The global smart home market is projected to grow from USD 84.5 billion in 2021 and is projected to reach USD 138.9 billion by 2026; it is expected to grow at a CAGR of 10.4% from 2021 to 2026.
Market Dynamics
- Drivers
- Increasing Number of Internet Users and Growing Adoption of Smart Devices
- Increasing Disposable Income of People in Developing Economies
- Increasing Importance of Home Monitoring in Remote Locations
- Growing Need for Energy-Saving and Low Carbon Emission-Oriented Solutions
- Expansion of Smart Home Product Portfolio by a Large Number of Players
- Growing Concern About Safety, Security, and Convenience Among General Population
- Restraints
- More Convenience-Driven Rather Than Being Necessity-Driven Market
- High Cost of Switching for Existing Smart Device Consumers
- Issues Related to Security and Privacy Breaches
- Opportunities
- Favorable Government Regulations to Promote Green Buildings
- Incorporation of Lighting Controllers with In-Built Data-Connectivity Technology
- Integration of Power Line Communication Technology in Smart Homes
- Rise in Demand for Smart Home Products due to COVID-19
- Challenges
- Difficulties Linking Disparate Systems, Limited Functionality, and Lack of Open Standards
- Risk of Device Malfunctioning
- Compatibility Issues Between Devices of Different Companies
Several major companies operating in the smart home market are based in Europe such as ABB (Switzerland), ASSA ABLOY (Sweden), Legrand (France), Robert Bosch (Germany), Schneider Electric (France), and Siemens (Germany), which are focused towards developing innovative smart home solutions. Moreover, the EU has a high GDP rate, a high standard of living, which makes the adoption of smart homes and related products affordable to consumers.
Market for smart furniture is expected to grow at the highest CAGR during the forecast period
The market for smart furniture is expected to grow at the highest CAGR during the forecast period. Continual technological advancements has resulted in the incorporation of various features such as wireless smartphone charging, induction beverage warmer, and Bluetooth speakers into single furniture, a factor further expected to bolster the smart furniture market growth.
Due to the growing consumer shift towards connected devices, the smart furniture market is expected to witness robust growth over the forecast period. Furthermore, an increase in technological advancements and innovations will have a positive impact on the market growth. As a result of increasing discretionary income, people are now more likely to invest in smart furniture.
Market for proactive type software and services to grow at a higher CAGR during the forecast period
The proactive type software and services are expected to grow at a faster rate during the forecast period. The proactive type software enable the transfer of a higher volume of data than the behavioral type as they can provide end-users with inputs on effective energy usage and actions on the physical parameters such as ambient humidity and temperature to reduce energy consumption. The algorithms associated with the proactive type software and services can also comparatively analyze the energy usage patterns based on the time of the day, historical data, and weather conditions.
Proactive type software and services are more beneficial than the behavioral type as they send recommendation signals to end users to take necessary actions to reduce energy consumption; consequently, based on the users’ actions, the measures to control the electronic devices can be implemented. Several proactive solutions are equipped with displays and web software packages, which provide additional information to the consumers, such as trends in energy usage and information pertaining to household baseline energy usage, alarms, and goal tracking.
Due to the benefits offered by the proactive type over behavioral, they are likely to be adopted to a larger extent in smart home products in the coming years.
Lighting control to hold the second-largest share of the smart home market by 2021
The smart home market for lighting controls is expected to account for the second-largest share by 2021 The growth of this market can be attributed to the capability of lighting control to reduce electricity consumption in homes as the sensors adjust the intensity of artificial light according to the intensity of natural light. Lighting is one of the largest electrical loads in homes. However, lighting appliances and devices consume lesser energy compared to other residential electric appliances, which often leads to negligence toward their energy-saving potential.
Over the years, the growing environmental concerns have helped spread awareness regarding the importance of smart homes and home energy management measures. Increasing smart cities projects worldwide and rising modernization and infrastructural development would further contribute to the growth of the market. Moreover, intelligent lighting is gaining popularity and would be adopted widely to save energy in the near future. Hence, lighting controllers, now, play a vital role in reducing electricity consumption within households, along with ensuring comfort and convenience to the users.
Europe to hold a significant share of the smart home market during the forecast period
Europe is expected to hold a significantly large share of the smart home market during the forecast period. A large population of technology enthusiasts in European countries such as the UK and Germany, prominent smart home product-manufacturing companies, growing awareness about residential energy conservation systems, and rising demand for lighting controllers is the key drivers for the growth of the smart home market in Europe.
Consumers in the EU are aware of the benefits of smart homes and the need for power efficiency. These factors have paved the way for the increased adoption of smart home solutions in the region.
