More than a half-century ago (1962), television audiences got a glimpse of the IoT-enabled home of the future. There was no Internet, and the first commercial microprocessor was still a decade away. Yet “The Jetsons” showed a version of the future that IoT technology now puts within reach. This includes smart machines that can respond to spoken commands, vacuum cleaners that guide themselves, and domestic robots to assist in food preparation.
Potential economic impact
In the home, the Internet of Things has the potential to create an economic impact of $200 billion to $350 billion annually in 2025. Promising uses are chore automation, energy management, safety and security, usage-based design, pre-sales analytics, and personal loans (Exhibit 13).
Household chores today take up the equivalent of an estimated $11 trillion a year in consumer time, a figure expected to reach about $23 trillion in 2025.28 We estimate that smart appliance that can operate independently to complete tasks such as vacuuming floors and chopping food can reduce that workload by 17 percent. With sensors, computing power, and Internet connections, home appliances can do more than offload work from humans; some may even be able to predict what the homeowner needs. Smart home appliances could gather data about daily usage patterns and, with additional data and analytics on the Internet, determine the household’s preferences and begin scheduling their own work routines—mowing the lawn every Saturday morning,
Using sensors and predictive algorithms, smart thermostats can detect when no one is home and adjust the temperature to conserve energy. Over time the smart thermostat could learn about usage patterns and adjust heating or cooling to have the home at the right temperature when residents are due home. Connected Washers and dryers (working with smart meters installed by utility companies) could get information about energy prices to delay cycles during peak energy consumption periods.
Safety and security
oT sensors and systems can greatly reduce losses to consumers from break-ins, fire, water leaks, and injuries in the home. Combining sensors, cameras, and powerful analytics, future IoT systems could sense when inhabitants are at risk and issue alerts to fire, police
As in other settings, the opportunity for makers of home appliances and other equipment to monitor (and even improve) the performance of their products after sale provides an invaluable source of data for future product improvements. Home appliance usage data could be captured to help understand how consumers employ the product and use the information to improve performance and eliminate underutilized features. In the home setting, we estimate that such usage-based design could create value of $3 billion to $17 billion per year. This is based on the assumption that usage-based design could increase margins by up to 7 percent, through better product design.
By analyzing IoT usage data gathered from household devices, manufacturers could determine whether the consumer is a good prospect for upgrading to another model or might be inclined to buy another product or service. Based on how the customer is using one appliance, such sales opportunities could be worth nearly $5 billion per year.
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While the ability to hand over household chores to smart devices is undoubtedly an attractive idea, consumers may be hesitant to embrace IoT-based systems if they feel that their privacy and data are at risk. Technology and service providers will need to prove that customer data are protected and will not be used in ways that the customer does not want—sold to third parties for unwelcome marketing leads, for example. Vendors will need to be careful never to appear to be violating the sanctity of the home. Given the amount and private nature of data captured, security for IoT home management systems would need to be robust to prevent criminals from gaining access—physically or electronically—to homes