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21 January 2019

Twenty-two million smart homes in Europe: from science-fiction to reality

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Energy-saving devices and ‘smart speakers’ are selling in record-breaking numbers, and driving hi-tech market development. However, obstacles remain due to a lack of digital skills among consumers and inconsistent service level

Door locks that open with fingerprints, networked security cameras, smart light bulbs, smart washing machines: technology is transforming our homes, turning the tech dreams of yesterday into the reality of today.

As smart technology spreads, a typical family home could contain more than 500 smart objects by 2022, forecast Gartner, a consultancy company. The intelligent home will be an area of dramatic evolution over the next decade, and will offer many innovative digital business opportunities to organisations that can adapt their products and services to exploit this burgeoning sector.

North America is still the leading market for smart tech, but Europe is catching up. The number of homes in Europe with devices working on the so-called Internet of Things (IoT) reached 22.5 million at the end of 2017, according to a research report from Berg Insight, a market analyst. Growth in this booming sector is forecast to reach 84 million homes in Europe at the end of 2022, representing a market penetration of 35 percent, and to generate an overall European turnover of €13.3 billion in a couple of years.

Germany, the UK and France are the leading countries in Europe, followed by Italy and Spain according to Giulio Salvadori from Osservatorio Internet Of Things, School of Management, Politecnico di Milano.

The market for smart home tools and services worldwide is expected to generate opportunities worth €85 billion by the end of 2025. With the prices of sensors and processors dropping, the automation of homes to save energy is becoming increasingly popular in urban households. Smart thermostats are among the most popular tools: the number of homes equipped with them in the EU will jump from four million in 2017 to 22 million in 2020.

EU research funds are both spurring and following the market trends in this sector. In Spain, the University of Mondragon, part of a consortium leading the CITyFiED project that focuses on energy saving in residential buildings, has developed an app that collects data on domestic water, electricity and heating use of apartments in the district of Laguna de Duero in Valladolid.

It’s an ICT solution that contributes to increasing an awareness of energy efficiency among residents. The app provides information about energy consumption and recommendations on the most appropriate time to use an appliance, or suggestions on when to turn down the heating.

Professor Felix Larrinaga, of the electronics and computing department of the University of Mondragon, explains: “The process involved different disciplines, from the design department, ICT architecture and database experts, software developers, and experts on energy. Several workshops and tests were conducted with Torrelago’s residents to measure user acceptance of the proposed solutions. The experience was shared with other pilot cities, including Soma in Turkey and Lund in Sweden, and with the all project’s partners.”

In Italy, the Politecnico di Milano estimates that use of smart devices for heating could lead to energy savings of up of 28 per cent for a family with children. “The widespread adoption of smart solutions for heating, for instance in the urban area of Milan, would reduce carbon dioxide emissions by over 54,000 tons of CO2 per year, with positive impacts on the environment and with an annual saving of €70 million for citizens,” says Giulio Salvadori.

However, the mere existence of smart tech is no guarantee that it will lead to transformative changes in behaviour. Salvadori adds: “Among the consumers that bought smart devices, only 15 per cent regularly use the smart features of their devices. The consumer’s choices are driven more by the general properties of the appliances than by the smart functions”.

In the Politecnico di Milano study on the smart home market in Italy and Europe, the lack of digital competence of consumers is considered one of the barriers to development of the market. Seventy per cent of consumers requested the assistance of a professional to install the devices, even if they are designed, as far as possible, to be installed by consumers themselves. Other barriers include a lack of services, often limited to the management of data in the cloud, and a lack of compatibility among different smart appliances.

“The consumer needs to understand better the added value of the smart functions of the devices,” explains Salvadori. “However, the possibilities of the market are clear from the boom in sales of smart speakers worldwide from 8 million in 2016 to 56 million devices sold in 2018, with Amazon Alexa and Google Home leading the sector”.

The two web giants want to increase their leadership in this field, focusing on services related to their core business. Amazon Echo and Alexa assist the user with shopping online, while Google Home provides information from real-time weather to sports results. Smart speakers are increasingly developing better interoperability with domestic smart appliances such as lights and heating systems. Amazon Echo and Alexa can ‘talk’ to more than 20,000 devices across 1,200 different brands, according to the study. Google is catching up, pointing out that its assistant now works in 30 languages and is available in 80 countries. 

Experts from the Forbes Technology Council agree that the industry has to develop better cross-compatibility standards to allow appliances to work together better. Tyler Shields, a Security Technologist says: “Voice control of technologies that are included in your phone, TV, home audio and even car dashboard will be commonplace” and will be “the breakthrough advancement that really allows these technologies to become ubiquitous”. provides its content to all media free of charge. We would appreciate if you could acknowledge as the source of the content.