higher definition in video and video in general — and consumer and enterprise usage of virtual and augmented reality. CSPs are also testing applications aimed at connected cars and autonomous vehicles.

CSPs need to carefully consider how they market 5G

Gartner analysts do not expect 5G premium revenue to simply materialize from the same business and service continuation of 4G. Knowing this, CSPs must consider new business models and applications, not only from seed-oriented, but need-oriented perspectives.

The launch of 5G will undoubtedly be confusing for users who understand the exact usages of, and need for, 5G. As such, CSPs need to carefully consider how they market 5G, and not fall into the same trap as some did previously when marketing 4G in its early days — that is, overhyping its capabilities and/or marketing 3G+ as 4G.

Will it fuel end-user spending in smart appliances, energy monitoring, smart lighting and smart homes?

The answer is marginally. 5G may be adopted as an alternative to fixed wireless for those users who may get better — faster, more efficient, less latency— broadband via 5G than their current fixed access.

Gartner expects that households will use 5G primarily for video and for security and surveillance cameras installed by homeowners. Although not as widespread as video access and surveillance, other usages that could benefit from 5G will be augmented reality and virtual reality.

Spread the love