|The need for home automation has increased as more and more homes stay empty throughout the day / Photo by Prasit Rodphan via 123RF|
Smart home technology has come a long way since the vacuum cleaner was introduced way back in 1901. Users can now connect their smartphone to practically any device around the house, from ovens to thermostats and home security systems. The idea of a “smart home” has fascinated many. For some, turning a house into a smart home can be as simple as buying a connected speaker. For others, it can involve connecting several different products such as cameras, speakers, appliances, security systems, and more into one network.
Research firm Juniper Research predicted the total revenue from smart home automation/monitoring in three areas by 2024. The report showed that Europe will reach a total revenue of $276.6 million, the Americas $319.4 million, and the rest of the world $759.8 million. This proves that smart homes will gain widespread consumer adoption for the next couple of years.
The positive growth of the market is linked to the rising affluence of middle-class consumers along with the growing number of working couples. The need for home automation has increased as more and more homes stay empty throughout the day.
Smart devices control almost every aspect of a house, including lighting, climate, entertainment system, appliances, alarm systems, and many more. They enhance the convenience, comfort, security, and enjoyment of homeowners in a sustainable way. What’s great about having a smart home is that it can be controlled by a single device or just by voice control or gesture.
Aside from the fact that smart homes are cheaper to maintain than traditional homes, there are several other reasons why people are becoming more interested in living in one. This includes energy conservation, the threat of climate change, increasing affordability of smart home features, and the growing adoption of cloud-based technologies.
Smart Home Market Worth $103 Billion by the End of Year
A recent report by research firm Strategy Analytics showed that smart home technology is indeed taking off. From voice assistants to interactive security systems, the market will gain significant revenue this year. Architectural Digest, the international design authority, reported that by the end of 2049, the global market for smart home technology is set to reach a projected annual revenue of $103 billion. About 54 percent of that projected spend will be on smart devices and hardware.
Additionally, Strategy Analytics predicted that the smart home market will reach $157 billion in annual revenue—an 11 percent compound annual growth—and a total of 6.4 billion smart home devices in use by the end of 2023. This accounts for 21 connected devices per home. According to Jack Narcotta, senior industry analyst for Strategy Analytics’ smart home strategies group, the market growth is “driven by increased awareness of the capabilities and benefits of the solutions."
Narcotta added that the devices have become more accessible to the average consumer, encouraging them to patronize the technology. The report showed that the market driver is interactive security devices that are spearheaded by tech startups like Ring and traditional security companies like ADT. There will also be a significant increase in the number of IoT–connected homes and the number of gadgets to be found in households. As of 2018, there are more than 200 million homes worldwide that contain at least one smart device. By 2023, this could increase by 100 million more households.
|As of 2018, there are more than 200 million homes worldwide that contain at least one smart device / Photo by Jozef Polc via 123RF|
A Steady Growth Through 2023
IDC, an American provider of market intelligence, recently released its Worldwide Quarterly Smart Home Device Tracker, which predicted that there will be more than 1.39 billion worldwide shipments of smart home devices by 2023 and a five-year compound annual growth rate (CAGR) of 14.4 percent. The report revealed that the US will grow at a CAGR of 9.5 percent, leading the unit shipments annually.
It will be followed by China, which is the second-largest country by shipment volume every year. The country will have the highest growth rate at a CAGR of 22.6 percent between 2019 and 2023. Next would be Canada with a CAGR of 19.9 percent, and then Western Europe with 14.7 percent.
Adam Wright, a senior research analyst, said, "Driving the market's growth over the next few years is a combination of downward pressure on prices from intensifying competition; rising adoption of smart assistants; and rising consumer awareness of the conveniences, cost savings, and energy reductions that smart home devices provide.”
The report also said that video entertainment will account for 29.9 percent of all shipments in 2023, which is the largest volume of shipments. This is followed by home monitoring/security devices like smart cameras and smart locks for 22.1 percent and smart speakers and displays for 4.7 percent.
Smart Home Market to Be Worth $144 Billion by 2025
Indeed, the global smart home market will experience consistent growth for the next few years. A report from Meticulous Research showed that the market is expected to reach $144 billion by 2025 from a CAGR of 16.5 percent in 2019. According to GlobeNewswire, a news agency that provides press release distribution services globally, the growth is attributed to the increasing sense of safety and security and the need for attaining better operational and energy efficiency among homeowners.
Some of the factors that contribute to the growth include the increasing adoption of smart devices, the rising number of internet users, the consistent proliferation of the internet of things, and the rapid proliferation of smartphones and smart gadgets. It is estimated that the largest share of the global smart home market will come from security and monitoring systems, which is primarily due to the increasing sense of security and safety for remote monitoring of domestic facilities among consumers across the globe.