The smart home market has reached a tipping point with a breakthrough that finally aligns product design with consumer demands.

Consumers are ready for the smart home to go mainstream. They expect their homes to undergo the kind of digital transformation that has redefined their experience when working, shopping, banking or driving their car. Millions of households have taken their first transformational steps, with half of U.S. consumers owning one or more smart home devices in 2021, up from about a third in 2020.

To date, though, consumers' smart home experience hasn't always been positive. Incompatible ecosystems and devices have frustrated homeowners and kept them from investing in the full promise of an automated smart home. Before committing, they are holding out for smart home applications and devices that are more intuitive and consumer-friendly. Specifically, they want plug-and-play devices and networks that require minimal effort to install and operate, as they run in the background securely and trouble-free.

Now a breakthrough in the smart home market is answering these consumer demands, as device manufacturers rally around the new standard for interoperability and performance.

"Matter" Lays the Foundation

The new smart home interoperability standard known as Matter is scheduled to be formally released in the second half of 2022. Product engineers have already had access to open-source Matter specifications to speed their development work, leading product retailers large and small, to stock a host of newly interoperable offerings. And more than 5.5 billion Matter-compliant smart home devices are expected to reach the market between 2022 and 2030.

In parallel, the performance of the Wi-Fi networks over which Matter can run is being accelerated, with Wi-Fi 6E and soon-to-come version 7. These high-performing tri-band Wi-Fi mesh networks are handling more and more devices, at faster rates and with lower latency. As they do, they will soon enable more advanced applications for everything from gaming to remote work to “the next big thing” in smart homes.

In short, Matter and Wi-Fi are providing product engineers with the foundation to design the smart home’s next generation, as product retailers also gain confidence that they can readily reach a critical mass of customers. Clearly, that market is building: nearly 900 million smart home devices shipped worldwide in 2021, representing growth of 11.7% over 2020, a market research firm reported, adding: “As we look ahead, and buoyed by strong demand, the market is poised for solid growth despite ongoing disruptions from supply chains, logistics, and uneven economies across the globe.”

First-Generation Smart Home

The smart home has a lot of catching up to do. Consider this: your car has several smart features, but your house does not. You take it for granted that you have central door locking in your car. But when you leave through the front door of your house, how do you know if you've locked the back door? A car also senses and provides an alert when you've forgotten to buckle your seatbelt. Many can automatically adjust the seats, mirrors and air conditioning to suit your driving preferences when you get in – and readjust those settings when another driver uses the car with their preferred settings. And those are just entry-level, basic features in the run-up to self-driving cars.

Why can't your home be more like your car? The answer has to do with standards. For instance, you may control your smart home lighting from one app on your phone, but you need a different app for temperature control — and often, different sensors in every room for both. The smart home ideal, in contrast, would centralize control and could even automate your smart functions. A single bedtime routine might turn off the lights, lower the blinds, adjust the room temperature to your stated preference, lock the outside doors, shut down the rest of the house, tell you where the dog is and turn on your baby monitor.

While some of this might be doable today, within a single smart home manufacturer's ecosystem, the options may be limited and the “best of breed” products for each part of your routine probably don't work together.

With Matter, the smart home is evolving from this disconnected array of point solutions and islands of incompatibility serving early adopters to an ecosystem catering to mainstream consumers' needs.

Smart Home Market Drivers: Interoperability, Remote Work, Even Climate Awareness

The Matter standard will play a pivotal role in the smart home's growth, as this interoperability breakthrough solves one of the biggest barriers to smart home adoption. Other market drivers range from new pandemic-era habits to mounting climate awareness, as follows:

• Interoperability: Smart home technology has long been in a state of disarray, as we describe in a more detailed article on Matter and Wi-Fi standards. Matter will resolve the current confusion of myriad standard and non-standard systems, devices and applications that don't work and play well together. The interoperability it brings, in turn, will unlock benefits for product retailers and designers including economies of scale and the ability to focus on innovating the next generation of smart home networks and devices.
• The pandemic and remote work: The pandemic changed people's relationships with their homes. A study by a large global smart device maker found that 51% of consumers purchased at least one smart device as they began spending more time working and learning remotely while sheltering in place. In healthcare, for instance, at-home symptom monitors and other wearables were connected with smart hubs – sometimes to reduce in-office medical visits during the crisis. Many habits catalyzed by the pandemic have actually become the new normal.
• Consumer trends: The pandemic changed people's relationships with their homes. A study by a large global smart device maker found that 51% of consumers purchased at least one smart device as they began spending more time working and learning remotely while sheltering in place. In healthcare, for instance, at-home symptom monitors and other wearables were connected with smart hubs – sometimes to reduce in-office medical visits during the crisis. Many habits catalyzed by the pandemic have actually become the new normal.

Breaking Down Smart Home Barriers

There's a reason interoperability is listed above as the primary market driver. To date, major players in the smart home market have created islands of incompatibility in people's homes, holding up adoption.

The technology fragmentation in the U.S. has become so challenging that 24% of households with smart home devices had to hire a professional to install them. Now, however, hundreds of smart home manufacturers large and small support Matter for interoperability, and many have announced Matter-compliant products for release in the coming months.

The development of Matter has also targeted another source of consumers' hesitation: privacy and security in the midst of the current global wave of cyberattacks on businesses and individuals. The Connectivity Standards Alliance (CSA), whose members developed Matter, recently described the cybersecurity principles, practices and technologies embedded in the standard, concluding that, “Matter was created with security and privacy as key design tenets.”

Barriers like these are falling for several reasons, from the emergence of Matter to consumers' desires to expand their smart home ecosystems and seek more sophisticated connected experiences. In fact, a Realtors survey revealed that over 60% of homeowners and renters want additional smart home features.

Next-Generation Smart Homes: What Will You Create?

Smart home product developers can use the powerful combination of Matter and Wi-Fi to innovate beyond standard applications such as smart speakers, thermostats and door locks.

For example, experts suggest that the future will turn the smart home into an environment hosting augmented reality, virtual reality and high-definition multimedia gaming. In such a scenario, working from home could also incorporate augmented reality for remotely monitoring a factory floor. Among other innovations, invisible headphones can operate via Wi-Fi and a smart speaker to beam sound that surrounds the listener without disrupting other members of the household. And academics speak of smart homes on smart grids regulating dynamic flows of energy to, from and throughout the house and the electric vehicle in the garage.

The Outlook

The advanced applications above represent only the tip of the iceberg of innovation that product designers will be able to create, once they have an interoperable, high-speed, low-latency platform for smart home networks and devices.

We are witnessing nothing short of a breakthrough in the evolution of the smart home. Within two years, today's islands of proprietary technologies will be a thing of the past, as Matter opens avenues for full interoperability across systems and devices. By giving consumers a seamless experience, on powerful Wi-Fi networks, Matter will usher in the smart home 2.0.