Different Environment
According to related industry sources on March 12, mobile carriers, home appliance producers and construction companies will form an integrated alliance as early as by the end of this month.
The alliance will be participated in by home appliance companies, such as Samsung Electronics and LG Electronics, mobile service providers, large construction companies and the Korea Electronics Technology Institute (KETI). They will interconnect home appliances one another, promote sales and develop joint business models in order to create the domestic smart home ecosystem. Many companies have decided to enter into partnership because the smart home sector calls for a combined effort that one company cannot make it on its own, although the smart home system is getting the spotlight all around the world and is emerging as a new future growth engine.
According to data from market research firm Strategy Analytics (SA), the global smart home market has grown by 18.4 percent a year on average from 2014 and it is expected to worth US$111.5 billion (128.84 trillion won) in 2019. Its domestic market marks a steep growth as well. The Korea Association of Smart Home expects that the market will enjoy 22.2 percent growth each year over the same period and it will reach 23.4 trillion won (US$20.25 billion) in 2019.
Smart home is an industry with strong growth potential but it is difficult to provide services in separate ways. An industry expert said, “In countries like South Korea, particularly, where apartments are the most common housing option, constructors need to introduce smart home services from the construction stage of apartments. Otherwise, it is hard to provide smart home services later. So, the nation needs to build the smart home ecosystem totally different from the U.S. and Europe where detached houses are the most common.”
This is why mobile carriers and construction firms have been expanding the cooperation from last year. SK Telecom has introduced cooperative models with construction companies for the first time in the industry. The nation's largest mobile operator is building smart home systems and services in new apartments in cooperation with Hyundai Heavy Industries’ Hillstate Apartment and Hanyang’s Sujain Apartment.
This year, home appliance manufacturers are expected to join the partnership with mobile carriers and construction companies. In fact, the companies also launched products that are linked with smart home systems last year but not many people used them.
However, an increasing number of users learned about smart home services over the last two years, and the demand of smart home-connected products will increase when apartments that have introduced smart home systems from the construction stage start selling.