Consumers Wary of Service Contracts, Even in Smart Home Services

by Kaitlin Hawkins | Mar. 26, 2014

In the latest Consumer Analytics newsletter, Parks Associates revealed new information regarding adoption rates of smart home systems. Conventional wisdom holds that lowering up-front costs in favor of a long-term service contract leads to higher adoption rate. However, this was not the finding for smart home packages—which might include home energy management and home security bundles.

The research firm reveals that most of the consumers willing to purchase a smart home system preferred a transparent pricing model, which included higher up-front costs but no service contract. This could be because consumers are becoming increasingly wary (and weary) of service contracts that fail to deliver or meet expectations.

So, is a "sea change" about to happen in the connected home market? T-Mobile is leading cellphone providers in the direction of no-contract services, so perhaps we will soon see the same or a similar trend in smart home packages.

To stay up-to-date on the latest Consumer Analytics data, subscribe to the Consumer Analytics newsletter, which Parks Associates sends directly to your inbox with monthly research updates.

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