The smart home industry has enjoyed tremendous growth in the last three or four years, but it has yet to realize its full potential. Friction abounds and there are a number of fundamental challenges preventing consumers from fully investing. Can these problems be overcome?

5 challenges that need to be addressed

By 2020, research shows that the smart home market is only in the United States. Yet despite this, there is still untapped potential due to five pressing challenges. Until it is fixed, this market will remain a mere shadow of what it could be. Let's explore in more detail:

1. The "creepy" factor

In theory, smart technology is attractive. There is something interesting about being able to control and track various aspects of your life. But there is also something a little creepy about this level of knowledge.

“When you start tracking your water usage, you suddenly realize how often your spouse flushes the toilet or does the laundry,” director of corporate sensing and insights in Intel's corporate strategy group. "There's something slightly creepy about [people's] houses who know things about them."

It is up to technology companies to put security measures in place to assure consumers that their privacy is respected. It's also a good idea to give owners control over what information is accessible. This allows each individual to manipulate the amount of information that he has at hand.

2. Owner vs. Tenant

Real estate investors and owners are also integrating advanced features into their properties. But this latest development is tied to friction and uncertainty.

tenants have raised concerns that landlords may use these devices. tools maliciously or as a means of harassment, and proposals to equip some larger properties with smart home tools have drawn protests.”

For smart home technology to become a mainstay in rental properties, there needs to be some safety nets. Anything with a camera or voice recording device is not ideal. 

3. Compatibility

There is too much fragmentation in the smart home space. Most homeowners won't bother downloading seven different apps to control the technologies in their homes. Instead, they want computability and interconnectivity. There is some progress in this area, but much remains to be done.

4. Security vulnerabilities

Security issues are plentiful. For example, consider all the things a smart light bulb knows about you:

  • It knows when you are at home and when you are away.
  • It knows when you are in a certain place.
  • Know your daily habits and routines.

These don't seem like major issues, but they do become problematic when information ends up in the wrong hands. Unfortunately this happens

5. High cost

The price of most smart home technologies is still too high for mass adoption. While the higher end of the market is fine making an investment, the majority of the market is looking for something more profitable.

However, we are seeing positive movement in this regard. Amazon and Google, for example, have really pushed their voice-activated virtual assistants in the last 18 months. And at a price of less than $30, this has allowed millions to experience a small slice of the smart home pie. 

The future of the smart home

However, despite this, there is still a lot of untapped potential.  Over time, a proactive approach to these sticking points will benefit everyone, including homeowners, landlords, renters, business owners, retailers, and the entire consumer market as a whole.