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Connected Homes September 2018 Viewpoints

Technology Analyst: Michael Gold

Weather and Environmental Sensing

Why is this topic significant?

A fragmented market supplies devices that sense and use information about weather and environmental hazards. Improved capabilities could drive increased adoption among property owners who want to save energy, populations that are vulnerable to incidents of poor air quality, and other residential users.

Description

Outdoor sensors for weather and other environmental conditions play various roles in connected homes.

  • Personal weather stations are for hobbyists and a number of vertical markets. Small farmers can use the stations to help make decisions about irrigation and measures to respond to frost, wind, and various conditions that can promote pests. Retail outlets for boat and aircraft owners also sell the stations. Vendors include AcuRite, Davis Instruments, Elgato, La Crosse Technology, and Netatmo. IBM's Weather Underground service logs more than 250,000 personal weather stations in the United States and a further 6,000 such stations elsewhere in the world, assisting people who live in microclimate zones and who might otherwise lack accurate forecasts.
  • Connected irrigation systems are for property owners and some renters. Wi-Fi connections enable remote control by people and by cloud services. Some units work with a rain gauge; others rely on a weather-information service. Products sold in the United States that have a WaterSense logo use weather information to suspend irrigation when rain has occurred or is likely, and many work with mobile apps. Dozens of suppliers have achieved WaterSense certification by demonstrating water savings under real-world conditions involving rainy days. Vendors include hardware start-ups and brand-name lawn-care companies Rainbird and Scotts.
  • Outdoor sensors for heating, ventilation, and air conditioning (HVAC) systems help some homeowners and owners of large apartment houses save energy and improve comfort. Outdoor temperature and humidity sensors help controllers maximize use of fresh air and respond proactively to weather conditions. But implementation can be complex, and system designers often do not take advantage of the technology.
  • Outdoor particulate sensors can warn of hazards such as smog, dust storms, and pollution from forest fires. A mix of retail and prosumer brands includes Air Mentor, Dylos, MCO Home, PurpleAir, Speck, Unilever (Blueair), and Wicked Device (Air Quality Egg).

Implications

Analysts at Technavio recently estimated that the worldwide market for home weather stations and rain gauges accounts for about $110 million annually—about half from North and South America. Total revenues enabled by home weather and environmental sensing could be double to triple that number after accounting for residential use of connected irrigation systems, HVAC outdoor sensors and controls, and air-quality monitoring sensors. Also, some manufacturers do not emphasize weather-controlled aspects of their WaterSense-compatible products. Unlike having a rain-gauge or soil-sensor system, a user might have a weather-controlled system without realizing it.

Impacts/Disruptions

Poor air quality in some places motivates purchases of particulate sensors. After recent forest fires, California recently experienced mixed success of its sensor networks; data gaps there and elsewhere might motivate market growth. Various people are candidates to adopt the sensors, including allergy sufferers and people who live near industrial plants. Also, a niche of citizen scientists uses various do-it-yourself and economical professional instruments for air-quality monitoring; their ranks could grow as equipment becomes more affordable.

Outdoor sensors for pollutants other than particulates are mainly for professional, industrial, and scientific uses, not residential uses. Also, pollen sensors are not widely available and have room to improve. Technology developers might close such gaps in the future.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: Medium

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: 10 Years

Opportunities in the following industry areas:

Sensor manufacturing and packaging, optoelectronics, optical components, retail electronics, lawn and garden care, weather-information services, professional instrumentation and metrology, geospatial databases and database management, epidemiology, public-health agencies, process industries

Relevant to the following Explorer Technology Areas:

Subscription Services

By Sean R. Barulich
Barulich is a senior research analyst with Strategic Business Insights.

Why is this topic significant?

A rapidly growing set of subscription services provides households a convenient method for accessing a wide range of physical and digital goods.

Description

Subscription services attempt to streamline the delivery of curated products through recurring deliveries or digital goods through on-demand access. The subscription-service market has grown rapidly. According to a McKinsey & Company survey, 15% of online shoppers have one or more e-commerce subscriptions, and the market for subscription services has grown by more than 100% per year in the past five years. Subscription services that provide on-demand streaming media have been the most popular with households, but competition is increasing. Netflix, with roughly 125 million subscribers, faces growing competition from streaming services including Amazon Prime Video, Hulu, and HBO Go. Spotify has led the streaming-music market with approximately 80 million paid subscribers. However, Apple, Amazon.com, and Google are providing competing services. Subscription services that provide customers with recurring deliveries of physical goods include curated services—such as BirchBox, Ipsy, Stitch Fix, and Loot Crate—that send households packages containing a variety of items that the service providers select. Other physical-goods subscription services—such as Amazon Subscribe and Save and Dollar Shave Club—provide recurring deliveries of items that customers select, such as coffee beans, toilet paper, or razor blades. Meal-kit services—including Blue Apron, HelloFresh, and Home Chef—provide recurring deliveries of fresh ingredients for home-cooked meals. And hybrid services—such as Peloton, a fitness company with a value of over $4 billion—sell physical goods that interface with digital subscription services. Large brick-and-mortar retailers—including Walmart, Target, Old Navy, and J. C. Penney—have noticed the growth of e-commerce subscription services and have also invested in developing such services.

Implications

Subscription services provide households with a convenient way to receive digital and physical goods and reduce some friction in transactions. However, many services struggle with long-term customer retention and profit generation. Companies offering subscription services for digital goods also face growth challenges, because it is difficult to grow revenue per user, and thus companies have to focus on increasing subscriber numbers in order to drive growth, which in turn makes companies vulnerable to market saturation. Video-streaming services are also disaggregating, as content owners increasingly establish their own services to stream their own titles. As a result, households must increasingly subscribe to multiple streaming services to experience all the content that their members wish to view.

Impacts/Disruptions

In the future, subscription services that replenish common household goods such as groceries may have enduring popularity because of their flexibility and convenience. Such services may also encourage users to commit long term to certain brands because consumers lose some exposure to competing products. Amazon and Walmart may have an advantage thanks to the wide range of products they can provide to consumers. As the subscription-service market develops, users might become more willing to try or subscribe to multiple services. Alternatively, users may become overwhelmed by managing multiple subscriptions and prefer single, all-in-one subscriptions for consuming both digital and physical goods.

Scale of Impact

  • Low
  • Medium
  • High
The scale of impact for this topic is: High

Time of Impact

  • Now
  • 5 Years
  • 10 Years
  • 15 Years
The time of impact for this topic is: Now to 5 Years

Opportunities in the following industry areas:

Software development, brand management, curated commerce, advertising, influencer marketing, content-delivery networking, logistics

Relevant to the following Explorer Technology Areas: