A strong showing of smart home devices at the recent CES 2016 trade show illustrates the growth potential of the emerging smart home network, one that ABI Research forecasts will nearly double in 2017.
The research firm said that the groundwork and service offerings developed over the past few years provide what it says is a "solid impetus for wider adoption." While hardware-based sales will drive smart home revenues over the next five years, ABI notes that the transition to recurring service revenues is on track. Fueled by the growing adoption of managed smart home systems from a range of players, including home security, telco and cable companies, and retailers, recurring service revenues will make up close to a quarter of smart home revenues, up from under 20 percent, by the year 2020.
Some of the vendors include ADT, Vivint, AT&T (NYSE: T), Deutsche Telekom, Comcast (NASDAQ: CMCSA), Lowes, and Staples. A number of new self-install devices and systems from startups and technology providers like Google (NASDAQ: GOOG) and Samsung are also fueling recurring revenue services such as remote data collection and storage. During the next five years, security players like ADT will lead the deployment of managed smart home systems, but by 2020 a host of traditional telcos and cable companies and retail offerings will all share similar subscriber bases. ABI said that the ability for those managed service providers to smooth the transition of DIY installations into their managed system subscription services will provide a valuable pathway for much of that growth. Release