The total addressable market (TAM) for smart home appliances was valued at USD 30.79 billion in 2021. It is estimated to reach USD 63.63 billion by 2030, growing at a CAGR of 8.4% during the forecast period (2022-2030). A smart home is a system in which home attributes like lighting, climate, entertainment systems, and appliances will be monitored and controlled by a home automation system. Home security measures like access control and alarm systems might also be included. Different smart solutions for residential applications are being made possible by the expanding home remodeling projects in Western nations. Due to the rising housing costs and mortgages, there is an increase in expenditure on house remodeling and improvement projects.
Home appliances compatible with smartphone devices, such as smartphones, laptops, and tablets, can be easily included thanks to rapid breakthroughs in wireless communication and IT infrastructure. This enables users to remotely manage and improve the performance of various home appliances, including air conditioners and refrigerators. The hands-free and more user-friendly deployment of smart devices made possible by digital assistance and AI significantly impacts consumer preferences.
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Technological Advancements in Smart Home Technology
The industry expansion is being supported by technological advancements implemented in residences. Smart homes and smart home products have been popular trends for many generations. Recent technology advancements emphasize automation and operating systems that are entirely integrated. For instance, In October 2021, IKEA unveiled its new IKEA smart home category and unveiled its first smart cleaner, the STARKVIND, designed for indoor use. This air purifier has five different fan speeds and an automatic mode that adjusts the fan speed on the amount of PM2.5 in the air using a built-in air quality sensor.
Additionally, tech-savvy businesses and corporations have developed smart automation and cutting-edge features for smart homes. Customers in their twenties will likely be drawn to digital smart dials and voice-activated lights with configurable capabilities and AI-driven features. For instance, Samsung debuted its 2020 series of front-load washing machines powered by AI coupled with a 7kg washer dryer. The new smart washing machines have the brand-new Q-Raptor technology from the company, which offers three intelligent features to manage laundry, including a manager, planner to finish time, auto-recommendation for the best wash cycle, and a homecare wizard to monitor the machine’s condition.
High Cost of Technology and Related Products
The entire cost of the finished product is significantly more significant due to an increase in product launches and technological advancements in home appliances. In order to produce an automated and thoroughly integrated experience, new technologies are included in the manufacturing process of smart home appliances, which results in higher initial investment and ongoing maintenance expenses for consumers. Most businesses, brands, and producers employ the best technology and raw materials to deliver the outcomes customers want from smart home appliances. Advanced AI technology, personalization, washing machine, smart dials, and other technologies used in smart home appliances come at a higher cost and require more complicated installation settings, raising the finished product's cost.
Increasing Spending on Remodeling Project to Improve the Smart Home Experience
Consumers are spending more money on home remodeling or improvement projects to modernize their traditional household structures as a result of rising costs associated with housing prices and mortgage rates. Homeowners now have twice as much equity as they did in 2014. This is a pattern of homeowners who feel wealthier and are more likely to spend money on home renovations. Consumers expect appliances with extra features like multipurpose baths, minimalist designs, touchless faucets, and voice-control sensors due to the growing trend of smart homes.
Home appliance makers offer luxury tech-driven home appliances that are AI-driven and multi-task automatically, making it simpler to duplicate a tailored experience at home. For instance, Samsung and LG demonstrated their AI-based refrigerator capabilities at CES 2020 in January 2020. LG’s second-generation InstaView ThinQ refrigerator and the most recent version of Samsung’s Family Hub refrigerator use AI-equipped cameras that can recognize food and scan the interior to inform customers.
The global smart home appliances industry is segmented by product and distribution channel.
Based on product, the global smart home appliances market is bifurcated into smart washing machines, refrigerators, smart air purifiers, smart TVs, and others.
The smart washing machine segment is the highest contributor to the market and is expected to grow at a CAGR of 8.10% during the forecast period. Smart washing machines are smart washing machines that use Artificial Intelligence (AI) and smart features to provide users with a customized experience. These smart machines analyze washing cycles and automate drying processes using smart devices and AI control panels. The smart washing machine includes troubleshooting functions, proposes washing cycles, and displays timely information by remembering user patterns. Moreover, there is a growing market for smart washing machines due to the IoT's increased adoption and appeal. Many industry participants are expanding their current product offers and launching new items to satisfy the demands of tech-savvy customers.
The first internet-connected refrigerator also referred to as an "internet fridge," was introduced by a global conglomerate, LG, in June 2000. It typically had a thin-film transistor liquid crystal display (TFT-LCD) screen with a Local Area Network (LAN) connector and TV capabilities. After introducing the first internet-connected refrigerator, numerous industry participants attempted to incorporate digital technology into refrigerators. Smart homes are powered by information technology and digital gadgets connecting various home appliances to increase occupants' security, utility, entertainment, and comfort.
