Smart Home Market

Market Overview

The global smart home market size was valued at USD 83.1 billion in 2022. It is projected to reach USD 230.81 billion by 2031, growing at a CAGR of 12.02% during the forecast period (2023-2031). 

A smart home is a home that contains a communication network that links different appliances. It is a home equipped with electronic, lighting, and heating appliances that can be controlled, monitored, as well as accessed remotely with a smartphone or computer. A smart home is capable of learning the habits and habitual patterns of the resident and systematically adjusting the home control system to streamline daily tasks. The rapid adoption of smartphone devices, growing penetration of internet users, and awareness regarding energy-saving and low-carbon emission solutions are driving the demand for the market. 

Energy efficiency is a crucial element in reducing the carbon footprint. Advanced automated systems that can be controlled by users via cell phones and laptops are being introduced. These systems include monitors for multimedia, security shields, lighting, temperature, entertainment systems, window and door operations, and others. The market for smart home gadgets is anticipated to grow as attention to smart home technologies increases. The fact that smart home technology helps conserve the planet's finite resources is one of its most significant features. People are learning more about the capabilities of smart home gadgets as they employ controllers that are linked with house sub-systems to make their homes smart and green.

Market Dynamics

What are the primary factors driving the Smart Home Market?

Rising Adoption of the Internet of Things (IoT)

One of the key worldwide economic factors driving the expansion of the market is the IoT platform. Energy-saving features are offered by IoT-based technology in the house. By 2025, there will be over 25 billion IoT connections worldwide, according to GSMA Intelligence. This indicator indicates that, within a few years, there will be vast swarms of sensors, gadgets, and other objects communicating via 5G and other high-speed technologies. The market is projected to move toward a higher growth trajectory as a result of the increasing prevalence of internet of things devices. Leading companies are focusing their efforts on the creation of IoT platforms and related technology (such as artificial intelligence, machine learning, and others) that could be used in smart home products. In 2020, 10 million products—including heating systems, home appliances, and power tools—were already connected, according to a Bosch research released in May 2021. That amount will almost certainly increase by the end of 2021. By making the house even more user-friendly, Bosch hopes to take a significant market share in the connected security and climate-control markets. As a result, the global market will undoubtedly develop in the near future as IoT use increases.

Rising Importance of Smart Home Security Solutions

The need for smart solutions to tackle security problems has grown around the world. From 2022 through 2030, it is anticipated that rising rates of theft, burglary, and other security-related problems will drive market expansion. Additionally, smart home appliances offer children security options that are clever. The ability to analyze the current status of children at home is made possible by motion sensors in places like the kitchen, home entrances and exits, corridors, living rooms, and others. Professionals who work from home and have children at home rely largely on smart home gadgets like smart robots and smart cameras.

What are the main factors that will slow down the Smart Home Market?

Cybersecurity and Data Protection Concerns

The growing cyberattack in high-end connected technology is the main obstacle to market expansion. All of the linked endpoints pose a security risk to smart home technology. Intelligent technology connects to every system and gadget in the house, which makes it vulnerable to hackers if not adequately guarded. 80% of IoT devices are susceptible to various attacks, according to Rambus Incorporated, a designer, developer, and licenser of chip interface technology. It is obvious that connecting hitherto "standalone" smart devices like lights, appliances, and locks raises many new cybersecurity issues. Parents who were alarmed to learn that hackers were able to contact their young children through a hacked device learned that even connected baby monitors are susceptible to digital intrusions. During the anticipated time frame, this is anticipated to impede the smart home market growth.

What are the future opportunities for Smart Home Market?

Booming Home Automation Technologies

Traditional home automation systems were designed to function with a modest level of connectivity. Users could only use operating systems that fell within a specific range. But the development of smart home technology is creating a whole new universe of opportunities. Connectivity has been used to give homeowners remote access to their properties. Investopedia estimates that there are 175 million smart homes worldwide. The most recent application trend mixes automation and A.I. to offer household assistance in a creative and novel method. The most modern technological advancements guarantee security and sophisticated devices. Some of the most popular security features in smart homes are video door alarms, facial recognition technology, ultra-modern burglar alarms, and remote-controlled locks.

Regional Analysis

The global smart home market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

North America region is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. The substantial presence of significant players in this industry, including Crestron, Amx, Honeywell International Ltd., and Control4 Corporation, supports this expansion. Additionally, factors, including the rising use of fundamental communication technologies, such as Wi-Fi, Bluetooth, Zigbee, NFC, and the future 5G network, are promoting the market's expansion. In order to grow their business units globally, major corporations in this region are concentrating on engaging in smart mergers and acquisitions. Furthermore, the ecosystem for smart homes is growing quickly, and solutions are being created by existing solution providers. Through mergers and acquisitions and investments in cutting-edge technology, the major industry participants are diversifying their product offerings.

Europe is expected to witness dynamic growth in the market during the forecast period. Small business growth and increased investment by major enterprises in countries like Germany, the U.K., France, and others are the main factors driving the market growth. This rise is being driven by the rising need for intelligent security and monitoring solutions in this area. These elements will contribute to the market's growth, encouraging the market's global expansion. In the upcoming years, Germany is anticipated to become a major market for smart technology. Private household applications that involve digitalization, such as those that deal with security and comfort, energy management, and aging with autonomy, are developing quickly. New home applications and business models have emerged as a result of the expansion of the internet, networkable home appliances, and mobile communication devices. As a result, the smart living sector has become more significant. In a market that is expanding rapidly, German enterprises, in particular, are predicted to make up a sizeable portion of the worldwide market volume.

Asia-Pacific is expected to witness significant growth in the market during the forecast period. Population growth, urbanization, and steady economic growth are expected to be the key factors driving market growth in Asia-Pacific. The region is considered a huge market for smart homes, owing to the considerable implementation rate for products such as entertainment and control systems. Due to recent government measures, digitization campaigns have gained momentum in India. For instance, by enhancing Internet connectivity and speed, the government's Digital India program seeks to empower India digitally. In Japan, there is lucrative commercial potential in the smart home sector. Demand for a safe and secure living environment is rising in Japan, particularly in terms of safety features and specific monitoring for the elderly. Unprecedented natural disasters, like the 2011 Japan earthquake, have increased demand for connected gadgets that can inform users or allow them to manage and monitor their devices remotely using a smartphone app.

The LAMEA region is expected to witness moderate growth in the global market during the forecast period. The popularity of smart home devices has grown as people's incomes and the manufacture of environmentally friendly products in Brazil has increased, but in retrospect, the players are now more aware of product development strategies and focusing on creating more consumer-friendly items.

Segmental Analysis

The global smart home market is segmented by product.

Based on product, the global market is bifurcated into lighting control, HVAC, home healthcare, smart kitchen, security and surveillance, entertainment, home appliances, and smart furniture.

The entertainment segment is the highest contributor to the market and is expected to grow at a CAGR of xx% during the forecast period. The entertainment segment encompasses smart T.V.s, streaming sticks, and set-top boxes. The entertainment control system used in a smart home includes audio, volume, and multimedia room controls; the convenience offered by these control systems is bolstering the market growth. An entertainment control system helps centralize all connected devices and listen, watch and control them from any room.

The security and surveillance segment is expected to witness a higher CAGR. Security systems are increasingly in demand in the market for smart homes as a result of rising consumer demand for digitally connected products. Advanced security solutions are offered by gadgets like video assist doorbells and smart security cameras. IoT integration has made it simple to set up smart home security, allowing customers to operate lights, thermostats, heating systems, door locks, and lawnmowers via smartphone applications. With their excellent features and adaptable features, smart security cameras make it simple to monitor your house from anywhere. Additionally, DIY kits with smart security cameras are available. The user has the option to configure security alerts in accordance with his or her needs, pay a subscription fee for 24/7 expert monitoring of the smart home, and choose to call the fire and police departments in the event of an emergency.

Recent Developments

• September 2022, Group Legrand India, a leader in electrical and digital building infrastructure, opened its third telemedicine health center in Rohad, Haryana, in association with the Apollo Telemedicine Networking Foundation.
• August 2022, Samsung Electronics broke ground on a new semiconductor research and development center in Giheung, Korea, with the intention of strengthening its position as the industry leader in cutting-edge semiconductor technology.