Smart appliances: To connect or not to connect?


The smart home device market is set to boom over the coming years, but just how many customers will actually connect these devices to the internet?

From Ring doorbells to intelligent fridges, smart devices are becoming increasingly ubiquitous in homes around the world. Last year alone, three quarters of Americans purchased a smart home device, with the average number of home devices continuing to climb steadily year-on-year.

This growth has led to attractive market forecasts, with most analysts predicting a double-digit CAGR over the coming five years. Fortune Business Insights, for example, estimates that the smart home market will be valued at $380.52 billion in 2028, up from $99.89 billion in 2021.

Clearly, there is an enormous appetite for smart home devices, but this impressive growth rate begs the question: just how many of these devices are actually connected to the internet?

Naturally, for some smart devices, remaining connected to the internet is paramount to their functionality; a smart doorbell, for example, is of relatively little use if it cannot connect to the customer’s phone to inform them when a visitor is at their door.

But, for other smart devices, being connected to the internet is not strictly necessary. This is particularly true for smart appliances, where, in many cases, the connectivity is extraneous to its primary purpose. A smart washing machine will still wash your clothes and a smart refrigerator will keep your food cold, regardless of whether you told them to do so via a phone app.

Perhaps it should come as no surprise, then, that many of these devices actually end up disconnected from the internet over the course of their lifespan in customers’ homes.

Speaking to the Wall Street Journal, South Korean electronics manufacturer LG recently revealed that fewer than half of its smart appliances remain connected to the internet.

The manufacturer noted that these devices are typically connected to Wi-Fi when first installed, but if this connection is lost – for example, due to a change in internet provider – they are often left disconnected.

Part of the issue here is that the benefits the customer receives from having these devices connected is considered too small compared to the inconvenience of having to reconnect them to the Wi-Fi. While for LG having these devices connected to the internet provides them with a wealth of invaluable consumer usage data, the direct benefits for the customers themselves are often more limited – especially for appliances that customers are used to operating manually.

“The challenge is that a consumer doesn’t see the true value that manufacturers see in terms of how that data can help them in the long run. So they don’t really care for spending time to just connect it,” explained Henry Kim, the US director of ThinQ, LG’s smart platform, which allows you to control numerous smart devices via a single app.

This issue represents more than just a customer experience challenge for these manufacturers. The data generated by these devices is paramount in the creation of new services and revenue streams, at a time when manufacturers are already being squeezed by a strained global economy and supply chain issues.

Thankfully, to a certain extent, manufactures can overcome these connection issues themselves through technical innovations, such creating improved antennae that remain connected more easily or protocols that help the devices reconnect themselves.

However, more complicated challenges remain, from creating meaningful benefits for customers to ensuring that their data secure and their privacy respected.

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