Gartner defines the connected home or smart home as one that is networked to enable the interconnection of multiple devices, services and applications, ranging from communications and entertainment to healthcare, security and home automation. These services and applications are delivered through multiple
The smart home technologies segment is divided into several sub-segments: smart home hardware, smart home platforms, smart home services and smart home connectivity.
Revenue share by segment in 2021
Global market shares of smart assistants in 2017 and 2020
Source : IHS
Customers in this market have a growing
Global internet penetration rate in April 2022, by region
Source : We Are Social, Hootsuite et DataReportal
The constraint of smart home device security
The smart home industry operates on the exchange of information between devices and objects in the home. This information could be about a user’s spending habits, travel, bills, etc. All of this data is vulnerable to hacking. Since data related to personal information, physical security, healthcare, and homes are stored virtually in the cloud, the opportunities for hackers to misuse this data are high. A hacked device can
The issue of data security in the smart home sector represents a significant challenge for stakeholders in the sector. The World Economic Forum’s Connected World Council has mobilized a coalition starting in 2022, which brings together business leaders, government officials and technology experts to reach a consensus on basic security protections
Major global markets
Statista reports that the smart home industry is a growing market that is worth US$104.42 billion in revenue in 2021 globally. This revenue is expected to grow at a CAGR of 13.30% from 2022 to 2026, resulting in a market volume of US$207.80 billion in 2026. In the smart home market, the number of active households is
While early adoption of wearables, home electronics, and smart devices was concentrated in North America and Western Europe, China is expected to overtake the United States as the largest market by the end of 2024, according to
Asia Pacific is the region expected to witness the highest growth during the period 2022 – 2026. This region is witnessing increasing demand for automation solutions for residential applications, which is expected to drive the growth.
Source: Statista
When Prime Target looks at Twitter conversations over the past year for India, the US, the UK, Germany and Australia for example, we can see that the topic of smart home is heavily discussed for all of these countries.
India is the country with the most discussions with 478 discussions associated with the keywords “Smart Home”, “Connected Home”, “Home automation” and “Intelligent Home”. It is followed by the United States and Australia.
Key players in the sector
The main players in the sector have chosen as a strategy to collaborate, with partnerships or mergers and acquisitions in order to access the global Smart Home market and to be able to offer increasingly innovative products. For example, in January 2020, the American company Vivint Smart Home Inc and Mosaic Acquisition Corp announced a merger. The objective of this merger was to take the company public and improve the smart home platform offerings.
As mentioned earlier, the United States is the leading country in terms of smart home market revenue due to macroeconomic factors (increasing income) and the high internet penetration in the country. However, the concentration of market leaders is also an important factor in their growth. Indeed, the majority of global market leaders are American. For example, Honeywell has a very strong presence in the smart home market, partly due to its broad product portfolio that includes a variety of products
While the United States is gaining ground in the global market, Europe and Asia are not far behind with their players. Indeed, companies such as Schneider Electric and Somfy for France, ABB for Switzerland, Robert Bosch for Germany, LG Electronics, Samsung Electronics for South Korea, Sony for Japan are among the major players in the global smart home market.
Impact of Covid 19
As with most industries, the Covid-19 crisis has had an impact on the smart home market. However, according to Statista, the market is still growing (16.55% between 2020 and 2021) although slowed down by the health crisis. Major markets such as China and the United States have been affected, with the United States experiencing a slowdown in growth (+5.9% in 2020) due to the disruption of the supply chain in China. The decline in the number of new construction projects and the temporary closure of manufacturing facilities are some of workers on site. Therefore,
Future trends
Environmental concern has become a major topic for all industries. In developed countries, consumers are looking to optimize their consumption by limiting their impact on the environment. According to Jeff Merritt, Head of Urban Transformation at the World Economic Forum: “We are looking to new technologies to help address pressing global challenges – from climate change to rapid urbanization.” The smart home sector already offers products that optimize energy consumption, for example with lighting controls, which have seen strong growth in recent years. This sub-segment includes a very wide range of products such as dimmers, timers, occupancy sensors, daylight sensors and relays. These products are used either independently or integrated into the same solution, always with the aim of optimizing consumption through data connectivity. They can be integrated into home automation systems through wired and
Conclusion
The smart home sector, driven by the penetration of the Internet of Things in people’s lifestyles, is booming and offers multiple opportunities to market players. The increase in incomes worldwide makes this technology accessible and the search for better living comfort creates a demand for smart home products. The integration of the Internet into everyday objects is an extremely strong trend that will become a way of life. The number of smart homes
