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Smart Homes A Look into Today's Trends and Opportunities APPLIANCES / TREND PAPER 5 Consumer Trends In addition to technology and market factors, an array of consumer-related trends is also dictating rapid smart home growth. • Energy savings and sustainability: While governments around the world develop energy-related regulations and programs, a desire for energy savings and a growing sense of environmental responsibility top consumer concerns in driving smart home adoption. Consumers are looking for innovative devices to reduce energy usage and consumption as a means to make households greener and more sustainable. These concerns are playing out around the world. In North America alone, consumer concern about energy consumption is projected to be the most significant factor driving smart home adoption. Energy efficiency is also a leading driver among German consumers. In Europe, HVAC, as a potential solution to low-carbon emission mandates, is forecasted to contribute 44.3% to the region's smart home market, making it the fastest growing application on the continent over the next seven years. 1 • Security and surveillance: Consumer concerns around security and surveillance are also driving growth in smart homes. Around the world, home monitoring is of growing interest, particularly in addressing safety concerns over personal property and belongings. Applications include the adoption of video door monitoring, smart alarms, digital locks and lockers, and motion- sensing cameras that can be remotely controlled from a web-enabled device such as a personal computer, tablet, or smart phone. By virtue of these capabilities, homeowners can be alerted to in-house motion detection, or alternatively, police and fire authorities can be immediately notified of imminent threats. While interest in security and surveillance is a clear response to rapidly growing urbanization, it is of equal importance in remote locations. The result has been a segment that registered a 30.71% market share in 2021 1 – the largest share of the global smart home market that year. • Pandemic-related lifestyle changes: Since 2020, the COVID-19 pandemic has dramatically changed the way people live and work around the world. In turn, these changes have had a direct impact on the growth of smart homes with a heightened emphasis on health safety, the ability to manage home systems without physical touch and lower the risk of contagion, has gained greater value. In addition, the increasing demand for the home delivery of goods and services has driven the demand for connectivity options that include voice controlled and smart-enabled access point solutions. Perhaps even more so, the increasing number of people working-from-home has shifted purchasing to directly reward a host of smart, connected solutions. This includes: • Health and wellness solutions: As consumers spend more time at home and reduce their exposures to health clubs and gym memberships, they have turned to in-home exercise equipment that offers connectivity capabilities. In addition, the growing trend towards personalized health management has meant an increased use in medical devices that must be tied to IoT functionalities within the home. • Smart kitchens: Another direct result of the pandemic has been the surge in home cooking. This has directly impacted the growing interest in smart kitchens and in turn, premium-line products with enhanced functionalities. Further, as cooking confidence and creativity increase, it is expected that customers will have even more heightened expectations on the types of advanced capabilities their appliances offer. These combined measures are expected to make smart kitchens the fastest- growing smart home segment over the next seven years with an estimated CAGR of 30.5% from 2022 to 2030. 1 • Personalization and appliance upgrades: 14 Today's consumers are increasingly focused on lifestyle experiences, looking to have an emotional engagement with the brands they buy. As a result, more consumers invest the time learning about products and personalization options before making a purchase decision. Home appliance manufacturers are recognizing this trend. They are gathering information on consumer preferences to inform their product, design and customization options and are looking at how to integrate smart home appliance trends into larger smart home ecosystems. In using customer input over the next two-three years, personalized experiences are expected to be at the forefront of making appliances more suitable to a wide variety of styles and home ambiances. However, in the longer term, home appliances are expected to be enhanced to add extra capabilities and functions while also fitting a more modular experience. Appliances that combine features, allow for easier monitoring/repair, and add advanced digital elements to ensure convenience, are expected to become the new standard. 6

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