The global smart home products market was valued at USD 103.61 billion in 2023. It is estimated to reach USD 306.32 billion by 2032, growing at a CAGR of 12.8% during the forecast period (2024–2032).
In the past few years, with the surging digitization owing to the rapid proliferation of the internet, there has been a greater adoption of IoT devices, leading to a rise in the deployment of smart homes, thereby boosting market growth. Moreover, to succeed in the highly competitive global smart home product market, the major industry leaders are launching innovative products that offer improved features and increased efficiency, which is estimated to create market expansion opportunities.
Smart home products refer to devices and systems designed to enhance household convenience, efficiency, and security through automation and remote control capabilities. These products utilize Internet of Things (IoT) technology to connect various devices and appliances to a central hub or a smartphone application, allowing users to monitor and control them from anywhere with an Internet connection.
Common examples include smart thermostats, smart lighting systems, smart security cameras, smart locks, and voice-controlled assistants like Amazon Alexa or Google Home. Smart home products allow users to adjust settings, receive alerts, and automate tasks, such as changing the temperature, turning lights on or off, or even locking doors remotely. They aim to streamline daily routines, optimize energy usage, and provide peace of mind through enhanced security features.
The rising prevalence of the Internet of Things and smart home technology is the main factor propelling the market for smart home products. The Internet of Things allows the integration of various smart products, such as refrigerators, air conditioners, lighting systems, and washing machines. It enables consumers to remotely control and regulate these appliances using smartphones or voice assistants.
According to a Springer article, networked IoT devices in 2022 surpassed 12 billion, indicating an 8% growth compared to 2021. The estimated growth rate for this number is expected to more than double, reaching 27 billion by 2025, in line with the current trend's velocity. Moreover, according to Investopedia's calculation, the worldwide number of smart homes is 175 million. As a result, the growing popularity of smart household products and the rising demand for convenience and automation are anticipated to drive the market for smart home products in the next years.
Due to the increasing costs of housing prices and mortgage rates, consumers are investing more money in home remodeling or improvement projects to update their traditional household structures. The amount of equity that homeowners currently own is twice as high as in 2014. This trend is observed among homeowners with increased affluence and are more inclined to allocate funds toward home improvement projects. The demand for technical breakthroughs from consumers and changing social dynamics has driven the expansion of smart home devices.
Moreover, the growing population of millennials purchasing houses, specifically older properties, is fueling the need for contemporary kitchens. Based on a poll performed by OnePoll for Bernzomatic, involving a sample of 2,000 homeowners in the United States from August 3 to August 7, 2020, it was found that millennials have been the most active in undertaking home renovation projects since March 2020, with a participation rate of 81%. During the implementation of stay-at-home orders, the survey examined the multitude of home renovation projects undertaken by American householders. These advancements are improving the market for smart home products.
Privacy and security concerns pose significant limitations on the smart home products market. Consumers worry about the potential for unauthorized access to their personal data and the possibility of malicious actors gaining control over their smart devices. Instances of hacking and data breaches in smart home systems have heightened these fears, leading to a reluctance among consumers to adopt these technologies.
The collection of sensitive information by smart home devices, such as audio and video recordings, further exacerbates privacy concerns. Moreover, the interconnected nature of smart home ecosystems increases the attack surface for cyber threats. According to Rambus Incorporated, a company that designs, develops, and licenses chip interface technology, around 80% of IoT devices are vulnerable to several attacks. The act of integrating previously independent smart devices such as lights, appliances, and locks inevitably gives rise to numerous novel cybersecurity concerns. These factors restrict the market expansion.
The key players in the smart home product market are introducing novel products with better features and enhanced efficiency to thrive in the highly competitive market. For instance, in October 2023, Level Home Inc. introduced an enhanced connected solution allowing additional functions to be accessed through Bluetooth and Wi-Fi for its range of smart home products. The new Level Lock+ Connect and Level Bolt Connect will enable clients to remotely and effortlessly lock and unlock their doors, regardless of their geographical location.
