According to ABI Research, smart home hardware shipments will grow at a 9.4% Compound Annual Growth Rate (CAGR) to reach more than 1.7 billion devices by 2030.
Leading up to this time we will likely see the smart home market become a base for key activities in the average person’s life, i.e., healthcare, retail, mobility, energy and more. As this shift to smart home management in these areas takes hold, a critical element to its success will be gaining consumer trust. To gain that trust all the devices required to make a home “smart” will be security.
In addition, smart home device manufacturers, as well as software and service providers will have to pay close attention to new government policies and regulations to ensure their products are indeed secure.
Let’s take a look at three of the top segments of the smart home market that will be impacted by this evolution in smart home applications.
We begin with the physical home security market, one of the verticals where the smart home began taking shape. Smart home physical security systems primarily consist of smart doorbells, smart locks, contact and motion sensors, wireless video cameras, and control panels. Home security systems like Ring, Simplisafe and Wyze have risen over the years, becoming some of the top applications in its industry. And while these applications are extremely popular, especially in the U.S., products such as wireless video cameras are prone to cyber intrusions.
Very few in the cybersecurity community have forgotten one of the most noteworthy incidents, the Mirai Botnet, which took place back in 2017. Attackers behind the botnet infiltrated the site of well-known cybersecurity journalist Brian Krebs. The Distributed Denial of Service (DDoS) attack lasted for days, 77 hours to be exact. It involved 24,000 Mirai-infected Internet-of-Things devices, including personal surveillance cameras.
Jumping ahead to this year 2023, in June the Federal Trade Commission (FTC) settled a case with Ring’s owner, Amazon. The online retailing giant agreed to pay the FTC nearly $31 million in penalties to settle recently filed federal lawsuits over privacy violations. The FTC alleged that Ring compromised customer privacy by allowing any employee or contractor to access consumers’ private videos. The FTC also claimed hackers used Ring cameras’ two-way functionality to harass and even physically threaten consumers – including children – if they did not pay a ransom.
These types of incidents clearly illustrate how critical it is to secure devices like cameras in a smart home. But also why it is imperative for device manufacturers to build security from the very beginning to avoid such upsetting occurrences.
Another segment that has strong roots in the genesis of the smart home is energy management. More specifically, smart thermostats, which have become extremely popular for Energy Service Companies (ESCOs) and utilities to enable demand response programs and reduce infrastructure pressure during high demand periods. Last year, more than 140 million were installed worldwide and growth is expected to continue through at least 2030. In the UK, the government has been since last year has stated that all gas and electricity suppliers should “roll out smart and advanced meters to their remaining non-smart customers by the end of 2024.” This will create even more demand, and that is just the UK alone.
All of this expansion in the smart home energy sector will create a broad range of applications and services, such as water heaters, whole-home energy management systems and electrical vehicle chargers. These developers, especially the latter, are intriguing. But the catch is that connectivity of these devices, like anything connected to the IoT, have the potential to be hacked. Not only do these devices need to consider the security of the devices for individual homes, but also broader neighborhoods.
Like physical security and energy management, the healthcare market has the potential for a massive boom in terms of IoT devices in smart homes. Everything from sleep monitors, smartwatches, smart scales, and blood glucose monitors are the type of connected applications likely to be part of a smart home network.
In the U.S., an aging population means there is a necessity to track the wellbeing of people. This is giving rise to applications for Ambient Assisted Living, as well as Personal Emergency Response Systems (think “I’ve fallen and can’t get up” scenarios.)
More generally there will be opportunities in smart homes for additional connected devices that track long term conditions such as diabetes or sleep apnea that require regular monitoring.
What makes healthcare more interesting – and bears watching – is this type of data will likely be subject to compliance worldwide. This will put added pressure on the need to secure these devices. Both the United States and the United Kingdom have proposed legislation specifically regarding the security of connected healthcare devices. The rest of the world will likely follow.
As it is, the medical and healthcare sectors are, unfortunately, one of the biggest targets for hackers. These attacks are deeply concerning yet they continue to happen – and that’s in very controlled environments with large IT staffs with cybersecurity budgets.
But smart home dwellers will not have that level of cyber protection, so it is imperative that the security of IoT applications for the smart home are carefully thought out, and that security of a device is planned from the very beginning.