Smart air purifiers are becoming essential to smart homes as people's concerns about their health and the environment grow. Nearly 91% of the world's population, when taking into account the entire population, resides in locations where the WHO-recommended limit for air quality is exceeded. Even though outside pollutants cause indoor air pollution, most of it is caused by internal building sources like paints, cleaning products, insecticides, other frequently used products, building materials, and combustion sources like coal and wood heating, tobacco, fireplaces, and cooking appliances.
TVs, lights, fans, and several other appliances have paved the way for the technological invasion of the home. For accessing control through programs like on-demand music and video, smart TVs can be connected to the internet. When compared to conventional televisions, smart TVs are also equipped with more sophisticated features and applications. For example, they provide voice recognition tools that let users change the channel without touching a remote control button. Smart TVs' ease of use and accessibility will contribute to the expansion of this market.
Smart lights, smart speakers, smart lighting, smart garage doors, smart thermostats, and other smart home appliances are included in the section of other smart home appliances. The industry is being boosted by the growing use of IoT in smart speakers since it can be configured to work with existing infrastructure and smart homes. Creating smarter products that deliver intelligent solutions and innovative commercial outcomes is the primary goal of the Internet of Things. Another element of a smart home system is a smart thermostat, which enables users to schedule the temperature of their houses from an app.
Based on distribution channels, the global smart home appliances market is bifurcated into online and offline.
The offline segment owns the highest market share and is expected to grow at a CAGR of 8.40% during the forecast period. Supermarkets, hypermarkets, factory outlets, specialty shops, and other retail-based retailers make up the offline distribution route for smart home products. An offline distribution channel still rules the market because customers can physically examine the products. This allows for a better evaluation of the features and quality of the products. Smart home appliance businesses can provide their clients an exclusive experience thanks to traditional brick-and-mortar storefronts. Additionally, brands can conduct live product demonstrations to customers if an expert or associate is available in-store. This helps buyers learn more about the product and make an educated purchase decision.
Both company-owned and e-commerce websites are part of the online distribution network for smart home equipment. Due to the rise of e-commerce and emerging digitization, particularly in developing nations like China and India, the online category is anticipated to increase quickly over the projection period. Additionally, the global online sales of smart home appliances are increasing due to the popularity of online shopping and smart, connected devices among millennials and the younger population. The online selling of smart home equipment is also driven by the convenience of online transactions, a busy lifestyle, and the freedom to shop.
Asia-Pacific Dominates the Global Market
The global smart home appliances market is divided into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
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Asia-Pacific is the most significant shareholder in the global smart home appliances market and is expected to grow at a CAGR of 10.10% during the forecast period. The online distribution channel for smart home appliances is made up of company websites and e-commerce websites. Due to the quick rise of e-commerce and emerging digitalization, particularly in developing nations like China and India, the online segment is anticipated to grow faster over the forecast period. The global online sales of smart home appliances are also increasing due to the rising popularity of online shopping, smart home appliances, and connected devices among millennials and the younger population. In addition, factors like the ease of conducting business online, a busy lifestyle, and the flexibility of shopping whenever and wherever are propelling the online sale of smart home appliances.
North America is expected to grow a CAGR of 7.60% during the forecast period. North America is expected to dominate the smart home appliances market due to its highly developed information and communication technology (ICT) infrastructure and the widespread adoption of connected devices. The majority of significant IoT market players are headquartered in the US. According to estimates, the development of the market for smart home appliances will be fueled by the region's high internet connectivity and the maturity of the bulk of the regional technological marketplaces. Additionally, the top businesses in terms of revenue, such as Microsoft, IBM, Facebook, Google, and Apple, are located in North America. Most significant participants in the IoT market are also based in the United States.
Europe is expected to grow significantly over the forecast period. One of the few economic and political partnerships between nations that collectively occupy the majority of the continent is the EU. IoT provides a smart environment by fusing the real and virtual worlds, which increases demand for smart home gadgets. In addition, the European Commission has been actively collaborating with the IoT sector and several organizations to explore the possibilities of cutting-edge technologies like AI. The U.K., Germany, France, Spain, and Italy are the main contributors to the growth of the market for smart home appliances because these countries account for the majority of smartphone users in the region.
Numerous African nations have experienced tremendous economic growth, and their young people often aspire to become first-time homeowners. It is therefore anticipated that there will be an increase in demand for smart home appliances in the region. Due to the emergence of numerous online retail platforms, the region also presents enormous prospects for demand fulfillment. The Middle East is distinguished by high consumer expenditure on luxury facilities and a young population that is expanding quickly, in contrast to the consumer dynamics in Africa. The government's desire to diversify its economies has given the region's numerous construction initiatives and technological uptake a significant boost.
The global smart home appliances market’s major key players are