Furthermore, in November 2023, IKEA launched three new cost-effective smart sensors designed for detecting water leaks and motion – VALLHORN, PARASOLL, and BADRING. The sensors are engineered to provide consumers with enhanced autonomy and convenience, enabling them to maintain connectivity with their residences, even during their absence. IKEA is expanding its range of smart home products by introducing PARASOLL, VALLHORN, and BADRING smart sensors. These sensors allow consumers to remotely control and monitor their homes from any global location. This is estimated to create opportunities for market growth.
| Study Period | 2020-2032 | CAGR | 12.8% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 103.61 Billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 306.32 Billion |
| Largest Market | North America | Fastest Growing Market | Asia-Pacific |
Based on region, the global smart home products market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
North America is the most significant global smart home products market shareholder and is expected to expand substantially during the forecast period. North America is projected to have the highest market share in the smart home products market, primarily because of its advanced information and communication technology (ICT) infrastructure and the extensive use of connected devices. The growth of the regional smart home appliances market will be driven by the region's strong internet connectivity and the advanced state of most regional technological marketplaces. North America is also home to the leading technologically advanced companies in revenue, including Microsoft, IBM, Facebook, Google, and Apple. By the end of 2023, almost 80% of residences in the United States will have embraced smart technologies and systems, creating lucrative opportunities for new participants in the market for smart home products.
Furthermore, according to Statista's forecast, North America's number of IoT connections is projected to exceed 8 billion by 2030. Digitized House Media's statistics reveal that approximately 60% of persons in the United States purchase smart home products to monitor their homes using smartphones. Moreover, 30% of the Canadian population currently owns smart home devices, which is expected to increase to 50-55%. This is estimated to drive the region's market growth. The market players are also introducing novel smart home products in response to a rise in demand. For instance, in June 2023, Shelly, an Allterco Robotics, Ltd subsidiary, unveiled the introduction of 8 novel smart home automation products in the Shelly Pro and Plus series at the Consumer Electronics Show (CES). All of these factors collectively contributed to the expansion of the smart home products market in the region.
The Asia-Pacific market is predicted to grow fastest over the forecast period owing to a higher adoption of connected devices. According to a study conducted by Google and Accenture, the percentage of households in South Korea with connected home devices was 21% in 2020, while in Japan it was 13%. Similarly, the escalating expenditure of consumers, along with the expanding prevalence of smart homes, serves as a key driver for the expansion of the smart bathroom sector in the area. According to Lera Smart Home Solutions, approximately 24.9% of households in Australia currently have smart home technology. It is expected that this percentage will rise to 41.9% by the year 2023. This factor significantly influences the region's growing embrace of smart home products.
Furthermore, key players have launched new products. For instance, in July 2023, Versuni, previously recognized as Philips domestic appliances, diversified its offerings to include smart home safety devices in India. The most recent collection comprises three smart security cameras and a novel Home Safety application. The Philips Home Safety solutions are purported to integrate artificial intelligence, user-friendliness, and reliability to give users various advantages. Philips' newest security cameras will have smart features that distinguish motion, noise, and individuals. Thus, the factors above drive the regional market growth.
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The global market is bifurcated into type and application.
Based on type, the global smart home products market is segmented into hardware and software.
Hardware products used in smart homes refer to the physical devices and components that enable automation, control, and connectivity within a home environment. These products include smart thermostats, lighting systems, security cameras, door locks, sensors, and entertainment systems. They typically incorporate technologies like Wi-Fi, Bluetooth, Zigbee, or Z-Wave to communicate with each other and with smartphones or smart home hubs. Many smart home devices also integrate artificial intelligence and machine learning algorithms to adapt to user's preferences and behaviors, offering personalized experiences. Thus, smart home hardware forms the foundation of a connected ecosystem that transforms traditional homes into smart and responsive living spaces.
Based on application, the global smart home products market is bifurcated into entertainment, health, and security.
Smart home products are widely used for security solutions. Escalating concerns over home security primarily drive the surge in smart security solutions. With technological advancements, smart security systems offer comprehensive surveillance capabilities, real-time alerts, and remote monitoring features. In addition to giving homeowners more control and visibility over their property, smart cameras, door locks, and motion sensors also serve to dissuade possible attackers and provide peace of mind.
Integration with mobile applications enables users to monitor their homes remotely, while AI-powered features, such as facial recognition and activity detection, enhance security measures. Moreover, the growing adoption of interconnected smart home ecosystems and voice assistants further enhances the accessibility and functionality of smart security solutions, making them increasingly attractive to consumers seeking to safeguard their homes and loved ones.
The pandemic wreaked havoc on the smart home products market. The temporary shutdown and the restrictions on international and domestic travel created a large-scale impact. It leads to impaired production capability and restricts new deployments. The effect on the construction sectors has also contributed to the market hindrance.
