Who’s afraid of smart home?

51% of Italians, according to data from the Internet Of Things Osservatorio of the School of Management of Politecnico di Milano. What is the reason for this concern? Privacy and data management. The smart home device boom will have to overcome this obstacle, but GDPRs and insurances can help.

Published on 31 May 2018

With a growth of 35%, the Italian market of smart home solutions has confirmed its growth trend also in 2017, as reported by the Internet Of Things Osservatorio of the School of Management of Politecnico di Milano, which has been monitoring the market in recent years.

Hardware and software solutions aimed at making the home safer, greener and more comfortable are improving and increasing. The distribution channels for smart home products are also improving, as they are becoming easier to install, “do it yourself” and therefore easier to be sold through e-commerce; the number of insurances offering home security policies associated with connected devices is increasing. And the number of utilities, telco, retailer and eRetailers entering this market is also growing, so far not a priority for them.

Google Home is the first virtual assistant to enter Italian houses, since last March 27th, beating Amazon’s Echo and Apple’s HomePod, currently present only in the U.S. and a few other markets, but among these big tech companies the fight is already underway, especially between Amazon and Google, which do not mind sucker punch: Amazon has decided to no longer sell any of the new products of the intelligent home division of Google Nest. Amazon currently sells a limited number of Nest products, but these will disappear from the site once the ‘warehouse’ is sold out. Nest, for its part, replied by not working anymore with Amazon. Amazon’s decision seems to have come in response to the fact that last February Nest, a manufacturer of smart appliances that managed its business as a subsidiary of Alphabet, announced it had been taken over by Google to work with the Google division on AI, a decision that leads Nest to strengthen its technology and, therefore, to be an even more feared competitor for Bezos’ company.

The smart home market is hot, very hot, the competition will be broad and tough.

Meanwhile, however, there is still a problem to solve: the consumer’s point of view. If until some time ago, products were unreliable, complex or too expensive to brake purchases, today it is another reason, a reason that can be very restraining: fear for one’s own data.

According to the report on smart home by the Internet Of Things Osservatorio of the School of Management of the Politecnico di Milano, 51% of Italians are worried about their privacy and have little confidence in terms of cybersecurity.

This kind of mistrust has increased in recent years, says the report. “Alongside the knowledge (of smart home solutions), however, there is a growing awareness of the issues of privacy and data security. While up to three years ago only 27% of consumers were reluctant to share their personal data (mainly because of the risk that the purposes for which it was used might differ from those claimed), in recent years this percentage has increased considerably, reaching 44% a year ago and 51% at the end of 2017”.

It’s hard to argue in the light of the recent Facebook-datagate: a news story that has finally pierced the veil on the ease of some online site managers and digital companies in dealing with the data of their users. People’s awareness of privacy will increase further.

However, put a bright spin on things: in Italy and Europe, the forthcoming implementation of the GDPR will enable citizens to be better protected and will place specific obligations on companies, including those based outside Europe, but processing data of European citizens. Google Home and any other device wishing to enter Italian homes, will have to deal with the GDPR.

In addition, this fear can divert consumers to choose brands and companies they know and rely on, such as insurance companies. The 51% of people who fearfully look at connected devices are likely to be more willing to bring them into their homes as part of an insurance policy. In Italy there are currently nine insurance companies that offer home policies that leverage the presence of related objects (there were six in 2016), covering 50% of the domestic insurance market – non-life segment (only 11% in 2016).

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