Survey: IoT, Wearables Market Set for Explosive Growth

The market for Internet of Things (IoT) devices and appliances is due to explode over the next several years, with 69 percent of U.S. consumers planning to buy network-connected technology for their homes by 2019, according to a new study by Accenture.

At the same time, sales of wearable technology like smart watches and fitness bands are expected to initially grow faster than the market for connected appliances in the home but somewhat slower over the longer haul, Accenture said. The global management consulting and technology services firm found that under half of respondents planned to purchase a wearable device in the next five years, but a full 22 percent said they already own one or will buy one by 2015.

What's really promising for makers of both home IoT devices and wearables is that not just tech-savvy consumers but even many self-described "late adopters" plan to purchase such products by 2019. Some 78 percent of late adopters surveyed by Accenture said they'd be buying a home IoT product in the next five years, and 62 percent planned to buy a wearable in that timeframe.

Accenture's Acquity Group surveyed more than 2,000 consumers across the country for the Acquity Group 2014 State of the Internet of Things Study, the results of which were released this week.

"These digital devices present major opportunities for improving a brand's customer experience for a range of consumers. Our data reveals that it's not only tech enthusiasts who are interested in these kinds of products, but late adopters who also express interest in buying them," Acquity Group president Jay Dettling said in a statement.

Respondents indicated that sales of home IoT products are set to grow rapidly over the next five years but also in the near-term. Accenture reported that 13 percent of U.S. consumers "will own an in-home IoT device such as a thermostat or in-home security camera" by the end of 2015, more than tripling the 4 percent of those polled who said they currently own such technology.

Patrick Moorhead, lead analyst for Moor Insights & Strategy, called IoT "one of the bastions of technology growth," but also tipped some challenges ahead.

"On the whole, most devices today aren't connected nor are they intelligent. By connecting devices ranging from fitness wearables to devices inside the home, I am expecting huge growth over the next five years," Moorhead said.

"There are challenges ahead, though. Wearables are far too geeky looking, too hard to use, and don't have nearly the battery life consumers expect. The connected home is now being invaded by warring standards bodies and companies trying to get the upper hand by using different kinds of judo. These standards need to solidify, or consumers won't want to have to deal with a mess of incompatible devices."

The analyst's point about "geeky looking" wearables was corroborated by the Accenture survey. Of all the wearables and smart home products queried about in the poll, respondents made it clear that smart clothing and heads-up displays were the IoT category likely to "see the least overall adoption," Accenture said.

Just 3 percent of those polled said they would be buying smart clothing or a heads-up display this year or in 2015, while just 14 percent planned to buy smart clothing sometime in the next five years, and just 16 percent said the same of heads-up displays.

Two major smart home product categories look to be poised for much more robust growth. Accenture found that 13 percent of respondents intend buy a smart thermostat for their homes in the next year and 43 percent aim to do so by 2019. Some 11 percent of those polled said they'll be installing connected security systems this year or in 2015, while 35 percent said they would do so in the next five years.