The business of home automation is enabling the internet of things

If we think about the homes that have a broadband connection today as the total addressable market for home automation, the home automation market size turns out to be around $8.8 billion at $100 spent per home or $880 billion at $10,000 for example in the U.S. If we are a little more conservative and say that only those broadband subscribers who use smartphones are targets, the range turns out to be about $5.63 – $563 billion. In order to capture this opportunity a number of business models have come into play. While these are not new business models, it is interesting to see how this opportunity is being captured.

1. The Free approach
2. Building block sales
3. Piecemeal
4. Integration
5. Subscriptions
6. DIY
 
The promise of double digit sales growth is attracting a number of players, big and small, to the home automation market. As competition heats up and prices decline, business models will evolve. But we will continue to see a wide spectrum of models in use as different players target different segments of the market. In fact players may adopt more than one business model to capture bigger pieces of the pie. 

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