Consumers in Australia are forecast to boost spending on internet-connected devices for their homes by 66 per cent this year, with the market for Internet of Things (IoT) devices expected to reach AUD4 billion ($3.1 billion) by 2020.
Telsyte predicts that early adopters in the country will spend about AUD383 million this year on IoT devices that control everything from security cameras to heating and cooling systems.
The firm estimates that the average Australian household will have 11 connected devices this year, up from 9.2 last year, and hitting 28.7 by 2020.
Growth is expected to accelerate in 2018 as a range of new products come onto the market and manufacturers integrate wireless chipsets into the majority of their product ranges. The fastest growing segments are expected to be smart appliances and IoT@home services (see chart below, click to enlarge), which include cloud-based “intelligent” services. The smart energy sector is forecast to grow 64 per cent annually to nearly AUD1 billion by 2020.
Integrating with existing mainstream smartphone and app ecosystems will be critical for rapid adoption of IoT@home technologies.
Despite the expected rapid adoption, Telsyte said barriers such as concerns around cyber security and privacy, and high upfront costs, will need to be overcome.
IoT@home is expected to be a new battleground for telecoms companies as they seek to differentiate themselves in an increasingly price competitive marketplace driven by widespread 4G adoption and the metropolitan rollout of nbn services.
“While carriers will seek to lock consumers into longer-term contracts by dangling the IoT@home carrot, they will need to be more flexible and look at trial periods, pay-as-you-go, and a modular approach to be successful,” said Telsyte MD Foad Fadaghi.