When “whole-house intelligence” becomes a hot word in the decoration circle, more and more families are following the trend and entering the market, and the 800 billion market size seems to be improving.
But behind the prosperity, hidden traps are everywhere: service providers are trapped in price wars and are unprofitable, and long-term services are reduced to empty talk; ordinary users mistakenly step into the “pseudo-smart” trap and simplify system engineering into decoration add-ons.
The key to breaking all this is the service bonus that 90% of people ignore.
Pain Point 1: Service providers are involved in price wars, and long-term services have become “abandoned”
“For the same whole-house smart package, Brand A charges 20,000, while Brand B directly charges 15,000. If we don’t lower the price, we will have no orders.” A smart home service provider who has been in the industry for 5 years said frankly that price wars have become the norm in the industry.
At present, more than 60% of domestic smart home service providers rely on hardware sales as their core profit source, with profit margins generally below 5%. In order to seize the market, some small and medium-sized businesses even accept orders at a loss.
Behind the price war is a serious lack of service.
Smart home is not a “one-and-done” hardware combination, but a system project that requires long-term debugging, maintenance, and upgrades – equipment compatibility optimization, network stability guarantee, user training, fault emergency handling, etc., are all core links of the service.
But the reality is that most service providers focus on early sales and installation, leaving a serious disconnect in later services.
Nearly 40% of users have encountered problems such as “no way to complain” and “slow response” after smart home equipment malfunctions. Some users have simply idled the entire smart system due to minor glitches that could not be solved for a long time.
Pain Point 2: User cognitive bias, mistaking “system engineering” for “decoration”
The dilemma of service providers has formed a vicious circle with users’ cognitive bias.
In the eyes of most ordinary users, the construction of a smart home is equivalent to “installing a few smart switches and smart lights during decoration”. It is an extension of the decoration process and does not require advance planning or professional design.
72% of users regard smart home as a “decoration add-on”, and only 18% of users realize that its essence is a “system integration project based on people’s living habits.”
The problems caused by this cognitive bias are obvious: many users only consider smart homes in the later stages of decoration, resulting in insufficient wiring and unreasonable network points. In the later stage, they can only use wireless devices to compromise, which affects the user experience; some users blindly pursue “multiple functions and low prices” and ignore the compatibility and scene adaptability between devices. Eventually, the embarrassing situation of “smart devices fighting on their own” occurs – smart lights cannot link curtains, voice control frequently fails, and the entire system becomes “pseudo-intelligent”.
In fact, the core of a real smart home is “people-centered” scenario-based services: according to the user’s living habits, lighting, curtains, security, home appliances and other equipment are integrated to realize personalized scenarios such as “automatically draw the curtains and turn on the lights when getting up”, “automatically cut off the water, power and security when leaving home”. This requires on-site survey and program design in the early stage, precise installation and debugging in the mid-term, and continuous optimization and upgrade in the later stage. It is by no means the “icing on the cake” of the decoration process.
Breakthrough: Break out of involution and embrace the blue ocean of service dividends
There are no winners in the involution of price wars, and it takes time to correct cognitive biases. The breaking point for the industry lies in the shift from “hardware sales thinking” to “service value thinking” – the future of smart homes is not a competition of hardware, but a competition of services. Service dividends are the real blue ocean market.
For smart home brands that value long-term service, their user retention rate is 40% higher than that of brands that rely solely on hardware sales. Service revenue accounts for up to 35%, and their profit margins far exceed that of hardware sales.
Building service dividends requires the two-way efforts of service providers and users: For service providers, it is necessary to jump out of price wars and delve deeply into “pre-sales – during sales –
“After-sales” full-process service – providing free on-site survey and personalized solution design before sales, installation, debugging and user training during sales, and establishing a 24-hour emergency response mechanism and regular on-site maintenance services after sales, turning services into core competitiveness; for users, it is necessary to correct cognitive biases, incorporate smart home construction into early decoration planning, pay attention to the professional capabilities and service levels of service providers, rather than simply focusing on price, and rationally view the value of “system integration”.
Conclusion: From “hardware involution” to “service deep cultivation”, the industry can achieve steady and long-term development
The essence of smart home is to use technology and services to improve the quality of life, rather than simply stacking hardware.
Behind the 800 billion market size is users’ yearning for a better life, and it is also an opportunity for industry transformation and upgrading.
When service providers bid farewell to price wars and focus on service dividends, and when users correct cognitive biases and rationally choose system solutions, the smart home industry can break out of the predicament, realize the leap from “scale growth” to “quality improvement”, and truly enter the beautiful life of thousands of households.
