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Consumers Will 'Buy Into' Smart Appliances by 2020
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October 04, 2012

Consumers Will 'Buy Into' Smart Appliances by 2020

By Cheryl Kaften
TMCnet Contributor

Worldwide sales of smart appliances will climb rapidly over the remainder of this decade, reaching just under 45 million units per year in 2020, according to the findings of a report just released by Boulder, Colorado-based Pike Research (News - Alert).

Smart appliances (or “white goods,” in British parlance) are household devices – such as refrigerators, washers and dryers – that use embedded intelligent power management to optimize the residential load on the power distribution grid, as well as reduce energy costs, lower carbon emissions, and provide such advanced features as remote controls.

 Pike analysts predict the smart appliance market holds long-term opportunity and growth. They say that while the segment has been limited in terms of availability and types of products to date, and will continue to be for the next two to three years, the benefits and capabilities of smart appliances will start to attract and persuade greater numbers of mainstream homeowners after 2015.

Continuing investment in smart grid initiatives, declining sales prices and clearer value propositions will make smart appliances more appealing for end-users in the coming years. To utilities, they will offer increased monitoring capabilities and peak demand management.

“Positive growth around the world in the overall household appliance market presents opportunities for the smart appliance submarket, especially with the continuing investment in smart grid initiatives,” commented Pike Research director Carol Stimmel. “However,” she said, “consumers will only be motivated to move to smart appliances prior to their 10-year average replacement cycle, if the appliances have the right price and enable them to save on energy costs. Economies of scale, better technical integration, and the emergence of dynamic pricing are critical elements to realizing the potential of the smart appliance market.”

Several key players in the general appliance market – including Bosch, Electrolux, GE, Indesit and Whirlpool – have pilot programs underway. Others have taken a wait-and-see approach.  These appliance makers are concerned with the size and scope of projects relative to the number of meters being installed. 

Availability of devices and smart metering efforts in the three leading regions of Asia Pacific, Europe and North America will be the primary drivers for smart appliance sales (chart via Pike Research).

With millions of meters deployed, the manufacturers lagging behind would like to see more efforts toward understanding consumer responses to smart appliances and to the overall smart grid. As with many smart grid initiatives, utilities and service providers are learning that positive customer engagement is vital to success.

The analysts also point out that there is an opportunity for an intermediate step that involves smart plugs, which may be able to provide consumers with a way to save money and familiarize themselves with “smart” technology and opportunities.

The report indicates that the highest-volume segments in the smart appliance market will be clothes dryers, clothes washers, dishwashers and refrigerators/freezers. Other smaller market segments, according to the report, will include water heaters, window air conditioning units, and ranges/hobs/ovens.

Finally, control and privacy will remain important to end users. Consumers demand final control over their appliances and want their data to be managed in confidence. Vendors and service providers will have to prove that they can manage data successfully and securely.

The report, “Smart Appliances,” examines the current state of the global smart appliance market, including an analysis of barriers and drivers, enabling technologies, regulatory factors, and key industry players.

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Edited by Braden Becker

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