Report Says Smart Appliances Reaching a Broader Audience this Year
Jun 5, 2003
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While the smart appliance industry is not growing by leaps and bounds in terms of unit shipments, it includes an ever-growing number of products by a variety of companies, according to a report from In-Stat/MDR. The high-tech market research firm finds that, even though the economic conditions of the past 2 years have put many projects on hold and have lowered consumer spending, the overall Compound Annual Growth Rate (CAGR) for smart appliances will be 53.4 percent from 2002 to 2007.

The firm divides smart appliances into two main categories: Internet-enabled consumer electronics and white goods. Internet consumer electronics include audio products, picture frames, analog Internet TV, and e-mail devices. The white goods segment is divided into major and portable appliances. In addition, this year will also see the first Smart Personal Objects Technology (SPOT) devices.

"The market for smart appliances is affected by drivers such as Internet access, home networking, education and price," said Cindy Wolf, an industry analyst with In-Stat/MDR. "There is a growing interest in digital entertainment products and housing developments with built-in connectivity are also on the rise. These factors will also influence the adoption of smart appliances."

However, many of these products require a broadband connection or need to be included in a home network, therefore limiting the size of the market. According to Ms. Wolf, "Successful products will have features that are compelling to users and it will be easy to see how the connectivity adds value to the product and the consumers' lives. Overall, as more and more homes gain access to broadband and home networking, the demand for networkable devices, such as smart appliances, will inevitably grow."

In-Stat/MDR has also found that:
In addition to features, education and price, other issues affecting manufacturers include connectivity platforms, software, and standards.
In the early part of In-Stat/MDR's forecast, e-mail devices make up the greatest part of the total smart appliance units. By 2007, the product segments become more evenly divided.
The white goods segment, as a whole, will experience the highest CAGR, 95.4 percent, over the period. However, unit sales for white goods will be low for a few years due to the competitive nature of the industry and a reluctance to enter the market too quickly with a product that consumers have yet to demand.
This year we will see the first SPOT devices. These products, the first of which will be watches, will use DirectBand technology to access Internet content rather than more traditional methods. Microsoft expects SPOT appliances to appeal to a very large audience, because they are focused on everyday objects that people already find useful.

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