The smart home is a trend expected to grow worldwide, but the reasons for implementation vary by region. Japan is a particularly interesting case due to the country’s advanced technological communities and dense population. The following is a snapshot of recent developments in Japan’s smart home market, in the context of broader global trends.

The global smart homes and buildings market is due to grow significantly between 2013 and 2020, with a compound annual growth rate (CAGR) of 29.5 percent, according to Allied Market Research. Their report entitled “Global Smart Homes, Buildings (Energy Efficient, Automated) Market (Applications, Technologies, Products and End-User), Size, Share, Trends, Analysis, Research, Future Demand, Scope and Forecast, 2013 – 2020,” expects market revenue to grow to $35.3 billion by 2020, which is a significant increase from $4.8 billion in 2012.  Rising energy costs, government initiatives and greater awareness of environmental concerns attribute to the rise we will see leading up to 2020.

The market of safety and security application expects to see substantial growth by 2020, with revenue reaching $6,132.4 million by 2020 with an expected CAGR of 34.6 percent. “This market is expected to evidence significant growth due to growing security concerns and enhanced safety features that smart automation systems can currently offer. With an increase in the working population, safety concerns with respect to aged parents and children is the biggest challenge. Smart home address these issues with highly-sophisticated remote monitoring technologies,” states Shreyas Naidu, Research Analyst at Allied Market Research.

Adoption of smart home technologies in Japan

In Europe, the significant drivers behind the embracing of smart homes and intelligent automation is all about energy savings and comfort. While in Japan, there is a demand for a safe and secure living environment, especially concerning safety functionalities and discrete monitoring for elderly people. “In Japan, the people aged 65 or over account for 25 percent of the population. This demographic trend is expected to continue and will significantly influence social and economic structures. Modern building automation technology plays a key role in making life easier, more secure and comfortable for elderly people and their families,” says Graham Martin, Chairman of the EnOcean Alliance. Producers of smart home technologies in Japan are looking towards innovative intelligent systems that effectively support people at home. “Smart home and ambient assisted living are two of the building industry’s strongest growth markets in this region.”

Internet refrigerator with Google Android operating system

Haier Asia Co., a Tokyo-based unit of Chinese consumer electronics manufacturer Haier Group Co., plans to launch an Internet refrigerator that will use the Google Android operating system. The refrigerator will be able to analyze the ingredients that it contains and recommend a corresponding menu. In addition, it will be able to confirm the safety of users. For example, if an elderly parent that lives alone hasn’t opened the refrigerator for continuous days, then a security company will be notified.

Haier Asia also unveiled a new research and development center in Japan last week. The center cost 7 billion yen ($58.7 million) to build and has a floor space of approximately 12,000 sq. meters. It becomes the Haier Group’s largest R&D center outside of China. Their goal is to increase sales in Southeast Asian countries to more than 100 billion yen ($8.3 billion) by 2019, a 100 percent increase from 2013.

Icontrol Networks Inc.’s partnership brings smart home experience to Japanese consumers

In October last year, Icontrol Networks, a leader in connected home technology, announced that it was partnering with iTSCOM to bring the Icontrol Touchstone solution to Asia. iTSCOM is a premier cable provider in Japan and a division of the Tokyu Group. The Touchstone service will offer a smart home experience, which consumers can install themselves, to Japanese cable operators.

“Our partnership with Tokyu Group’s iTSCOM is a critical step in our strategic approach to international expansion,” said Bob Hagerty, Icontrol’s CEO. “The Internet of Things is one of the fastest growing segments of the already robust technology industry in Asia. The market opportunity for the smart home in the Asia-Pacific region is significant, so we are excited to continue growing in that area.”

Icontrol Touchstone allows users to stay connected to their homes via live video feed and event-driven video capture from in-home cameras. Consumers will be able to remotely control and manage their homes via smartphones and other mobile devices. They can also personalize their systems by scheduling automated alerts, for example, you can receive a real-time notification alert when the kids get home.

Sony looking to enter the smart home market

Sony is also looking to enter the smart home market with its crowdfunded Qrio lock. Claiming to be the smallest smart lock available, Sony launched a crowdfunding campaign for the lock on Makuake, a sort of Kickstarter in Japan. The lock will slip over the existing hardware of your door, without any tools being required for the installation. You will then be able to open your door using your smartphone. Alternatively, you can share the encrypted key via messaging apps like Facebook and Line and then anyone who has been sent the encrypted key will be able to gain access to your home.

Smart cities becoming a booming market in Japan

Due to the steep increase in energy consumption in cities, energy supply has increased. The problem is that the most productive and cost-effective means of energy production is not the cleanest. Worldwide, cities consume up to 80 percent of energy supplies and produce about 75 percent of CO² emissions, with cities in Japan and the European Union (EU) being among the largest consumers. This is the reason why smart cities in Japan and the EU have become a booming market. This market will continue to grow as renewable energies and sustainable life style solutions are key sectors of public and private investments. Tokyo Electric Power Co. (TEPCO) announced it would install 27 million smart meters by 2020.

Smart City business in Japan is expected to grow from ¥1.12 trillion in 2011 to ¥3.8 trillion by 2020. Japan’s smart cities include the City of Yokohama, Toyota City, Keihanna (Kyoto) and the City of Kitakyushu. These smart cities objectives are to provide sustainable growth and encourage healthy economic activities. This ultimately will reduce the burden on the environment and improve residents’ quality of life. There is a greater demand in Japan for this sustainable living, following the earthquake and subsequent nuclear power plant accident in 2011.

Image credit: Akumach from Kawasaki City under Creative Commons License: Haier sign in Japan via photopin (license)