Things, unconnected
The Internet of Things (IoT) describes a vision where every object – from spin dryers to dog collars to traffic lights – is connected, enabling a new round of technological innovation and value-adding services to take off.
In recent years the momentum behind IoT has surged, in large part because the current penetration of smartphones (76%) means most UK consumers already own the potential remote control for connected devices.
Suppliers have responded enthusiastically to the IoT opportunity. Major trade shows showcase thousands of IoT products. But mainstream consumers in the UK have so far only tentatively adopted connected devices, as can be seen in Figure 1.
Figure 1. Internet of Things (IoT) adoption among UK adults
Q. Which, if any, of the following devices do you own or have ready access to?
Weighted base: All respondents (4,000)
Source: UK edition, Deloitte Global Mobile Consumer Survey, May-Jun 2015
Home entertainment – game consoles, TVs and wireless speakers – have enjoyed the highest adoption rate so far. There are obvious benefits to having a connected game console and TV, with consumers gaining the ability to watch on-demand television and play online games with players around the globe.
But other kinds of connected devices and appliances likely won’t gain traction with consumers until they offer clear benefits that can’t be gained through other means.
Figure 2. Purchase consideration for IoT devices
Q. Which, if any, of the following would you consider purchasing in the next 12 months?
Weighted base: All respondents (4,000)
Source: UK edition, Deloitte Global Mobile Consumer Survey, May-Jun 2015
Near-term demand for IoT devices appears minimal. However, if these purchase considerations turn into transactions, penetration rates for IoT devices would leap relative to current levels. For example, currently 2% of respondents have a smart thermostat, while purchase consideration is running at three times that amount (see Figure 2).
While the outlook may seem foreboding, consumer demand can surge rapidly – the US market has recently seen a spike in demand for products like wireless speakers and connected cars. But it may be that usage will only spread when suppliers start making connectivity the default option.