Smart Home Market Size, Share & Trends Analysis Report By Product (Lighting Control, Security & Access Control, HVAC, Entertainment, Smart Speaker, Home Healthcare, Smart Kitchen, Home Appliances, Smart Furniture), By End-user (Residential, Commercial) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

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

By Product Type

Smart Speaker devices serve as central hubs for home automation, allowing users to control lights, thermostats, and security systems with voice commands. Smart speakers are in high demand due to the convenience of hands-free interaction and integration with numerous services, as well as advances in AI and voice recognition. Amazon Echo, Google Nest, and Apple HomePod are among the segment's leading participants.

Smart lighting systems are connected to the internet and controlled via an app on a smartphone, or a smart speaker such as Alexa or Google Home. The system can be controlled remotely from anywhere. Smart lights can be scheduled to turn off and on adding extra security when away from home. Energy savings, improved well-being through adjustable lighting, enhanced security, and convenience in controlling lighting remotely drive the growth of smart speakers.

Smart thermostats are advanced devices that offer homeowners increased control over their home’s heating and cooling systems. Smart thermostats such as Google Nest come with integrated Wi-Fi allowing users to schedule, monitor, and remotely control home temperatures via smartphone app. These devices also learn homeowner's behavior and automatically modify settings to provide them with maximum comfort and efficiency. Smart thermostats can also report energy use and remind users to change filters. Key Players include Ecobee, Honeywell, Emerson, etc.

The smart security system segment includes a variety of advanced technologies designed to enhance home safety and security. Products such as smart doorbells with cameras, smart locks for remote access, and smart cameras with motion detection and cloud storage are included in this segment. Smart cameras with motion sensors can identify the difference between residents, visitors, pets, and burglars and can send notifications to authorities if suspicious behavior is detected. Ring, SimpliSafe, Nest, ADT, etc., are prominent players in this segment.

The smart appliances segment encompasses a wide range of devices designed to enhance convenience, efficiency, and energy management within the home such as smart refrigerators, smart washing machines, smart air purifiers, and Smart TVs, etc. Smart appliances include internet connectivity and advanced sensors, which allow them to be operated remotely via smartphone apps. convenience and automation, and advancements in IoT technology drive the growth of smart appliances. Key players are Samsung Electronics, LG Electronics, Whirlpool Corporation, Philips, etc.

Smart hubs act as a central command unit that allows seamless links between smart devices and controllers are user interfaces via applications or physical devices that allow homeowners to monitor and operate their smart systems. Smart hubs and controllers improve the convenience, efficiency, and customization of smart home systems, making them critical components for establishing a unified and responsive smart living environment. Increasing adoption of smart home devices, increasing need for convenience, and improved security features are driving the growth. Amazon Echo, Google Nest Hub, Samsung SmartThing, Apple Homekits, etc., are key players in this segment.

By End-user

The residential segment within the smart home market contains several products and solutions that seek to enhance comfort, security, and energy efficiency in private households. These can include smart devices such as smart lighting, smart thermostats, security cameras, smart locks, and voice-activated assistants. These technologies allow house owners greater control over their living environments with remote management of lighting, temperature, and security features from mobile apps or through voice commands. The residential smart home market is driven by growing consumer demand for convenience and energy savings, along with enhanced home security.

The commercial segment focuses on integrating advanced technology such as smart systems and devices designed for office buildings, retail spaces, hospitality venues, and other commercial properties. Products in this segment include smart lighting controls, automated climate management systems, advanced security solutions, and energy management tools. These technologies aim to enhance operational efficiency, reduce energy consumption, and improve security in commercial ecosystems. Increasing trends of Smart building technology, sustainability, and energy savings are driving the growth of the segment.

Impact of covid-19

As part of steps to control the transmission of the COVID-19 pandemic, governments in several nations have limited the movement of commodities and people and suspended the functioning of manufacturing facilities. It has impacted power usage throughout the world. As per the short-term forecast of the United States Energy Information Administration (EIA), electricity consumption in the United States is expected to fall by a record 4.5% by the end of 2020, as businesses have temporarily shut down due to the government lockdowns to stop the prevalence of the coronavirus. As a result, global demand for and manufacturing instrument transformers is expected to fall.

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.