Connected Home Evolves From Devices To Services

Parks Associates’ 2026 State of Connected Home report says the connected home market is shifting away from selling devices and toward owning the customer relationship through data, services, and recurring revenue. The biggest growth opportunities are in platform control, AI-driven home experiences, security, and home energy management, while trust and privacy remain the main barriers to broader adoption.

The report frames platform ownership as the central battle in the connected home, with Amazon, Google, Apple, and Samsung leading but not fully locking up the market. As homes add more devices, interfaces such as voice assistants, hubs, smart displays, and AI assistants become the main gateways for controlling the home and monetizing the relationship. Parks Associates says tech giants hold about 62% of platform preference, but security providers, ISPs, and other players still have room to compete.

Connectivity is no longer about simply getting households online; the report says roughly 95% of households have internet at home, so the competitive fight has moved to reliability, coverage, and overall experience. Consumers care more about outages, dead spots, latency, and service quality than raw speed, and those problems hit satisfaction hard. Bundled services are increasingly important, especially smart home security, which helps providers improve retention and deepen customer relationships.

AI is presented as the next major inflection point, moving the smart home from manual app-based control to proactive orchestration. The report argues that AI can make home systems more useful by interpreting intent and automating actions across devices, but it also risks putting an AI layer between brands and consumers. Parks Associates says many smart home users are already familiar with generative AI, and interest is strongest in practical use cases such as predictive automation, conversational assistants, support, and energy optimization.

Consumer trust is one of the report’s strongest themes, with privacy, data security, and AI misuse continuing to slow adoption. The report says consumers want more transparency and more control over what data is collected, how it is used, and who can access it. Trust also shapes preferred providers for home control, with respondents favoring companies they believe will protect their data and support long-term compatibility.

Home security is evolving beyond alarms into a broader platform that includes cameras, monitoring, AI analytics, and premium services. Parks Associates says adoption now often starts with video doorbells or smart cameras, which can lead to higher-value paid services and broader platform engagement. The report also sees home energy management as a major opportunity, especially as rising utility costs drive interest in solar, batteries, EVs, and smart thermostats.

For lighting professionals, the core message is that the connected home is becoming a services business, not a gadget business. The winners will be companies that combine strong interfaces, trusted data practices, interoperable ecosystems, and clear consumer value, rather than those relying on hardware alone.

Download the full report here (free but gated).

All images courtesy Parks Associates.