Home business opportunity knocks for consumer IoT suppliers

As they look for growth in markets disrupted by the Covid-19 pandemic, internet of things (IoT) suppliers are set to see 9.8% annual growth for shipments of wearable bands, smart personal audio devices and smart speakers, which will reach a total of 718 million units in 2020, according to research from Canalys.

The analyst said these three major device categories will form an extension to IoT ecosystems deployed by smartphone and platform suppliers such as Apple, Google, Amazon, Samsung, Xiaomi and Huawei. And even though a strong downturn is expected, Canalys believes suppliers have become more proactive to make sure they can weather these challenging times.

It noted that as people are increasingly stuck at home, consumer IoT suppliers are actively shifting focus to help users work and learn remotely, remain connected with friends and family, and stay active and entertained during the lockdown.

Smart speakers, such as Amazon Echo and Google Nest, are seen as ideal to support the boom in conferencing technology driven by home working and are a complementary technology for voice-over-LTE (VoLTE) applications, enabling IP-based voice usage that has a measurable quality of service.

The Canalys survey calculates that the smart speaker market will see 1.5% annual growth, wearable bands 3.8% and smart personal audio 15.5%.

“Hearable vendors still shipping devices via online channels have quickly shifted their marketing messages to highlight key benefits, particularly their conference calling abilities,” said Canalys research analyst Cynthia Chen. “Consumers are looking for wireless audio devices that offer flexibility for work, education and play.

“More time spend sitting around means there’s also an opportunity for wearable band vendors to increase engagement with users by promoting access to premium workouts and the accompanying devices that help them stay active.”

While the Covid-19 pandemic spreads and hotspots move to Europe and the US, Canalys cautiously expects Covid-19 to be under control by the third quarter. Regionally, the survey predicts smart speaker shipment growth of 5.3% in Asia-Pacific, 12.4% in Greater China and 5.1% in Latin America. By contrast, Europe, Middle East and Africa (EMEA) and North America are forecast to see falls of 9.9% and 7.7%, respectively.

“China will be a key growth driver in 2020 as the country is confident that the pandemic is well under control,” said Canalys senior analyst Jason Low, commenting on the findings in the research. “Based on our first-hand experience in China, the government’s strict regulatory measures have contained the spread of Covid-19.

“With safety measures in place to prevent its re-emergence, economic activities will resume quickly, and consumers will start to spend again. The same is likely to happen in other countries when countermeasures kick in.”

Yet despite its general optimism, Canalys cautioned that the biggest challenge facing industry players is likely to stem from economic uncertainty. “From supply disruptions to demand shock, many companies are well informed about the significant challenges they are facing right now,” said Low. “Vendors must take additional actions to mitigate the impact.Wait and see’ is no longer an option.

The pandemic will be the critical moment that splits future market leaders from laggards, depending on the actions companies take now. In addition to more proactive and targeted marketing to stay connected with consumers, it is a good time to form new partnerships, for example with new online service and content providers, to grow user bases for both parties with additional services targeting stay-at-home consumers.”

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